Liberty Mutual says profit grew by $US492 million ($649.04 million) to $US1.01 billion ($1.32 billion) last year due to strong premium growth.

The result comes despite a 26.8% increase in catastrophe losses to $US1.67 billion ($2.2 billion) compared with 2015.

The combined operating ratio deteriorated 0.6 percentage points to 98.4%. Net written premium grew 3.4% to $US35.71 billion ($47.1 billion).

Net investment income was down slightly to $US2.56 billion ($3.37 billion) from $US2.65 billion ($3.49 billion) in 2015.

Chairman and CEO David Long says growth remains “healthy” despite higher catastrophe losses and trends in motor insurance.

In the fourth quarter Liberty announced its move to acquire specialist international insurer Ironshore for $US3 billion ($3.95 billion).

“Ironshore, and its accomplished management team, will bring additional scale, expertise, innovation and market relationships to our existing global specialty business, and will solidify our position as a leader in the specialty space,” Mr Long said.

The acquisition is expected to close in the first half of this year half, pending regulatory approvals.