Liberty Mutual Holding Co. Inc. reported net income of $481 million for its 2013 third quarter, a 3.4 percent jump from $465 million profit reported one year ago, reflecting improved core underwriting results.

“The third quarter reflected a continuation of our strategy of growing where we can do so profitably and contracting elsewhere, with a heavy emphasis on improving underwriting performance,” said David H. Long, Liberty Mutual Insurance chairman and CEO.

“This is reflected in net written premium growth of 7 percent year-to-date with a 99.7 percent combined ratio – a 2.3 point reduction over the prior year,” he said. “While severe storm activity was milder than the prior year, our combined ratio decline was driven by improved core underwriting results.”

Net income for the first nine months of this year was $1.247 billion, an increase of 17.3 percent over the same period in 2012.

Revenues for the latest quarter were $10.020 billion, an increase of 8.0 percent over the same period in 2012. For the first nine months of this year, revenues rose 6.1 percent to $28.989 billion.

Net written premium for the latest quarter was $9.358 billion, an 8.2 percent increase over last year. Net written premium for the first nine months of the year was $26.844 billion, an increase of 7.1 percent from last year.

The total combined ratio for the third quarter was 99.2 percent, improving from 99.4 percent one year ago. The total combined ratio for the first nine months was 99.7 percent, improving from 102.0 percent last year.

Net investment income for the third quarter was $700 million, a 7.3 percent decline from a year ago. Net realized gains for the latest quarter were $80 million, compared to $128 million a year ago. Net investment income for the first nine months of the year was $2.291 billion, down 6.5 percent from last year. There were net realized losses of $54 million for the first nine months of this year, compared to net realized gains of $349 million during the first nine months of last year.

The following are the earnings results from major business units.

Personal Insurance

In personal insurance lines, net written premium for the latest quarter was $4.205 billion (including $1.778 billion from Safeco), up 11.7 percent from $3.764 billion ($1.567 billion from Safeco) one year ago. Net written premium for the first nine months of this year was $11.644 billion, up 12.0 percent from $10.392 billion one year ago.

Private passenger automobile net written premium rose 10 percent to $2.448 billion for the latest quarter and up 10.7 percent to $6.872 billion for the first nine months. The company said increases reflect 6.9 percent growth in auto policies in-force as compared to Sept. 30, 2012 as well as rate increases.

Homeowners and other net written premium increased 11.4 percent to $1.619 billion for the quarter and rose 12.6 percent to $4.397 billion for the first nine months. The increases reflect 6.0 percent growth in homeowners policies in-force as compared to Sept. 30, 2012 as well as rate increases, the company said.

Overall combined ratio for personal insurance during the latest quarter was 89.0 percent, compared with 83.5 percent a year ago. For the first nine months, the combined ratio was 93.9 percent, compared with 94.0 percent last year. The company said the increase in the quarter was driven by unfavorable non-catastrophe prior year loss development in the auto liability line of business in 2013 and prior year catastrophe and non-catastrophe reserve releases in 2012.

Commercial Insurance

In commercial insurance, net written premium for the third quarter was $2.464 billion, down 3.1 percent from $2.544 billion a year ago. Net written premium for the first nine months was $6.996 billion, down 6.9 percent from $7.511 billion last year. The company said decreases in both periods were mostly driven by workers’ comp due to exposure reductions including lower involuntary market premium, partially offset by rate increases.

Total combined ratio for the commercial insurance for the third quarter improved to 103.6 percent, compared to 108.9 percent a year ago. The combined ratio for the first nine months also improved. It fell to 103.3 percent, compared to 110.1 percent a year ago.

Liberty International

For Liberty International, net written premium for the third quarter was $1.533 billion, up 7.9 percent from $1.421 billion a year ago. Net written premium for the first nine months were $4.311 billion, up 4.6 percent from $4.122 billion a year ago. The company said increases in both periods reflect organic growth across regions, mostly in Latin America, led by the impact of inflation in Venezuela, higher average premium in Brazil and the acquisitions in Ecuador, and to a lesser extent, Europe, mainly attributable to the addition of the United Kingdom, as well as Asia, led by China and Thailand.

Total combined ratio for the latest quarter was 103.3 percent, same as a year ago. The combined ratio for the first nine months was 104.0 percent, compared to 103.6 percent a year ago. The company said the increase reflects unfavorable commission expenses in Venezuela and China due to increased competition, as well as the start-up costs associated with the new operations in Ecuador, the United Kingdom and India.

Global Specialty

In global specialty, net written premium for the third quarter was $1.227 billion, up 13.9 percent from $1.077 billion a year ago. Net written premium for the first nine months was $3.890 billion, up 16.5 percent from $3.338 billion last year. The company said the increases in both periods reflect growth driven by Syndicate 4472 and LIU third party primarily due to new business.

Total combined ratio for the latest quarter was 92.5 percent, compared to 84.5 percent a year ago. The combined ratio for the first nine months was 94.4 percent, compared to 89.9 percent a year ago. The company said the increases in both periods were driven by higher current accident year losses in Syndicate 4472 and LIU inland marine.

(Reporter Young Ha is the East Coast editor of Insurance Journal)