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Liberty Mutual Insurance Reports Second Quarter 2022 Results

Liberty Mutual Insurance Reports Second Quarter 2022 Results
PR Newswire
BOSTON, Aug. 4, 2022

BOSTON, Aug. 4, 2022 /PRNewswire/ — Liberty Mutual Holding Company Inc. and its subsidiaries (collectively “LMHC” or the “Company”) reported net loss att…

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Liberty Mutual Insurance Reports Second Quarter 2022 Results

PR Newswire

BOSTON, Aug. 4, 2022 /PRNewswire/ -- Liberty Mutual Holding Company Inc. and its subsidiaries (collectively "LMHC" or the "Company") reported net loss attributable to LMHC of $343 million and net income attributable to LMHC of $155 million for the three and six months ended June 30, 2022, versus net income attributable to LMHC of $769 million and $1.625 billion for the same periods in 2021.

"Investment market volatility and insurance loss cost inflation persisted in the second quarter resulting in a net loss attributable to LMHC of $343 million," said David H. Long, Liberty Mutual Chairman and Chief Executive Officer. "Pre-tax net realized investment losses of $671 million along with inflation driven underwriting margin erosion in some lines of business were the key drivers of Q2 results. While rising interest rates are causing some short-term pressure on investment results, we expect higher net investment income to be a significant tailwind in future periods.

"The underlying combined ratio in the quarter increased 5.0 points to 96.8% reflecting elevated severity in private passenger auto, though margin improvement continued in commercial markets. Accelerated rate and targeted underwriting actions in personal lines will moderate growth and begin to improve the loss ratio in the second half of the year as rate increases earn in over time." 

The tables below outline highlights of LMHC's consolidated financial results for the three months and six months ended June 30, 2022.

Net Written Premium ("NWP") by Business:


Three Months Ended

June 30,

Six Months Ended

June 30,

$ in Millions

2022

2021

Change

2022

2021

Change

Global Retail Markets

$8,865

$7,480

18.5 %

$16,555

$14,325

15.6 %

Global Risk Solutions

3,714

3,377

10.0

7,668

6,937

10.5

Corporate and Other

(58)

(12)

NM   

(135)

(16)

NM   

   Total NWP

$12,521

$10,845

15.5 %

$24,088

$21,246

13.4 %

   Foreign exchange effect on growth



(1.0)



(0.9)

   NWP growth excluding foreign exchange1



16.5 %



14.3 %

1      Determined by assuming constant foreign exchange rates between periods.

        NM = Not Meaningful

 

Consolidated Results of Operations:


Three Months Ended

June 30,

Six Months Ended

June 30,

$ in Millions

2022

2021

Change

2022

2021

Change

Revenues

$12,215

$11,794

3.6 %

$24,089

$23,609

2.0 %

Underlying PTOI before limited partnerships income

$690

$1,094

(36.9 %)

$1,756

$2,171

(19.1 %)

   Catastrophes

(1,105)

(660)

(67.4)

(1,761)

(1,700)

3.6

   Net incurred losses attributable to prior years:







     - Asbestos and environmental1

-

-

-

-

-

-

     - All other2

152

14

NM

141

53

166.0

Pre-tax operating (loss) income before limited partnerships income

(263)

448

NM

136

524

(74.0)

Limited partnerships income3

469

954

(50.8)

834

1,792

(53.5)

Pre-tax operating income

206

1,402

(85.3)

970

2,316

(58.1)

Net realized (losses) gains

(671)

(191)

NM

(815)

63

NM

Unit linked life insurance

73

(32)

NM

120

(88)

NM

Acquisition & integration costs

(48)

(5)

NM

(57)

(9)

NM

Restructuring costs

2

(110)

NM

-

(111)

(100.0)

Pre-tax (loss) income

(438)

1,064

NM

218

2,171

(90.0)

Income tax (benefit) expense

(96)

295

NM

62

545

(88.6)

Consolidated net (loss) income

(342)

769

NM

156

1,626

(90.4)

Less: Net income attributable to non-controlling interest

1

-

-

1

1

-

Net (loss) income attributable to LMHC

(343)

769

NM

155

1,625

(90.5)

Net income attributable to LMHC excluding unrealized impact4

78

652

(88.0)

587

1,445

(59.4)

Cash flow provided by continuing operations

$1,003

$1,821

(44.9 %)

$1,789

$2,867

(37.6 %)

1

Asbestos and environmental is gross of the related adverse development reinsurance (the "NICO Reinsurance Transaction", which
is described further in Reinsurance).

