California-based Mercury General Corporation reported that net income was $68.8 million, or $1.26 per share (diluted), in the first quarter 2004 compared with $42.1 million, or $0.77 per share (diluted), in the same period for 2003.
Included in net income are net realized investment gains, net of tax, of $3.7 million, or $0.07 per share (diluted), in the first quarter of 2004 compared with net realized investment losses, net of tax benefit, of $0.5 million, or $0.01 per share (diluted), for the same period in 2003.
Company-wide net premiums written were $630.3 million in the first quarter 2004, a 17% increase over first quarter 2003 net premiums written of $538.8 million. California net premiums written were $500.1 million in the quarter, an increase of approximately 10% over 2003. Non-California net premiums written were $130.2 million in the quarter, a 52% increase over 2003. Non-California net premiums represented approximately 21% of the company’s total first quarter net premiums written, up from 16% in the first quarter of 2003.
The company’s combined ratio (GAAP basis) was 89.1% in the first quarter of 2004 compared with 94.4% in the same period for 2003. Rate increases taken during 2003 and positive development of approximately $15 million on the 2003 and prior period accident year loss reserves contributed to the improvement in the combined ratio.
Net investment income of $25.7 million (after tax $22.9 million) in the
first quarter of 2004 decreased by 4.4% over the same period in 2003. The after-tax yield on investment income was 3.7% on average assets of $2.5 billion (fixed maturities and equities at cost) for the quarter. This compares with an after tax yield on investment income of 4.3% on average investments of $2.2 billion (fixed maturities and equities at cost) for the same period in 2003.
In 2003, the company surpassed three of its California competitors moving up from the sixth largest writer of private passenger automobile insurance in California to become the third largest based on direct premiums written.
The company began issuing private passenger automobile insurance policies in Arizona in April 2004 marking the 10th state where the company sells automobile insurance.
Was this article valuable?
Here are more articles you may enjoy.