#Boston #Liberty Mutual #Reinsurance #Catastrophe

Liberty Mutual Insurance's New Reinsurance Framework for 2025

In a pivotal move for the insurance industry, Liberty Mutual Insurance has disclosed its annual update concerning its Property Catastrophe Program, a vital part of their risk management strategy. As of January 1, 2025, the company has implemented robust reinsurance coverage to better safeguard its domestic business against the strains of natural disasters and other catastrophic events.

Key Elements of the Reinsurance Program

According to the announcement made on January 27, 2025, Liberty Mutual has secured a total occurrence limit of $2.8 billion, exceeding a $1 billion retention threshold. This structure allows for one reinstatement, thereby enhancing their capacity to handle significant losses without detrimental financial impacts.

Furthermore, $1.5 billion of the total limit is accessible under an All Perils clause, signifying comprehensive coverage against various types of catastrophic events, including natural disasters like hurricanes and floods.

In addition to the traditional coverage, Liberty Mutual has introduced an Aggregate Property Catastrophe Program this year. This program is designed to mitigate the frequency and severity of potential losses, featuring a $500 million cover that applies on top of a $2.4 billion aggregate retention. Moreover, each event carries a deductible of $100 million, thus sharing the risk more evenly between the insurer and reinsurer during major claims periods.

An Insight into Forward-Looking Statements

Within its announcement, Liberty Mutual also included cautionary notes regarding forward-looking statements. These statements aim to provide clarity on the company’s viewpoint regarding future operations, financial performance, market dynamics, and other potential developments. The use of terms such as