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Liberty Mutual Holdings Co. reported a $320 million net loss in the second quarter of 2020 compared with a $397 million profit in the same period last year largely due to event cancellation losses from COVID-19, natural catastrophes and civil unrest, the insurer reported Thursday.

The net loss was the result of significant impacts from the COVID-19 pandemic and consequent economic downturn as well as above average catastrophe losses, said David H. Long, Liberty Mutual Chairman and Chief Executive Officer.

The largest driver of the COVID-19 impact was event cancellation product line, which contributed approximately 9 points,” said Dennis Langwell, executive vice president and president of Liberty’s global risk solutions segment, on the earnings call. He attributed about $100 million to property-related losses and expected litigation costs and about $260 million to contingent lines event cancellation.

Incurred losses for COVID-19 amounted to $529 million in the quarter, with roughly half of these losses related to event cancellation. Based on our size and industry footprint, these losses fall within its expectations for an event of this magnitude.

The insurer has “seen some losses come in but not a lot” for coronavirus-related workers compensation losses, Mr. Langwell said.

But this isn’t over – we don’t know how workers compensation will play out for additional exposures in subsequent periods,” he said. “We expect the impact of COVID-19 coupled with the low interest rate environment – to be a catalyst for more meaningful rate increase in workers compensation going forward.”

Mr. Langwell said the insurer applied exclusions for pandemics to event cancelation policies beginning in January 2020 and estimates that it could see about $50 million related to additional event cancelations in 2021.

Catastrophe losses of $878 million were up $384 million from the prior year quarter and resulted primarily from a high frequency of severe storm activity and include $147 million of losses related to civil unrest.

On the investment side, realized gains from the sale of fixed maturities were more than offset by losses in its partnership portfolio, which are booked on a quarter lag. Liberty Mutual’s investment income declined to $144 million in the second quarter from $1.37 billion in the same quarter in 2019, according to the insurer’s financial analysis.

Liberty Mutual reported revenue of $10.17 billion for the second quarter, a 5.7% dip in from the same quarter 2019.

In the global retail markets segment, which includes personal and small U.S. business lines, net written premium declined 5.7% in the second quarter 2020 to $6.86 million, but the combined ratio held almost steady at 98.9%.