Liberty Mutual Holding Company posted full-year net income of US$6.792 billion for 2025, a 55% jump from US$4.383 billion in the prior year, as results were buoyed by sharply lower catastrophe losses and strong investment returns even as its US retail book continued to shrink.

Total revenues edged up 0.5% to US$50.465 billion, while consolidated net written premiums slipped 3.1% to US$43.566 billion. The decline was concentrated in the US Retail Markets segment, where NWP fell 6.4% to US$26.468 billion.

Global Risk Solutions moved in the opposite direction, posting US$17.186 billion in NWP – a 4.7% increase.

The consolidated combined ratio improved 7.5 points to 88.4%, which CEO Tim Sweeney (pictured above) called "notably ahead of our 95% target in 2025 that was established three years ago." He said the result was Liberty Mutual's lowest in recent history.

Fourth-quarter combined ratio came in at 85.0%, down 6.5 points year over year, driven by favourable prior-year development and lower catastrophe activity.

Full-year catastrophe losses fell 28.7% to US$2.773 billion. Favourable prior-year development from all other lines contributed US$2.051 billion, though asbestos and environmental reserve charges rose sharply to US$465 million from US$175 million.

Pre-tax operating income climbed 63.2% to US$9.669 billion, while limited partnerships income surged 70.7% to US$2.161 billion, which Sweeney described as "a meaningful earnings tailwind."

Retail headwinds

The US retail contraction was not a single-quarter event. NWP declined in every quarter of 2025 – by 7.4%, 6.8%, 6.5%, and 5.3% respectively – with private passenger auto bearing the brunt.

Data disclosed by Liberty Mutual earlier in 2025 showed auto NWP fell 15.9% in Q1 alone, as auto retention dropped to 66.4% from 73.5% amid what the company attributed to increased policyholder shopping. Workers' compensation and select commercial lines also saw deliberate exposure reductions.

Still, USRM president Hamid Mirza had signalled during the Q4 2024 results call that Liberty Mutual was "primed to fight for market share in 2025 and beyond," particularly in package business combining personal auto and homeowners, as reported by Carrier Management.

How Liberty Mutual stacks up

Against its closest peer, Travelers, the results reveal a trade-off. Travelers grew NWP by 2% to US$44.387 billion while Liberty Mutual's premium base shrank.

Travelers reported to investors that it posted record operating cash flows of US$10.606 billion – roughly US$2.7 billion more than Liberty Mutual's US$7.876 billion. On profitability, Travelers disclosed an underlying combined ratio of 83.9% and a Q4 combined ratio of 80.2%.

Liberty Mutual's edge lay in net income – US$6.792 billion versus Travelers' US$6.288 billion – and total equity, which rose 30.1% to US$39.887 billion.

Sweeney said Liberty Mutual would "continue to pursue disciplined, targeted growth where we feel we have a clear advantage."