Sweeney Says Liberty Mutual Will Shift From “Fixing to Building” in 2026
Liberty Mutual closed 2025 with record underwriting performance and sharply higher earnings, results Chairman and CEO Tim Sweeney said reflect several years of deliberate strategic changes across the company.
“Building on the strong momentum we created in 2024, I’m pleased to report another outstanding year in 2025. And it reflects the deliberate choices we’ve made consistent with our mantra integrity, profit then growth,” Sweeney said during the company’s March 5 earnings call. “For the full year, we achieved a record 88.4% combined ratio and generated $6.8 billion of net income, reflecting a 7.5 point improvement and 55% growth respectively.”
Sweeney said the results stemmed from disciplined underwriting, improved risk selection and strong investment performance, noting the company exceeded profitability targets set three years earlier. Looking ahead, he said Liberty Mutual’s focus for 2026 will be “shifting from fixing to building,” scaling successful underwriting and operational initiatives while pursuing growth only in segments and distribution channels that meet the company’s return thresholds.
Combined Ratio Shows Significant Improvement
Turning to its latest results, Liberty Mutual Holding Company Inc. reported net income attributable to the company of $1.699 billion in the fourth quarter of 2025 and $6.792 billion for the full year, compared with $1.239 billion and $4.383 billion, respectively, for the same periods in 2024.
For the fourth quarter, Liberty Mutual reported a combined ratio of 85.0%, improving 6.5 points from 91.5% in the fourth quarter of 2024. The improvement was driven by favorable prior-year reserve development and lower catastrophe activity, according to the company.
The underlying combined ratio, which excludes catastrophe losses and prior-year reserve development, was 91.4% for the quarter.
“We made measurable progress on underwriting profitability in the fourth quarter, delivering a consolidated combined ratio of 85.0% and net income attributable to LMHC of $1.7 billion,” Sweeney said.
Full-Year Combined Ratio Comes In Below Target
For the full year, Liberty Mutual reported a combined ratio of 88.4%, improving 7.5 points from 95.9% in 2024 and coming in well below the company’s 95% combined ratio target for 2025, which had been set three years earlier.
“The consolidated combined ratio of 88.4%, notably ahead of our 95% target in 2025 that was established three years ago, represents the lowest in recent history and an acknowledgement of the effort put forth by our people to build an underwriting culture that our policyholders deserve,” Sweeney said.
Focus for 2026: “Shifting From Fixing to Building”
Looking ahead, Sweeney said Liberty Mutual’s focus will shift from improving profitability to building sustained growth on the operational improvements made over the past several years.
“In 2026, a key focus is shifting from fixing to building, taking what’s working and scaling it, leaning into our target segments and distribution and growing only where returns meet our thresholds.”
Sweeney also highlighted the company’s continued investment in technology and artificial intelligence.
“A key part of that foundation is our continued investment in technology, especially AI. We’re not treating AI as a stand-alone initiative, we’re embedding it into our platforms, data and analytics and scaling it across the business as a force multiplier for underwriting discipline and long-term performance.”
Premium Trends: Growth in Global Risk Solutions
Liberty Mutual reported $10.552 billion in net written premium in the fourth quarter, essentially flat compared with the same quarter in 2024.
For the full year, net written premium totaled $43.566 billion, down 3.1% from $44.963 billion in 2024.
Segment results were mixed:
- U.S. Retail Markets (USRM)
- Q4 2025: $6.375 billion, down 4.9% year over year
- Full year: $26.468 billion, down 6.4%
- Global Risk Solutions (GRS)
- Q4 2025: $4.196 billion, up 9.2%
- Full year: $17.186 billion, up 4.7%
Catastrophe Losses and Prior-Year Development
Catastrophe losses declined compared with 2024.
- Fourth quarter catastrophes: $30 million versus $234 million in Q4 2024
- Full-year catastrophes: $2.773 billion versus $3.890 billion in 2024
The results also benefited from favorable prior-year reserve development, excluding asbestos and environmental liabilities.
Investment Income Supports Operating Results
Limited partnerships income totaled $790 million in the fourth quarter, up from $380 million in the same quarter in 2024. For the full year, limited partnership income reached $2.161 billion, compared with $1.266 billion in 2024.
Overall pre-tax operating income increased 22% in the fourth quarter and 63.2% for the full year.
Equity Position Strengthens
Liberty Mutual reported total equity of $39.887 billion as of Dec. 31, 2025, up from $30.652 billion a year earlier, an increase of 30.1%.
Subsequent Event
The company also reported that on Feb. 2, 2026 it closed the sale of its operations in Vietnam to Chubb.
