Global Specialty

Overview

Liberty Mutual Insurance Group’s Global Specialty Strategic Business Unit (SBU) is composed of three market-leading operating units: Liberty Specialty Markets, Liberty International Underwriters and Liberty Mutual Surety. Delivering a wide array of specialty insurance and reinsurance products in 19 countries, Global Specialty’s risk exposure extends to more than 170 countries worldwide.

In 2014, Global Specialty focused on increasing return on equity, expanding analytics capabilities, growing selectively, building innovative products and developing talent. This strategy resulted in solid financial performance, driven mainly by growth within Liberty Specialty Markets, and less than anticipated catastrophe (CAT) activity.

Already the second-largest surety writer within the U.S., Liberty Mutual Surety expanded its international reach in 2014. As part of the ongoing integration of the former Liberty Mutual Insurance Europe, Liberty Syndicates and Liberty Mutual Reinsurance, the newly formed Liberty Specialty Markets launched a new brand and visual identity, while building a united product offering and more flexibility within distribution. Liberty International Underwriters continued to improve execution in the Asia-Pacific region through its OneAsia strategy, enhancing its underwriting approach, risk engineering, broker relationship management and training.

Innovation Across the Globe

In 2015, a major focus for Global Specialty will be continuing to build our analytics capabilities to support data-driven underwriting and business decision-making. We’re also squarely focused on profit, so we must aggressively address underperforming segments of our business and optimize capital allocation across our varied products and markets.
— Global Specialty President Christopher L. Peirce

Innovation Across the Globe

Global Specialty’s innovative agribusiness programs are driving new business opportunities while also helping to boost global agricultural production. For example, through a unique partnership with seed producers, farmers receive insurance — underwritten by Liberty Specialty Markets (LSM) — to protect against crop failure. With this coverage — the cost of which is rolled into the seed price — farmers increase their seed investment and, in turn, their production. The underwriting and claims process is rapid and objective, as LSM uses advanced data analytics from weather stations and satellites to assess losses. The program is currently available in the Philippines, Argentina and Eastern Africa, and LSM is looking to expand it to other regions and adapt it to the specific needs of the agriculture industry.

Additionally, LSM is leading product innovation in underinsured and uninsured markets as a reinsurer in the African Risk Capacity (ARC). This consortium of insurance carriers uses early-warning drought models to predict food insecurity response costs, which allows for development of insurance and reinsurance structures. Through its analyses, ARC shifts the burden of climate risk from governments to international financial markets, allowing for faster response to famine and other natural disasters, thereby saving lives and promoting economic stability.

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Expanding Global Surety

Leveraging its significant underwriting capacity and expertise, Liberty Mutual Surety is partnering with Liberty International Underwriters and the Liberty International SBU to expand surety operations in large international markets. Initiatives include acquiring Primero Fianzas in Mexico, embedding experienced underwriters within local in-country Liberty Mutual operations, developing risk-sharing arrangements to increase capacity within foreign regulatory environments, and establishing a multilingual Global Services Center to coordinate cross-country and business operation bond issuance.

With continued global economic development — coupled with tighter banking regulations that reduce the attractiveness of competing products — Liberty Mutual Surety is poised to accelerate global surety premium expansion.

Highlights

Offices in 19 countries

Risk exposure in 170+ countries

Focus on 12 percent Return on Equity

Integrity, Dignity + Respect

Our Principles: We behave with integrity. We treat people with dignity and respect.

A Message from Our Chairman, President and CEO

2014 was a very good year for Liberty Mutual Insurance Group. We achieved strong financial results; improved underwriting profitability; increased our net income by five percent to $1.83 billion; grew net written premium selectively by three percent, to $36.3 billion; and decreased our combined ratio more than two points, to 97.5 percent.

We strengthened our balance sheet through capital-related transactions and disciplined operational execution, and, consequently, Standard & Poor’s upgraded our rating from “A-” to “A.” In addition, we advanced our ranking in the Fortune 100 by five positions, to 76.

Read full message from CEO David Long

Customer Focused

Our Principle: We deliver an exceptional customer experience.

By incorporating the voice of the customer into every business decision, Personal Insurance and Commercial Insurance consistently meet and exceed customer expectations.

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A Customer-Centric Culture

Personal Insurance has had great success with profitably growing — currently at a pace that’s more than twice the industry — and gaining market share, in large part because of its deep commitment to anticipating and meeting customer needs. By consistently putting the customer experience at the core of everything it does, the business unit is building a strong foundation and market leadership position for the years ahead.

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Delivering the Best Possible Experience

Helping customers is a two-way street for Commercial Insurance, which interacts with its customers by soliciting their feedback and then acting on what they say. Whether through technology, forums or employee training, incorporating the voice of its customers is key to delivering the best possible experience.

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Innovation

Our Principle: We continuously improve and innovate.

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Innovation Across the Globe

Innovative product development is critical to Global Specialty’s success in a highly competitive global market. To that end, Global Specialty is breaking new ground in the agriculture industry by developing market-leading reinsurance products for farmers and through its involvement in the African Risk Capacity, a consortium of insurance carriers that uses early-warning drought models to predict food insecurity response costs.

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Talent

Our Principle: We attract, develop and engage talent.

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Promises and People

At Liberty Mutual Insurance Group, we are in the business of promises — to protect people and the things they build, own and cherish. It is our people who fuel those promises. To deliver on our culture of continuous improvement and steadfast integrity, we foster an environment of support, empowerment and collaboration that enables our employees to succeed both inside and outside of work.

Excellence

Our Principle: We execute thoroughly and seek excellence.

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Everyday Excellence

Over 15 years, Liberty International has grown from a collection of small local companies into a $6 billion, multinational organization with operations in 18 countries. Its success in this short time has come, in part, from local ownership and knowledge — teams that track the nuances of their markets and move quickly to bring about change. By seeking excellence in its strategy and everyday activities, Liberty International will achieve continued growth in an increasingly competitive global marketplace.

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