Results Attributed to Disciplined Underwriting and Excellent Investment Performance
BOSTON, Mass. — Liberty Mutual Holding Company Inc. reported net income of $1.845 billion for the second quarter of 2025, more than doubling results from the prior-year quarter, driven by improved underwriting and strong investment performance.
“We delivered strong second quarter results, with net income attributable to LMHC of $1.8 billion driven by disciplined underwriting and excellent investment performance,” said Tim Sweeney, Liberty Mutual Chairman & Chief Executive Officer. “Our combined ratio improved by 12.4 points to 87.2%, reflecting the impact of our underwriting actions and strategic choices made over the past two years. These results demonstrate meaningful progress toward our 95% combined ratio target and create confidence in our path to sustainable, profitable growth.”
Key Q2 2025 Financial Highlights
- Net income attributable to LMHC: $1.845 billion, up from $717 million in Q2 2024.
- Combined ratio: 87.2%, improved from 99.6% a year ago.
- Underlying combined ratio: 82.1%, down 1.9 points year-over-year.
- Net written premium (NWP): $11.2 billion, down 1.9% from Q2 2024.
- US Retail Markets NWP: $6.91 billion, down 6.8%.
- Global Risk Solutions NWP: $4.29 billion, up 5.6%.
- Pre-tax operating income before limited partnerships income: $2.1 billion, up from $678 million.
- Catastrophe losses: $808 million, down 54% from $1.74 billion.
- Cash flow from operations: $1.765 billion, up 24.8%.
The Engine of Growth
Liberty Mutual’s improved profitability reflects the combination of reduced catastrophe losses and favorable prior-year development, alongside steady performance in Global Risk Solutions.
Within NWP:
- Private passenger automobile: Down 13.2% to $2.73 billion, reflecting lower retention.
- GRS specialty insurance: Up 7.8% to $967 million on higher new business.
- Commercial property: Up 3.1% to $922 million.
- Workers compensation: Down 12.7% to $344 million due to prior-year de-risking and lower exposures.
Profitability Drivers
- Rate discipline and underwriting actions taken over the past two years are flowing through results.
- Catastrophe impact halved year-over-year, particularly from lower U.S. weather losses compared to Q2 2024.
- Favorable prior-year development of $241 million versus $24 million unfavorable in the prior-year quarter.
- Investment income rose modestly to $1.37 billion from $1.33 billion.
Challenges Ahead
The company continues to face:
- Softness in certain personal lines due to competitive pressures and retention declines.
- Exposure reductions in workers compensation and certain commercial segments.
- Execution on portfolio rebalancing amid selective growth in specialty and commercial property markets.
Outlook
With its combined ratio now well below the 95% target, Liberty Mutual signaled confidence in sustainable profitability. The improvement in underwriting margins and investment performance positions the company strongly for the remainder of 2025.
