Mercury General Corporation (NYSE: MCY), a major California automobile insurer, with operations in a number of other states, reported today that net operating earnings for the first quarter of 2001 were $21.9 million, or $.40 per share (diluted), compared with $29.0 million, or $.53 per share (diluted) in 2000. Including realized capital gains and losses, per share net income (diluted) was $.45 in the quarter compared to $.55 in the first quarter of 2000.
Company wide premiums written in the quarter were $343.2 million, a 6.5% increase over 2000. California premiums written in the quarter were $303.5 million, a 6.4% increase over 2000.
The loss ratio (GAAP basis) was 74.2% in the quarter compared to 70.1% in 2000. The higher loss ratio in the quarter, as compared to the first quarter of 2000, was largely due to an increase in recorded severity on California automobile claims. In addition, the Company experienced a significant increase in claim frequency in its California homeowner's line due to poor weather conditions in the quarter.
The expense ratio (GAAP basis) was 26.8% in the quarter compared to 26.9% in 2000.
Investment income in the quarter increased 9.9% to $28.0 million. After taxes, per share (diluted) investment income was $.45 compared with $.42 in 2000. The after tax yield on average investments of $1.8 billion (fixed maturities and equities at cost) was 5.52% for the quarter compared with 5.56% obtained for the year ended 2000.
On April 27, 2001, the Board of Directors declared a quarterly dividend of $.265 per share to be paid on June 28, 2001 to holders of record on June 15, 2001. The Company's book value per share at March 31, 2001 was $19.31 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 March 31, 2001 2000 Net Premiums Written $343,212 $322,294 Net Premiums Earned 323,772 304,655 Paid Losses and Loss Adjustment Expenses 244,068 214,363 Incurred Losses 240,217 213,644 Net Investment Income 28,019 25,484 Net Operating Income (a) 21,858 28,975 Capital Gains, net of tax 2,850 963 Net Income $24,708 $29,938 Basic Average Shares Outstanding 54,154,216 54,160,431 Diluted Average Shares Outstanding 54,350,923 54,263,243 Basic Per Share Data Earnings Per Share $0.46 $0.55 Diluted Per Share Data Net Operating Income $0.40 $0.53 Capital Gains (Losses), net of tax $0.05 $0.02 Earnings Per Share $0.45 $0.55 Operating Ratios--GAAP Basis (b) Loss Ratio 74.2% 70.1% Expense Ratio 26.8% 26.9% Combined Ratio 101.0% 97.0% (a) Net Income, excluding capital gains, net of tax. (b) Generally Accepted Accounting Principles.
SOURCE: Mercury General Corporation
Contact: Gabriel Tirador, CFO of Mercury General Corporation,
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