2

Net of earned premium and reinstatement premium attributable to prior years of $36 million and $45 million for the three and six
months ended June 30, 2022, and $16 million and $52 million for the same periods in 2021.

3

Limited partnerships income includes LP, LLC and other equity method income within net investment income in the accompanying
Consolidated Statement of Operations and revenue and expenses from direct investments in natural resources.

4

Excludes unrealized gains on equity securities, unit linked life insurance, and the corresponding tax impact.

NM = Not Meaningful

Combined Ratio:


Three Months Ended

June 30,

Six Months Ended

June 30,

CONSOLIDATED

2022

2021

Change
(Points)

2022

2021

Change
(Points)

Combined ratio







Claims and claim adjustment expense ratio

68.1 %

62.9 %

5.2

66.1 %

62.5 %

3.6

Underwriting expense ratio

28.7

28.9

(0.2)

28.7

29.2

(0.5)

Underlying combined ratio

96.8

91.8

5.0

94.8

91.7

3.1

Catastrophes

9.5

6.4

3.1

7.8

8.4

(0.6)

Net incurred losses attributable to prior years:







   - Asbestos and environmental

-

-

-

-

-

-

   - All other1

(1.3)

(0.1)

(1.2)

(0.6)

(0.3)

(0.3)

Total combined ratio2

105.0 %

98.1 %

6.9

102.0 %

99.8 %

2.2

1

Net of earned premium and reinstatement premium attributable to prior years.

2

The combined ratio, expressed as a percentage, is a measure of underwriting profitability.  This measure should only be used in
conjunction with, and not in lieu of, underwriting income and may not be comparable to other performance measures used by the
Company's competitors.  The combined ratio is computed as the sum of the following property and casualty ratios: the ratio of claims
and claim adjustment expense less managed care income to earned premium; the ratio of insurance operating costs plus amortization
of deferred policy acquisition costs less third-party administration income and fee income (primarily related to the Company's
involuntary market servicing carrier operations) and installment charges to earned premium; and the ratio of policyholder dividends to
earned premium. Provisions for uncollectible premium and reinsurance are not included in the combined ratio unless related to an
asbestos and environmental commutation and certain other run off.  Restructuring and acquisition and integration costs are not included
in the combined ratio.

Equity:


As of 

June 30,

As of
December 31,


$ in Millions

 

2022

 

2021

Change

Unassigned equity

$29,563

$28,776

2.7 %

Accumulated other comprehensive (loss) income

(6,125)

(960)

    NM

Non-controlling interest

30

32

-

    Total equity

$23,468

$27,848

(15.7 %)

NM = Not Meaningful

Subsequent Events

On July 28, 2022 the Company completed its acquisition of Malaysian insurer AmGeneral Insurance Berhad ("AmGeneral"). Please refer to the Consolidated Results of Operations section for additional information.

Management has assessed material subsequent events through August 3, 2022, the date the financial statements were available to be issued.

Financial Information

The Company's financial results, management's discussion and analysis of operating results and financial condition, accompanying financial statements and other supplemental financial information for the three and six months ended June 30, 2022 are available on the Company's Investor Relations website at www.libertymutualgroup.com/investors.

Conference Call Information

On August 4, 2022, at 11:00 a.m. Eastern Time, David Long, Liberty Mutual Insurance Chairman and CEO, will host a conference call to discuss the Company's second quarter financial results. To participate in the event via telephone and to ask a question, please dial 888-312-9837, referencing the Confirmation Code 1131916. You can view the slides at https://attglobal.webcasts.com/starthere.jsp?ei=1557682&tp_key=13838a6bc4. To listen to the call online via PC and view a presentation on financial performance, please log into https://attglobal.webcasts.com/starthere.jsp?ei=1557682&tp_key=13838a6bc4. Following the call, a recording of the event will be available on the Investor Relations section of Liberty Mutual's website, www.libertymutualgroup.com/investors.

About Liberty Mutual Insurance

At Liberty Mutual, we believe progress happens when people feel secure. By providing protection for the unexpected and delivering it with care, we help people embrace today and confidently pursue tomorrow.

