Mercury General Q1 Profit Rose 63%

Mercury General Q1 Profit Rose 63%

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

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

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

The company's California net premiums written came in at $500.1 million, up 10 percent from one year ago. The company's non-California net premiums written were reported at $130.2 million for the quarter, a 52 percent improvement from one year ago. Non-California net premiums represented some 21 percent of Mercury's total first-quarter net premiums written, up from 16 percent 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. Mercury attributed the improved combined ratio figure to premium rate hikes taken during 2003, as well as positive development of some $15 million on the 2003 and prior period accident-year loss reserves.

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

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