Mercury General Q2 Loss Widens - Update

(RTTNews) - Automobile insurer Mercury General Corp. (MCY), Monday reported a second-quarter loss that widened from a year ago, hurt mainly by higher investment and catastrophe losses. Excluding special items, earnings for the quarter improved from a year ago, but missed analysts' estimates by a penny.

The Los Angeles-based insurer's second-quarter loss widened to $9.26 million or $0.17 per share from $5.26 million or $0.10 per share last year.

Operating income, which excludes some investment results, improved to $0.63 per share from $0.19 per share last year, but fell short of the $0.64 per share average estimate of four analyst polled by Thomson Reuters. Analysts' estimates typically exclude special items.

Total revenues decreased to $642.57 million from $647.71 million last year. Net premiums written rose to $665.48 million from $653.63 million a year ago.

Net realized investment losses for the quarter spiked to $67.42 million from $23.76 million a year ago.

Catastrophe losses surged 62.5 percent to $13.0 million, largely due to the tornadoes in Oklahoma and severe storms in the Midwest and the Southeast region.

Combined ratio, the percentage of revenue paid out towards insurance claims, improved to 98.7 percent from 104.5 percent last year. A ratio below 100 percent indicates that the company is making underwriting profit while a ratio above 100 percent indicates paying out more money in claims than it is receiving from premiums.

Nevertheless, Mercury General declared a quarterly dividend of $0.6125 per share, payable on September 26 to shareholders of record on September 12.

MCY is currently trading at $45.13, down $0.17 or 0.38%, on the NYSE.