Mercury Insurance Back in the Black for Fourth Quarter 2011

Mercury Quarterly ProfitsMercury Insurance’s profits surged in the fourth quarter of 2011 after losing $3.78 million in the previous quarter, according to financial statements released by the company.

The company’s fourth-quarter profits came in at about $79.5 million.

Yearly profits rose for Mercury between 2010 and 2011. Profits for 2010 came in at $152.2 million, while last year saw the company making $191.2 million. That represents a year-to-year increase of more than 25 percent.

The company fared well in the fourth quarter despite a small dip in investment income–which saw a 3.3 percent drop–and the presence of a handful of events that inflicted significant losses.

Windstorms and severe rainstorms in California led to an estimated $25 million in pre-tax losses, and homeowners sinkhole claims in Florida cost the company $19 million pre-tax.

Mercury saw a 0.8 percent increase in net premiums written between 2010 and 2011.

Mercury stock was down 4.5 percent for the day at approximately 2 p.m. EST.

With the latest financial report, Mercury becomes one of a growing group of homeowners and car insurance companies recovering from huge losses caused by summer weather events that destroyed tens of billions of dollars’ worth of property and gouged insurers’ bottom lines.

Allstate reported at the beginning of the month that its quarterly profits rose 340 percent between the third and fourth quarters of last year. And Progressive reported that it made $76.3 million in December 2011–which was down from the month before but still up 73 percent from August, when the insurer saw the lowest profits in two years.

An Insurance Information Institute survey indicated that the majority of executives at the major property-casualty insurers believe that the industry is on the road to recovery.

Mercury currently has the 13th largest share of the American private passenger coverage market, according to the latest data from the National Association of Insurance Commissioners. The company had $2.07 billion in premiums written at that time.

About a third of the company’s auto premiums were collected from California drivers.

About Matthew Morisset
Matthew Morisset is a proud alumnus of the University of Redlands, where he obtained a degree in English Literature. Utilizing his passion for analysis and writing, Matthew looks for important trends in the auto insurance industry and their implications for consumers and the market as a whole.

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