Liberty Mutual global risk wing makes major Q1 pivot towards reinsurance

Liberty Mutual’s global P&C, specialty and reinsurance wing went awash in reinsurance, cutting primary insurance net growth via increased cessions and shifting its own growth heavily into the reinsurance space.

Within the global risk solutions division of Liberty Mutual, first quarter net written premium in primary casualty fell a heady 22.8% year on year and primary specialty insurance NPW is down 13.3%. Even commercial property was down 3.1%.

Liberty Mutual's key subsidiary in the segment, Liberty Specialty Markets, showed Q1 NPW down a notable 14.6% year on year.

Reinsurance cessions are listed first and foremost amongst causes of the drop in NPW. Group management cited “higher cessions due to higher volume on direct written business, increase in reinsurance costs and more coverage being purchased.”

“De-risking of the portfolio in unprofitable and economically challenging products,” was also touted in the net premium reduction, without further enumeration of lines.

The decline in NPW for primary insurance lines was nearly compensated for by reinsurance, up 30% from the prior year period to become the largest line in the global risk solutions segment.

Combine reinsurance gains with primary declines and the global risk solutions segment ended with a 3.5% decline in NPW versus Q1 2022 to $3.815 billion.

That overall decline in NPW came even as the global risks segment enjoyed renewal rate increases totalling 11.4%, with gains across "most lines of business."

For Liberty Mutual's global risk solutions segment, underlying pre-tax operating profits were down a mild 6%.

But a halving of cat losses more than offset a rise in unfavourable prior period reserve development, leaving the segment with a 28% rise in pre-tax operating profits.

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