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 LOS ANGELES, Aug. 5 /PRNewswire/ -- Mercury General Corp. (NASDAQ: MRCY), a major California automobile insurer, reported today that net income for the quarter ended June 30, 1993 was $25.3 million, or $.93 per share, compared with $14.4 million, or $.53 per share, in 1992. Results in the second quarter a year ago reflect a one-time, pre- tax charge of $18.1 million, equal to $.44 per share after taxes, for the final settlement of the company's Proposition 103 rate refund obligation. Realized investment gains contributed $.03 per share to second quarter results in 1993 and $.07 per share in 1992. Per share results are based on 27.4 million average shares in 1993 and 27.2 million shares in 1992, adjusted for a 2-for-1 stock split effective in September 1992.
 Net income for the first six months of 1993 was $47.9 million, or $1.75 per share, compared with $32.6 million, or $1.20 per share, in the first half of 1992. Investment gains were $3.6 million, compared with $3.8 million a year ago. Per share operating earnings in the first half, excluding realized investment gains and, in the year ago period, the final charges associated with the settlement of the Proposition 103 refund obligation, were $1.67, compared with $1.56 in the 1992 first half.
 Net premiums written in the second quarter were $117.3 million, a year-to-year increase of 3.6 percent. For the full six months, premiums written increased 2.7 percent to $235.7 million.
 Reliance Insurance has joined the growing list of companies withdrawing from the California private passenger automobile insurance market. Mercury is now in the process of contracting with approximately 40 former Reliance agents, which, together with the more than 100 former Ohio Casualty and Aetna agents contracted with over the last 12 months, enlarges the company's total California agency force by over 30 percent.
 In early July, the company filed with the California Department of Insurance (DOI) revised automobile insurance rating plans proposed to become effective on Sept. 1, 1993. The new plans are designed to improve the company's competitive position with respect to new business. Overall, the revised rates would be substantially revenue-neutral, with the lower rates for new business being offset by reductions in discounts now being offered to good drivers for persistency. Typical new business rates in various territories throughout California would be reduced by some 18-19 percent.
 Underwriting results continue to be excellent. The combined ratio (GAAP basis) was 84.4 percent in the second quarter, compared with 88.1 percent in the preceding quarter and 83.2 percent in the second quarter a year ago. For the full six months, the combined ratio was 86.2 percent, compared with 87.6 percent in 1992. The loss ratio for the six month period was 61.8 percent, compared with 64.4 percent a year ago. The six month expense ratio was 24.4 percent in 1993 and 23.2 percent in 1992.
 Investment income in the second quarter was $13.6 million, which, after an effective tax rate of 10.8 percent, was equal to $.44 per share, compared with after-tax investment income of $.44 per share a year ago after an effective tax rate of 12.7 percent. Average invested assets (all fixed maturities at cost) in the second quarter were $677.3 million, a year-to-year increase of $19.9 million. The after-tax investment return in the second quarter based on amortized cost, was 7.16 percent, compared with 7.21 percent in 1992. Reflecting the lower level of current interest rates, new investments during the second quarter were made at after-tax yields which approximate 6.25 percent.
 Summary Of Operating Results (000)
 Six Months Ended Quarter Ended
 June 30, June 30,
 1993 1992 1993 1992
 Net premiums
 written $235,749 $229,640 $117,282 $113,227
 Net premiums earned 231,235 228,618 117,110 114,071
 Net investment
 income 26,994 27,235 13,580 13,567
 Settlement of
 rate refund 0 18,621 0 18,121
 Net operating
 income(a) 45,555 30,150 24,489 12,563
 Capital gains,
 net of tax 2,350 2,493 844 1,859
 Net income $47,905 $32,643 $25,333 $14,422
 Average shares
 outstanding(b) 27,339,685 27,207,344 27,352,735 27,212,506
 Per share data
 Net operating income,
 before Prop. 103
 refund $1.67 $1.56 $0.90 $0.90
 Settlement of
 rate refund 0 ($0.45) 0 ($0.44)
 Capital gains,
 net of tax $0.09 $0.09 $0.03 $0.07
 Earnings per share $1.75 $1.20 $0.93 $0.53
 Operating ratios--
 GAAP basis(c)
 Loss ratio 61.8 pct 64.4 pct(d) 59.7 pct 59.9 pct(d)
 Expense ratio 24.4 pct 23.2 pct 24.7 pct 23.3 pct
 Combined ratio 86.2 pct 87.6 pct(d) 84.4 pct 83.2 pct(d)
 (a) Net Income, excluding capital gains, net of tax.
 (b) Adjusted for 2-for-1 stock split effective in September
 (c) Generally Accepted Accounting Principles
 (d) Excludes impact of rate refund.
 -0- 8/5/93
 /CONTACT: Keith L. Parker, CFO of Mercury General, 213-937-1060/

CO: Mercury General Corp. ST: California IN: INS SU: ERN

LM-EH -- LA004 -- 9759 08/05/93 09:40 EDT
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Publication:PR Newswire
Date:Aug 5, 1993

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