Fourth Quarter 2019 Results February 27, 2020
Cautionary Statement Regarding Forward Looking Statements This report contains forward looking statements that are intended to enhance the reader’s ability to assess the future financ ial and business performance of Liberty Mutual Holding Company Inc., the parent corporation of the Liberty Mutual Insurance group of entities (the "Company" or "LMHC"). Forward looking statements include, but are not limited to, statements that represent the Company’s beliefs concerning future operati ons, strategies, financial results or other developments, and contain words and phrases such as “may,” “expects,” “should,” “believes,” “anticipates,” “ est imates,” “intends” or similar expressions. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond the Company’s control or are subject to change, actual results could be m aterially different. Some of the factors that could cause actual results to differ include, but are not limited to the following: the occurrence of catastrophic events (including terrorist acts, hurricanes, hail, tornados, tsunamis, earthquakes, floods, snowfall and winter conditions); inadequacy of loss reserves; adverse developments involving asbestos, environmental or toxic tort claims and litigation; adverse developments in the cost, availability or ability to collect reinsurance; disruptions to the Company’s relationships with its independent agents and brokers; financial disruption or a pr olonged economic downturn; the performance of the Company’s investment portfolios; a rise in interest rates; risks inherent in the Company’s alternative investments in private limited partnerships (“LP”), limited liability companies (“LLC”), commercial mortgages and direct investments in natural resources; d ifficulty in valuing certain of the Company’s investments; subjectivity in the determination of the amount of impairments taken on the Company’s investments; unfavorable outcomes from litigation and other legal proceedings, including the effects of emerging claim and coverage issues and investigations by state and federal authorities; the Company’s exposure to credit risk in certain of its business operations; the Company’s inability to obtain price increase s or maintain market share due to competition or otherwise; inadequacy of the Company’s pricing models; changes to insurance laws and regulations; changes i n the amount of statutory capital that the Company must hold to maintain its financial strength and credit ratings; regulatory restrictions on the Company ’s ability to change its methods of marketing and underwriting in certain areas; assessments for guaranty funds and mandatory pooling arrangements; a downgrade in the Company’s claims - paying and financial strength ratings; the ability of the Company’s subsidiaries to pay dividends to the Compan y; inflation, including inflation in medical costs and automobile and home repair costs; the cyclicality of the property and casualty insurance industry; political, legal, operational and other risks faced by the Company’s international business; potentially high severity losses involving the Company’s suret y products; loss or significant restriction on the Company’s ability to use credit scoring in the pricing and underwriting of personal lines policies; inadeq uac y of the Company’s controls to ensure compliance with legal and regulatory standards; changes in federal or state tax laws; risks arising out of the Company ’s securities lending program; the Company’s utilization of information technology systems and its implementation of technology innovations; difficulties wi th technology or data security; insufficiency of the Company’s business continuity plan in the event of a disaster; the Company's ability to successfully int egrate operations, personnel and technology from its acquisitions; insufficiency of the Company’s enterprise risk management models and modeling techniques; t he Company’s ability to identify and accurately assess complex and emerging risks, and changing climate conditions. The Company’s forward -looking statements speak only as of the date of this report or as of the date they are made and should be regarded solely as the Company’s current plans, estimat es and beliefs. For a detailed discussion of these and other cautionary statements, visit the Company’s Investor Relations website at www.libertymutualgroup.com/investors. The Company undertakes no obligation to update