A $US697 million ($1.08 billion) liability from Hurricanes Ike and Gustav has blown a hole in third-quarter earnings at Liberty Mutual Group, with the insurer haemorrhaging 98.5% of net income.

The US firm earned a dismal $US6 million ($9.3 million) in the quarter against $US404 million ($629 million) last year.

Investment losses of $US162 million ($252 million) compounded the catastrophe losses.

Chairman, President and CEO Edmund Kelly says the “fundamental strength of the business has never been more apparent”.