Los Angeles-based Mercury General Corporation reported net income of $60.4 million, or $1.10 per share (diluted), in the first quarter 2005 compared with $68.8 million, or $1.26 per share (diluted), in the same period for 2004. Included in net income are net realized investment gains, net of tax, of $2.7 million, or $0.05 per share (diluted), in the first quarter of 2005 compared with net realized investment gains, net of tax, of $3.7 million, or $0.07 per share (diluted), for the same period in 2004.
Company-wide net premiums written were $729.8 million in the first quarter 2005, a 15.8 percent increase over first quarter 2004 net premiums written of $630.3 million. California net premiums written were $526.1 million in the quarter, an increase of 5.2 percent over 2004. Non-California net premiums written were $203.8 million in the quarter, a 56.5 percent increase over 2004. Non-California net premiums written represented 27.9 percent of the Company’s total first quarter net premiums written, up from 20.7 percent in the first quarter of 2004.
The Company’s combined ratio (GAAP basis) was 92.6 percent in the first quarter of 2005 compared with 89.1 percent in the same period for 2004. During the first quarter of 2005, the loss ratio was negatively impacted by increased loss frequency, particularly in the homeowners line of business, caused by near record rainfall in the state of California. Positive development on prior period loss reserves was approximately $20 million and $15 million, respectively, for the periods ending March 31, 2005 and March 31, 2004.
Net investment income of $28.8 million (after tax $25.0 million) in the first quarter of 2005 increased by 12 percent over the same period in 2004. The after-tax yield on investment income was 3.4 percent on average assets of $2.9 billion (fixed maturities and equities at cost) for the quarter. This compares with an after tax yield on investment income of 3.7 percent on average investments of $2.5 billion (fixed maturities and equities at cost) for the same period in 2004.
The Board of Directors declared a second quarter dividend of $0.43 per share, representing a 16 percent increase over the quarterly dividend amount paid in 2004. The dividend is to be paid on June 30, 2005 to shareholders of record on June 15, 2005. The Company’s book value per share at March 31, 2005 was $27.21.
Topics California Profit Loss
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