these forward-looking statements. The United Kingdom’s withdrawal from the European Union occurred on January 31, 2020. That date also marks the beginning of a transition period during which the United Kingdom will remain in the EU's customs union and single market but will negotiate with the European Union regarding the terms of the future UK-EU relationship. The withdrawal could have a negative impact on economic conditions in the United Kingdom and could result in unintended consequences in other countries as well. The Company acknowledges that there are risks and uncertainties associated with the United Kingdom’s withdrawal from the European Union and has developed a course of action related to the withdrawal but will continue to monitor the negotiations as they develop. 2 2
Liberty Mutual Overview Helping people embrace today and confidently pursue tomorrow P&C Businesses Global Retail Markets (GRM) Global Risk Solutions (GRS) • Liberty Specialty Markets • U.S. - Personal Lines and Business Lines • National Insurance • West - Brazil, Colombia, Chile, Ecuador, Spain, Portugal, and Ireland • North America Specialty • East 1 - Thailand, Singapore, Hong Kong, • Global Surety Vietnam, Malaysia, India, and China • Other GRS • GRM Reinsurance 1 st in U.S. Surety 3,4 • • Mutual holding company structure 3 rd largest P&C writer in the U.S. 3 • • $133.6B of assets and $43.2B of revenues in 2019 4 th largest commercial lines writer in the U.S. 3 • • The most diversified P&C insurer 5 th largest global P&C insurer 5 • 75 th among Fortune 500 companies 2 6 th largest personal lines writer in the U.S. 3 • • 9 th largest surplus lines carrier in the U.S. 3 • 1 On December 24, 2019, the Company’s subsidiary, Liberty UK and Europe Holdings Limited (“UKH”), entered into an agreement to sell its entire 99.99% interest in its Russian insurance affiliate, Liberty Insurance (JSC), to PJSC Sovcombank. The transaction closed on February 6, 2020. 2 Based on 2018 revenue – as reported. 3 Based on 2018 direct written premium (“DWP”). 4 Includes AmTrust surety full-year 2018 results. 5 Based on 2018 gross written premium (“GWP”), excludes state -owned companies. 3 3
Liberty Mutual’s Global Presence Liberty Mutual operates in 29 countries and economies around the globe Europe 1 Americas Asia / Pacific • Italy • Spain • Belgium • Australia • India • Thailand • U.S. (HQ) • Canada • Ecuador • Luxembourg • Switzerland • France • China • Malaysia • UAE • Bermuda • Chile • Mexico • Netherlands • U.K. • Germany • Hong Kong • Singapore • Vietnam • Brazil • Colombia • Peru • Portugal • Ireland Headquarters GRM GRS GRM & GRS 1 On December 24, 2019, the Company’s subsidiary, UKH, entered into an agreement to sell its entire 99.99% interest in its Russ ian insurance affiliate, Liberty Insurance (JSC), to PJSC Sovcombank. The transaction closed on February 6, 2020. 4 4
Analysis of Consolidated Net Written Premium (“NWP”) NWP by Business 1 NWP by Line of Business GRM General GRS Inland GRS Other Full Year 2019 Liability Marine 4 Reinsurance 2% 1% 1% Corporate Surety Reinsurance & Global Risk 3% 5 Other Commercial Solutions 4% Property 30% 4% Private GRS Passenger Auto Reinsurance 35% 5% 3 GRS Casualty 5% Workers Comp 5% Commercial Auto Global Retail 5% Markets 70% Commercial Homeowners Multiple-Peril GRS Specialty 16% 6% 2 Insurance 8% NWP in 2019 totaled $39.8 billion, an increase of 1.8% over the same period in 2018 (or an increase of 2.8% 6 excluding FX over the same period in 2018) 1 Excludes “Corporate and Other” of ($5) million. 2 Global Risk Solutions specialty insurance includes marine, energy, construction, aviation, warranty and indemnity, directors and officers, errors and omissions, trade credit, crisis management, contingent lines and other. 3 Global Risk Solutions casualty primarily includes general liability, excess & umbrella and environmental lines of business. 4 Global Risk Solutions other reinsurance includes new ceded global casualty program of $96 million and $408 million for the three and twelve months ended December 31, 2019. 5 Corporate Reinsurance is NWP associated with internal reinsurance assumed into Corporate, net of corporate external placements. Other primarily includes NWP from allied lines, domestic inland marine, internal reinsurance, and life and health reported within Global Retail Markets. 6 Determined by assuming constant foreign exchange rates between periods. 5 5
Recommend
More recommend
