Liberty Mutual Group of Insurance Companies suffers setback

by Guest » Wed Mar 22, 2006 09:19 am

Good to see your feedback option.
Recently I have read an article associated with the liberty mutual group, stating the possible reasons for their financial shortfall.

Liberty Mutual Insurance Companies have lost their strength at a recent financial rating done by the AM Best Co. Their financial condition has deteriorated during the past couple of years largely due to a fall in terms of capitalization and also due to weak operating returns.

The long term unrealized losses from the equity markets, adverse funding related to medical inflation and more asbestos claims largely affected the industry. Liberty Mutual group's operating returns have fallen below the overall profit levels of the period.

The areas of concern depicted by the A M Best mainly stress on the availability of the reserve, like the old workers' compensation and asbestos claims resulting in an adverse development to minimize underwriting profitability.

According to the A. M. Best, this group might see signs of recovery in the near future though it's evident that there is no significant effect at present. The negative financial rating exposes capitalization to a constant threat from unrealized investment losses or adverse loss reserve development. Ever since a strong premium rate increase, there has been an increase in the cash flow across the different business units but it still maintains a decline in terms of the statutory surplus.

Thank you.

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