Liberty Mutual profit up 58%

Liberty Mutual Group said its 2006 profit jumped 58 percent as the policyholder-owned insurer enjoyed a more than $1 billion reduction in disaster-related losses, compared with 2005.

The nation's sixth-largest property and casualty insurer reported full-year net income of $1.63 billion, up from $1.03 billion in 2005, when Boston-based Liberty Mutual and other property insurers were saddled with big losses from hurricanes, including Katrina and Rita.

Last year, Liberty Mutual reported just $541 million in losses from all catastrophes, compared with $1.64 billion in 2005.

Liberty Mutual's revenue rose 11 percent in 2006 to $23.5 billion, up from $21.2 billion in 2005.

"Clearly, we benefited from the low level of hurricane activity, but the financial fundamentals and the competitive position of each of our business units were the drivers of these very gratifying results," said Edmund Kelly, Liberty Mutual's chairman and chief executive.

However, Liberty Mutual suffered a 34 percent reduction in investment gains, to $343 million from $523 million in 2005.

Mark Rouck, an insurance analyst with Fitch Ratings, said Liberty Mutual's 2006 results were in line with the industry's overall performance.

"You had the dual effect of pretty adequate premium rates last year, and the light catastrophe losses," Rouck said. "Add them together, and the property casualty industry did pretty well as a whole."

A holding company formed in 2002 gives Liberty Mutual the option to issue publicly traded shares, although the company has said it has no plans to do so.
(AP)