Mercury General Q1 Profit Rose 63%

NU Online News Service, May 3, 3:40 p.m.EDT?Mercury General Corp., a major auto insurer inCalifornia, reported a 63 percent rise in its first-quarter profit,posting $68.8 million in income for the quarter compared with $42.1million reported during the corresponding period in 2003.[@@]

The company also announced that it began issuing privatepassenger auto insurance policies in Arizona last month, making itthe tenth state where it sells automobile insurance.

The insurer reported that its company-wide net premiums writtenwere $630.3 million for the first quarter, a 17 percent increasefrom $538.8 million reported one year earlier.

The company's California net premiums written came in at $500.1million, up 10 percent from one year ago. The company'snon-California net premiums written were reported at $130.2 millionfor the quarter, a 52 percent improvement from one year ago.Non-California net premiums represented some 21 percent ofMercury's total first-quarter net premiums written, up from 16percent a year earlier.

The company's combined ratio also improved during the quarter,moving down to 89.1 from 94.4 reported one year ago. Mercuryattributed the improved combined ratio figure to premium rate hikestaken during 2003, as well as positive development of some $15million on the 2003 and prior period accident-year lossreserves.

The company's investment income dropped slightly, however.Mercury reported $25.7 million in net investment income, a 4.4percent drop from one year ago.

Based in Los Angeles, Mercury General underwrites all riskclassifications of auto insurance, as well as homeowners,mechanical breakdown, commercial and dwelling fire insurance, andcommercial property insurance. The company markets its policiesthrough some 2,700 independent agents.