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EXHIBIT 99.1
PRESS RELEASE
FOR MORE INFORMATION, CONTACT:
Gabriel Tirador, CFO
(323) 937-1060
www.mercuryinsurance.com
FOR RELEASE MONDAY, JULY 30, 2001
MERCURY GENERAL CORPORATION ANNOUNCES
SECOND QUARTER RESULTS
Los Angeles, California ..... 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 second quarter of
2001 were $26.5 million, or $0.49 per share (diluted), compared with net
operating earnings for the second quarter of 2000 of $25.6 million, or $0.47 per
share (diluted). Net operating earnings for the first six months of 2001 were
$48.4 million, or $0.89 per share (diluted) compared with $54.5 million, or
$1.01 per share (diluted) in 2000. Including realized capital gains and losses,
per share net income (diluted) was $0.49 and $0.94 for the second quarter and
first six months of 2001 compared to $0.48 and $1.03 for the second quarter and
first six months of 2000, respectively.
Company-wide premiums written in the quarter were $350.7 million, a
12.0% increase over 2000 and premiums written for the first six months were
$694.0 million, a 9.2% increase over 2000. California premiums written in the
quarter and first six months were $307.6 million and $611.1 million,
respectively, a 10.5% and 8.4% increase over the respective periods in 2000. The
primary contributors to growth in the second quarter were increased policy sales
in the California automobile insurance lines as well as increased production in
California homeowners, Florida automobile insurance and Texas automobile
insurance lines.
The loss ratio (GAAP basis) was 72.0% in the quarter and 73.1% in the
first six months of 2001 compared to 71.8% and 71.0% for the respective periods
in 2000.
The expense ratio (GAAP basis) was 26.5% in the quarter and 26.7% in
the first six months of 2001 compared to 27.2% and 27.1% for the respective
periods in 2000.
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Investment income in the quarter was $27.9 million and for the first
six months $56.0 million, a 6.7% and 8.3% increase, respectively. After taxes,
per share (diluted) investment income in the quarter was $0.45 and for the first
six months was $0.90 compared with $0.43 and $0.86 for the respective periods in
2000. The after tax yield on average investments of $1.79 billion (fixed
maturities and equities at cost) was 5.43% for the quarter compared with 5.56%
obtained for the year ended 2000.
On July 27, 2001, the Board of Directors declared a quarterly dividend
of $0.265 per share to be paid on September 27, 2001 to holders of record on
September 14, 2001. The Company's book value per share at June 30, 2001 was
$19.53 per share.
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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.
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MERCURY GENERAL CORPORATION
SUMMARY OF OPERATING RESULTS (000)
QUARTER ENDED JUNE 30,
2001 2000
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Net Premiums Written $ 350,745 $ 313,301
Net Premiums Earned 338,171 312,187
Paid Losses and Loss Adjustment Expenses 227,156 210,596
Incurred Losses 243,421 224,259
Net Investment Income 27,941 26,187
Net Operating Income (A) 26,524 25,562
Capital Gains (Losses), net of tax (59) 440
Net Income $ 26,465 $ 26,002
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Basic Average Shares Outstanding 54,167,143 54,062,288
Diluted Average Shares Outstanding 54,353,257 54,205,423
Basic Per Share Data
Earnings Per Share $ 0.49 $ 0.48
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Diluted Per Share Data
Net Operating Income $ 0.49 $ 0.47
Capital Gains (Losses), net of tax ($ 0.00) $ 0.01
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Earnings Per Share $ 0.49 $ 0.48
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Operating Ratios--GAAP Basis (B)
Loss Ratio 72.0% 71.8%
Expense Ratio 26.5% 27.2%
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Combined Ratio 98.5% 99.0%
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SIX MONTHS ENDED JUNE 30,
2001 2000
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Net Premiums Written $ 693,957 $ 635,595
Net Premiums Earned 661,943 616,842
Paid Losses and Loss Adjustment Expenses 471,224 424,959
Incurred Losses 483,638 437,903
Net Investment Income 55,960 51,671
Net Operating Income (A) 48,383 54,537
Capital Gains, net of tax 2,790 1,403
Net Income $ 51,173 $ 55,940
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Basic Average Shares Outstanding 54,160,716 54,111,360
Diluted Average Shares Outstanding 54,352,126 54,234,333
Basic Per Share Data
Earnings Per Share $ 0.94 $ 1.03
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Diluted Per Share Data (C)
Net Operating Income $ 0.89 $ 1.01
Capital Gains, net of tax $ 0.05 $ 0.03
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Earnings Per Share $ 0.94 $ 1.03
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Operating Ratios--GAAP Basis (B) (C)
Loss Ratio 73.1% 71.0%
Expense Ratio 26.7% 27.1%
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Combined Ratio 99.7% 98.1%
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(A) Net Income, excluding capital gains, net of tax.
(B) Generally Accepted Accounting Principles
(C) Some numbers may not sum due to rounding