Liberty Mutual Q2 2025: Strong Profit Surge as Combined Ratio Improves 12 Points

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.