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California-based Mercury General Corporation reported that net income was $49.2 million ($0.90 per share – diluted) in the fourth quarter of 2003 compared to $17.3 million ($0.32 per share – diluted) in the same period in 2002.
Included in net income are net realized investment gains, net of tax, of $3.8 million ($0.07 per share) in the fourth quarter of 2003 compared to net realized investment losses, net of tax benefit, of $14.2 million ($0.26 per share) for the same period in 2002. Net income in the fourth quarter of 2003 also includes approximately $16 million ($10.2 million after tax benefit or $0.19 per share) in losses resulting from the October 2003 Southern California fire storms.
For the year, net income was $184.3 million ($3.38 per share – diluted) in 2003 compared to net income of $66.1 million ($1.21 per share – diluted) in 2002. Net realized investment gains, net of tax, was $7.3 million ($0.13 per share) in 2003 compared to net realized investment losses, net of tax benefit, of $45.8 million ($0.84 per share) in 2002.
Company-wide premiums written were $591.4 million in the fourth quarter of 2003, a 17.2 percent increase over 2002, and $2.3 billion for the year, a 21.6 percent increase over 2002. California premiums written were $481.7 million in the fourth quarter of 2003, a 12.6 percent increase over 2002, and $1.9 billion for the year, an 18.8 percent increase over 2002. Non-California premiums written were $109.7 million in the fourth quarter of 2003, a 43.2 percent increase over 2002 and $382.6 million for the year, a 37.7 percent increase over 2002. Non-California premiums made up 18.5 percent of fourth quarter premiums, up from 15.2 percent for the same period in 2002.
The company’s combined ratio (GAAP basis) was 94.1 percent in the fourth quarter of 2003 and 94.0 percent for the entire year compared to 97.6 percent and 98.8 percent for the respective periods of 2002. The Southern California fire storms negatively impacted the combined ratio by 2.7 percent for the fourth quarter of 2003 and 0.7 percent for the entire year of 2003.
Net investment income of $26.3 million for the fourth quarter decreased by $0.4 million over the corresponding period in 2002. The after-tax yield was 3.9 percent on average investments of $2.42 billion (fixed maturities and equities at cost) for the quarter. This compares with 4.4 percent in the fourth quarter of 2002. Net investment income for 2003 was $104.5 million compared to $113.1 million for 2002.