Liberty Mutual Holding Company Inc. and its subsidiaries reported net income attributable to LMHC of $162 million and $758 million for the three and twelve months ended December 31, 2020, versus a net loss attributable to LMHC of $301 million and net income attributable to LMHC of $1.037 billion for the same periods in 2019, respectively.

"Throughout 2020, in the face of challenging economic conditions, an ongoing pandemic, an increased awareness of systemic racial injustice, and a rapidly evolving insurance risk landscape, our employees remained focused and our business proved resilient," said Liberty Mutual Chairman and Chief Executive Officer David H. Long. "Despite COVID-19 losses, prior year reserve strengthening, and the one-time charge from our early retirement offer, the Company ended the year with $758 million of net income, driven by favorable core underwriting results and strong investment performance. We made progress on our key objectives, highlighted by personal lines PIF growth of over 6.5%, a core combined ratio improvement in the year of 5.7 points to 95.4% in Global Risk Solutions, and strong results from our investment portfolio which contributed almost $3.4 billion of pre-tax income in the year. Within Global Risk Solutions, renewal rate increases were 15% for the full year as the market continues to be receptive to the need for rate amidst elevated loss trends. We look to continue this momentum in 2021 and will continue to focus on our key objectives of growth in GRM, profitability in GRS, and diligent expense management."

Fourth Quarter Highlights

• Net written premium ("NWP") for the three months ended December 31, 2020 was $10.095 billion, an increase of $344 million or 3.5% over the same period in 2019.
• Pre-tax operating loss before partnerships, limited liability companies ("LLC") and other equity method income for the three months ended December 31, 2020 was $33 million, a decrease of $386 million or 92.1% from the same period in 2019.
• Partnerships, LLC and other equity method income for the three months ended December 31, 2020 was $494 million, an increase of $349 million over the same period in 2019.
• Net realized gains for the three months ended December 31, 2020 were $415 million, an increase of $365 million over the same period in 2019.
• Unit linked life insurance for the three months ended December 31, 2020 was ($51) million, a decrease of $17 million or 50.0% from the same period in 2019.
• Ironshore Inc. ("Ironshore") acquisition and integration costs for the three months ended December 31, 2020 were $2 million, a decrease of $10 million or 83.3% from the same period in 2019.
• Restructuring costs for the three months ended December 31, 2020 were $596 million, an increase of $532 million over the same period in 2019.
• Discontinued operations, net of tax, for the three months ended December 31, 2020 were $2 million, versus zero for the same period in 2019.
• Consolidated net income (loss) for the three months ended December 31, 2020 was $162 million, versus ($300) million for the same period in 2019.
• Net income attributable to non-controlling interest for the three months ended December 31, 2020 was zero, versus $1 million for the same period in 2019.
• Net income (loss) attributable to LMHC for the three months ended December 31, 2020 was $162 million, versus ($301) million for the same period in 2019.
• Net income (loss) attributable to LMHC excluding unrealized impact1 for the three months ended December 31, 2020 was $23 million, versus ($384) million for the same period in 2019.
• Cash flow provided by continuing operations for the three months ended December 31, 2020 was $1.542 billion, an increase of $1.104 billion over the same period in 2019.
• The consolidated combined ratio before catastrophes2, COVID-193, net incurred losses attributable to prior years4 and current accident year re-estimation5 for the three months ended December 31, 2020 was 92.8%, a decrease of 4.5 from the same period in 2019. Including the impact of catastrophes, COVID-19, net incurred losses attributable to prior years and current accident year re-estimation, the total combined ratio6 for the three months ended December 31, 2020 was 101.9%, a decrease of 4.8 points from the same period in 2019.

Year-to-date Highlights

• NWP for the twelve months ended December 31, 2020 was $40.624 billion, an increase of $810 million or 2.0% over the same period in 2019.
• Pre-tax operating income before partnerships, LLC and other equity method income for the twelve months ended December 31, 2020 was $187 million, a decrease of $385 million or 67.3% from the same period in 2019.
• Partnerships, LLC and other equity method income for the twelve months ended December 31, 2020 was $711 million, an increase of $10 million or 1.4% over the same period in 2019.
• Net realized gains for the twelve months ended December 31, 2020 were $790 million, an increase of $347 million or 78.3% over the same period in 2019.
• Unit linked life insurance for the twelve months ended December 31, 2020 was ($30) million, an increase of $93 million or 75.6% over the same period in 2019.
• Ironshore acquisition and integration costs for the twelve months ended December 31, 2020 were $18 million, a decrease of $10 million or 35.7% from the same period in 2019.
• Restructuring costs for the twelve months ended December 31, 2020 were $626 million, an increase of $556 million over the same period in 2019.
• Loss on extinguishment of debt for the twelve months ended December 31, 2020 was zero, versus $49 million for the same period in 2019.
• Discontinued operations, net of tax, for the twelve months ended December 31, 2020 were ($17) million, a decrease of $33 million or 66.0% from the same period in 2019.
• Consolidated net income for the twelve months ended December 31, 2020 was $760 million, a decrease of $278 million or 26.8% from the same period in 2019.
• Net income attributable to non-controlling interest for the twelve months ended December 31, 2020 was $2 million, an increase of $1 million or 100.0% over the same period in 2019.
• Net income attributable to LMHC for the twelve months ended December 31, 2020 was $758 million, a decrease of $279 million or 26.9% from the same period in 2019.
• Net income attributable to LMHC excluding unrealized impact for the twelve months ended December 31, 2020 was $671 million, a decrease of $90 million or 11.8% from the same period in 2019.
• Cash flow provided by continuing operations for the twelve months ended December 31, 2020 was $6.448 billion, an increase of $2.971 billion or 85.4% over the same period in 2019.
• The consolidated combined ratio before catastrophes, COVID-19, and net incurred losses attributable to prior years for the twelve months ended December 31, 2020 was 91.6%, a decrease of 3.8 points from the same period in 2019. Including the impact of catastrophes, COVID-19, and net incurred losses attributable to prior years, the total combined ratio for the twelve months ended December 31, 2020 was 101.8%, an increase of 0.1 points over the same period in 2019.

Financial Condition as of December 31, 2020

• Total long-term debt excluding unamortized discount and debt issuance costs was $9.017 billion as of December 31, 2020, an increase of $346 million or 4.0% over December 31, 2019.
• Total equity was $25.957 billion as of December 31, 2020, an increase of $2.338 billion or 9.9% over December 31, 2019.

Subsequent Events

On January 27, 2021, Liberty Mutual Group Inc. issued $800 million of 4.300% Series E Junior Subordinated Notes due 2061 (the "Notes"). Interest on the Notes is payable February 1 and August 1 of each year commencing on August 1, 2021 and the Notes may be redeemed in whole or in part on February 1, 2026 or on any Interest Payment Date thereafter, at a redemption price equal to their principal amount plus accrued and unpaid interest. The Notes mature February 1, 2061.

Management has assessed material subsequent events through February 23, 2021, the date the financial statements were available to be issued.

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 2019 gross written premium. We also rank 77th on the Fortune 100 list of largest corporations in the U.S. based on 2019 revenue. As of December 31, 2020, we had $43.8 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.