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Mercury General Corporation Announces Third Quarter Results; Gabriel Tirador Named President and Chief Operating Officer
PRNewswire
LOS ANGELES

Mercury General Corporation (NYSE: MCY), a major California automobile insurer with operations in a number of other states, reported today that net operating earnings in the third quarter of 2001 were $30.2 million, or $.56 per share (diluted), compared with $27.0 million, or $.50 per share (diluted) in 2000. For the full nine months, net operating earnings were $78.6 million, or $1.45 per share (diluted), compared with $81.6 million, or $1.50 per share (diluted) in 2000. Per share net income (diluted), including net realized investment gains, was $.59 for the third quarter and $1.53 for the full nine months, compared with $.51 and $1.54 respectively, in 2000.

Company-wide premiums written in the third quarter were $373.7 million, a 16.6% increase over 2000. California premiums written in the quarter were $325.7 million, a 14.9% increase over 2000.

The loss ratio (GAAP basis) was 71.3% in the third quarter and 72.5% for the full nine months, compared to 71.9% and 71.3%, respectively, in 2000.

The expense ratio (GAAP basis) was 26.2% in the third quarter and 26.5% for the full nine months, compared to 26.2% and 26.8%, respectively, in 2000.

Investment income in the quarter increased 8.1% to $29.0 million. After taxes, at an effective rate of 14.3% versus 10.4% in 2000, per share (diluted) investment income was $.46 in the third quarter, compared with $.44 in 2000. The after-tax yield on average investments of $1.8 billion (fixed maturities and equities at cost) was approximately 5.38% for the quarter, compared with 5.56% for all of 2000.

On October 26, 2001, the Board of Directors appointed Gabriel Tirador to the position of President and Chief Operating Officer. George Joseph, the Company's Chairman and CEO has also been the Company's President since October of 2000. Mr. Tirador is 37 years old and has served as the Company's Vice President and Chief Financial Officer since February of 1998. In October of 2000, Mr. Tirador's operational duties were expanded to include responsibility over Company systems, claims and underwriting operations. Theodore Stalick, the Company's Chief Accounting Officer, was appointed Vice President and Chief Financial Officer.

The Board of Directors declared a third quarter dividend of $.265 per share to be paid on December 27, 2001 to holders of record on December 14, 2001. The Company's book value per share at September 30, 2001 was $19.92 per share.

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. The statements contained in this press release are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: changes in the demand for the Company's insurance products, and in general economic conditions; the possibility actual loss experience may vary adversely from the actuarial estimates made to determine the Company's loss reserves; legislation adverse to the automobile insurance industry or business generally may be enacted in California or other states; the presence of competitors with greater financial resources and the impact of competitive pricing and marketing efforts; and various legal, regulatory and litigation risks. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see the Company's filings with the Securities and Exchange Commission.

                       MERCURY GENERAL CORPORATION

                    SUMMARY OF OPERATING RESULTS (000)

                                                Quarter Ended September 30,

                                                    2001           2000
  Net Premiums Written                            $373,718       $320,516
  Net Premiums Earned                              351,896        315,108
  Paid Losses and Loss Adjustment Expenses         234,778        209,173
  Incurred Losses                                  250,939        226,706
  Net Investment Income                             29,043         26,865
  Net Operating Income (A)                          30,245         27,015
  Capital Gains, net of tax                          1,810            406
  Net Income                                       $32,055        $27,421

  Basic Average Shares Outstanding              54,182,065     54,074,298

  Diluted Average Shares Outstanding            54,385,345     54,223,764

  Basic Per Share Data
  Earnings Per Share                                 $0.59          $0.51

  Diluted Per Share Data
  Net Operating Income                               $0.56          $0.50
  Capital Gains, net of tax                          $0.03          $0.01
  Earnings Per Share                                 $0.59          $0.51

  Operating Ratios--GAAP Basis (B)
  Loss Ratio                                         71.3%          71.9%
  Expense Ratio                                      26.2%          26.2%
  Combined Ratio                                     97.5%          98.1%


                                            Nine months Ended September 30,

                                                    2001           2000
  Net Premiums Written                          $1,067,675       $956,111
  Net Premiums Earned                            1,013,839        931,950
  Paid Losses and Loss Adjustment Expenses         706,002        634,132
  Incurred Losses                                  734,577        664,609
  Net Investment Income                             85,003         78,536
  Net Operating Income (A)                          78,628         81,551
  Capital Gains, net of tax                          4,600          1,810
  Net Income                                       $83,228        $83,361

  Basic Average Shares Outstanding              54,167,910     54,098,916

  Diluted Average Shares Outstanding            54,363,277     54,230,720

  Basic Per Share Data
  Earnings Per Share                                 $1.54          $1.54

  Diluted Per Share Data ©
  Net Operating Income                               $1.45          $1.50
  Capital Gains, net of tax                          $0.08          $0.03
  Earnings Per Share                                 $1.53          $1.54

  Operating Ratios--GAAP Basis (B) ©
  Loss Ratio                                         72.5%          71.3%
  Expense Ratio                                      26.5%          26.8%
  Combined Ratio                                     99.0%          98.1%


   (A) Net Income, excluding capital gains, net of tax.
   (B) Generally Accepted Accounting Principles
   © Some numbers may not sum due to rounding

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SOURCE: Mercury General Corporation

Contact: Mercury General Corporation Investor Relations Department,
+1-323-937-1060

Website: http://www.mercuryinsurance.com/

Company News On-Call: http://www.prnewswire.com/comp/554587.html


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