In business since 1912, and headquartered in Boston, today we are the sixth largest global property and casualty insurer based on 2021 gross written premium. We also rank 78th on the Fortune 100 list of largest corporations in the U.S. based on 2021 revenue. As of December 31, 2021, we had $48.2 billion in annual consolidated revenue.

We employ over 45,000 people in 29 countries and economies around the world. We offer a wide range of insurance products and services, including personal automobile, homeowners, specialty lines, reinsurance, commercial multiple-peril, workers compensation, commercial automobile, general liability, surety, and commercial property.

For more information, visit www.libertymutualinsurance.com.

Risks and Uncertainties

The extent to which the coronavirus impacts our future results will depend on developments which are highly uncertain and cannot be predicted, including litigation developments, legislative or regulatory actions and intervention, the length and severity of the coronavirus (including of second waves), the level of acceptance of the vaccines, and the actions of government actors to contain the coronavirus or treat its impact, among others. Possible effects on our business and operations include:

  • disruptions to business operations resulting from working from home or from closures of our corporate or sales offices and the offices of our agents and brokers and quarantines of employees, customers, agents, brokers and suppliers in areas affected by the outbreak;
  • disruptions to business operations resulting from travel restrictions and reduced consumer spending on new homes or new automobiles which could reduce demand for insurance;
  • disruptions to business operations resulting from our customers having lower payrolls and revenues which could have an impact on insurance revenue;
  • increased claims related to trade credit, general liability, workers compensation, and event cancellation coverage, among others;
  • executive or legislative mandates or court decisions expanding property insurance policy coverage to cover business interruptions resulting from COVID-19 notwithstanding any exclusions set forth in such policies or conditions precedent generally required for liability under such policies; and
  • disruption of the financial markets resulting in reductions in the value of our investment portfolio.

A significant rise in the number of COVID-19 infections, infections in a wide range of countries and regions, or a prolongation of the outbreak, could create an adverse economic effect on the Company.

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 financial and business performance of the Company. Forward looking statements include, but are not limited to, statements that represent the Company's beliefs concerning future operations, strategies, financial results, investment market fluctuations, or other developments, and contain words and phrases such as "may," "expects," "should," "believes," "anticipates," "estimates," "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 materially different.

Contact:                               

Investor Relations                                              

Media Relations


Nik Vasilakos                                                      

Rich Angevine


857-224-6655                                                    

617-833-0926

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SOURCE Liberty Mutual Insurance

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Uncategorized

Pharma industry reputation remains steady at a ‘new normal’ after Covid, Harris Poll finds

The pharma industry is hanging on to reputation gains notched during the Covid-19 pandemic. Positive perception of the pharma industry is steady at 45%…

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The pharma industry is hanging on to reputation gains notched during the Covid-19 pandemic. Positive perception of the pharma industry is steady at 45% of US respondents in 2023, according to the latest Harris Poll data. That’s exactly the same as the previous year.

Pharma’s highest point was in February 2021 — as Covid vaccines began to roll out — with a 62% positive US perception, and helping the industry land at an average 55% positive sentiment at the end of the year in Harris’ 2021 annual assessment of industries. The pharma industry’s reputation hit its most recent low at 32% in 2019, but it had hovered around 30% for more than a decade prior.

Rob Jekielek

“Pharma has sustained a lot of the gains, now basically one and half times higher than pre-Covid,” said Harris Poll managing director Rob Jekielek. “There is a question mark around how sustained it will be, but right now it feels like a new normal.”

The Harris survey spans 11 global markets and covers 13 industries. Pharma perception is even better abroad, with an average 58% of respondents notching favorable sentiments in 2023, just a slight slip from 60% in each of the two previous years.

Pharma’s solid global reputation puts it in the middle of the pack among international industries, ranking higher than government at 37% positive, insurance at 48%, financial services at 51% and health insurance at 52%. Pharma ranks just behind automotive (62%), manufacturing (63%) and consumer products (63%), although it lags behind leading industries like tech at 75% positive in the first spot, followed by grocery at 67%.

The bright spotlight on the pharma industry during Covid vaccine and drug development boosted its reputation, but Jekielek said there’s maybe an argument to be made that pharma is continuing to develop innovative drugs outside that spotlight.

“When you look at pharma reputation during Covid, you have clear sense of a very dynamic industry working very quickly and getting therapies and products to market. If you’re looking at things happening now, you could argue that pharma still probably doesn’t get enough credit for its advances, for example, in oncology treatments,” he said.

