Mercury General Reports Higher Profit

NU Online News Service, July 28, 9:23 a.m.EDT?Mercury General Corp., a major California autoinsurer, improved its second-quarter results yesterday, posting a$43.4 million net profit, which compares with $1.3 million for theperiod last year when the company sustained realized investmentlosses.

The insurer said the figure for company-wide premiums writtenalso improved to $548.5 million during the past quarter, up 22.6percent from $447.3 million reported one year ago, thanks to bothpolicy count growth and rate increases. The combined ratio alsoimproved to 94.3 percent, down from 96.9 percent during the 2002second quarter.

Mercury General reiterated a couple of developments that tookplace in the past quarter. It noted that the California Departmentof Insurance has approved rate hikes in its personal automobileinsurance by 6.9 percent for Mercury Casualty Company andCalifornia Automobile Insurance Company, and by 3.8 percent inMercury Insurance Company. These rate boosts, the company said,were implemented on June 23.

The company also noted that it is in discussions with New Jerseyinsurance regulators to enter that state's personal automobilemarket. The insurer added that if it does receive the finalapproval, the company will start its New Jersey operations beforethe end of the current quarter.

In this initial phase, some 50 agents will be appointedthroughout the state. "New Jersey continues the company's expansionoutside of California and marks the ninth state in which thecompany will write automobile insurance business," Mercury Generalsaid.

Based in Los Angeles, the company underwrites all riskclassifications of auto insurance. It also offers homeowners,mechanical breakdown, commercial and dwelling fire insurance, andcommercial property insurance.

Mercury General markets its policies through some 2,700independent agents, a third of which are located in California.Last year, the company posted more than $1.7 billion in sales.