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Spread & Containment

I created a ‘cosy game’ – and learned how they can change players’ lives

Cosy, personal games, as I discovered, can change the lives of the people who make them and those who play them.

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Cosy games exploded in popularity during the pandemic. Takoyaki Tech/Shutterstock

The COVID pandemic transformed our lives in ways many of us are still experiencing, four years later. One of these changes was the significant uptake in gaming as a hobby, chief among them being “cosy games” like Animal Crossing: New Horizons (2020).

Players sought comfort in these wholesome virtual worlds, many of which allowed them to socialise from the safety of their homes. Cosy games, with their comforting atmospheres, absence of winning or losing, simple gameplay, and often heartwarming storylines provided a perfect entry point for a new hobby. They also offered predictability and certainty at a time when there wasn’t much to go around.

Cosy games are often made by small, independent developers. “Indie games” have long been evangelised as the purest form of game development – something anyone can do, given enough perseverance. This means they can provide an entry point for creators who hadn’t made games before, but were nevertheless interested in it, enabling a new array of diverse voices and stories to be heard.

In May 2020, near the start of the pandemic, the small poetry game A Solitary Spacecraft, which was about its developer’s experience of their first few months in lockdown, was lauded as particularly poignant. Such games showcase a potential angle for effective cosy game development: a personal one.

Personal themes are often explored through cosy games. For instance, Chicory and Venba (both released in 2023) tackle difficult topics like depression and immigration, despite their gorgeous aesthetics. This showcases the diversity of experiences on display within the medium.

However, as the world emerges from the pandemic’s shadow, the games industry is facing significant challenges. Economic downturns and acquisitions have caused large layoffs across the sector.

Historically, restructurings like these, or discontent with working conditions, have led talented laid-off developers to create their own companies and explore indie development. In the wake of the pandemic and the cosy game boom, these developers may have more personal stories to tell.

Making my own cosy game

I developed my own cosy and personal game during the pandemic and quickly discovered that creating these games in a post-lockdown landscape is no mean feat.

What We Take With Us (2023) merges reality and gameplay across various digital formats: a website, a Discord server that housed an online alternate reality game and a physical escape room. I created the game during the pandemic as a way to reflect on my journey through it, told through the videos of game character Ana Kirlitz.

The trailer for my game, What We Take With Us.

Players would follow in Ana’s footsteps by completing a series of ten tasks in their real-world space, all centred on improving wellbeing – something I and many others desperately needed during the pandemic.

But creating What We Take With Us was far from straightforward. There were pandemic hurdles like creating a physical space for an escape room amid social distancing guidelines. And, of course, the emotional difficulties of wrestling with my pandemic journey through the game’s narrative.

The release fared poorly, and the game only garnered a small player base – a problem emblematic of the modern games industry.

These struggles were starkly contrasted by the feedback I received from players who played the game, however.

This is a crucial lesson for indie developers: the creator’s journey and the player’s experience are often worlds apart. Cosy, personal games, as I discovered, can change the lives of those who play them, no matter how few they reach. They can fundamentally change the way we think about games, allow us to reconnect with old friends, or even inspire us to change careers – all real player stories.

Lessons in cosy game development

I learned so much about how cosy game development can be made more sustainable for creators navigating the precarious post-lockdown landscape. This is my advice for other creators.

First, collaboration is key. Even though many cosy or personal games (like Stardew Valley) are made by solo creators, having a team can help share the often emotional load. Making games can be taxing, so practising self-care and establishing team-wide support protocols is crucial. Share your successes and failures with other developers and players. Fostering a supportive community is key to success in the indie game landscape.

Second, remember that your game, however personal, is a product – not a reflection of you or your team. Making this distinction will help you manage expectations and cope with feedback.

Third, while deeply considering your audience may seem antithetical to personal projects, your game will ultimately be played by others. Understanding them will help you make better games.

The pandemic reignited the interest in cosy games, but subsequent industry-wide troubles may change games, and the way we make them, forever. Understanding how we make game creation more sustainable in a post-lockdown, post-layoff world is critical for developers and players alike.

For developers, it’s a reminder that their stories, no matter how harrowing, can still meaningfully connect with people. For players, it’s an invitation to embrace the potential for games to tell such stories, fostering empathy and understanding in a world that greatly needs it.


Looking for something good? Cut through the noise with a carefully curated selection of the latest releases, live events and exhibitions, straight to your inbox every fortnight, on Fridays. Sign up here.


Adam Jerrett does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Government

The SNF Institute for Global Infectious Disease Research announces new advisory board

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in…

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From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in the 1970s, combating infectious disease has a rich history at Rockefeller. That tradition continues as the Stavros Niarchos Foundation Institute for Global Infectious Disease Research at Rockefeller University (SNFiRU) caps a successful first year with the establishment of a new advisory board.

Credit: Lori Chertoff/The Rockefeller University

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in the 1970s, combating infectious disease has a rich history at Rockefeller. That tradition continues as the Stavros Niarchos Foundation Institute for Global Infectious Disease Research at Rockefeller University (SNFiRU) caps a successful first year with the establishment of a new advisory board.

This international advisory board was created in part to give guidance on how to best use SNFiRU’s resources, as well as bring forward innovative ideas concerning new avenues of research, public education, community engagement, and partnership projects.

SNFiRU was established to strengthen readiness for and response to future health crises, building on the scientific advances and international collaborations forged in the context of the COVID-19 pandemic. Launched with a $75 million grant from the Stavros Niarchos Foundation (SNF) as part of its Global Health Initiative (GHI), the institute provides a framework for international scientific collaboration to foster research innovations and turn them into practical health benefits.

SNFiRU’s mission is to better understand the agents that cause infectious disease and to lower barriers to treatment and prevention globally. To speed this work, the institute launched numerous initiatives in its inaugural year. For instance, SNFiRU awarded 31 research projects in 29 different Rockefeller laboratories for over $5 million to help get collaborative new research efforts off the ground. SNFiRU also supports the Rockefeller University Hospital, where clinical studies are conducted, and brought on board its first physician-scientist through Rockefeller’s Clinical Scholars program. “One of the surprises was the scope of interest from Rockefeller scientists in using their talents to tackle important infectious disease problems,” says Charles M. Rice, Maurice R. and Corinne P. Greenberg Professor in Virology at Rockefeller and director of SNFiRU. “The research topics range from the biology of infectious agents to the dynamics of the immune response to pathogens, and also include a number of infectious disease-adjacent studies.”

In the past 12 months, SNFiRU often brought together scientists studying different aspects of infectious disease as a way to spur new collaborations. In addition to hosting its first annual day-long symposium, SNFiRU initiated a Young Scientist Forum for students and post-doctoral fellows to meet regularly, facilitating cross-laboratory thinking. A bimonthly seminar series has also been established on campus.

Another aim of SNFiRU is to develop relationships with community-based organizations, as well as design and participate in community-engaged research, with a focus on low-income and minority communities. To that end, SNFiRU is helping develop a research project on Chagas disease, a tropical parasitic infection prevalent in Latin America that can cause congestive heart failure and gastrointestinal complications if left untreated. The project will bring together clinicians practicing at health centers in New York, Florida, Texas, and California and basic scientists from multiple institutions to help the communities that are most impacted.

“The SNFiRU international advisory board convenes globally recognized leaders with distinguished biomedical expertise, unrivalled experience in pandemic preparedness and response, and a shared commitment to translating scientific advancements into equitably distributed benefits in real-world settings,” says SNF Co-President Andreas Dracopoulos. “The advisory board will advance the institute’s indispensable mission, which SNF is proud to support as a key part of our Global Health Initiative, and we look forward to seeing breakthroughs in the lab drive better outcomes in lives around the globe.”

The new advisory board will hold its first meeting on April 11th, 2024, following the second annual SNF Institute for Global Infectious Disease Research Symposium at Rockefeller.

Its members are: Rafi Ahmed of Emory University School of Medicine, Cori Bargmann of The Rockefeller University, Yasmin Belkaid of the Pasteur Institute, Anthony S. Fauci, the former director of the National Institute of Allergy and Infectious Diseases, Peter Hotez of Baylor College of Medicine and Texas Children’s Hospital Center for Vaccine Development, Esper Kallas of of the Butantan Institute, Sharon Lewin of the University of Melbourne Doherty Institue, Carl Nathan of Weill Cornell Medicine, Rino Rappuoli of Fondazione Biotecnopolo di Siena and University of Siena, and Herbert “Skip” Virgin of Washington University School of Medicine and UT Southwestern Medical Center.


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