Mercury General Corp shares plunged 16 percent Monday after the auto and home insurer reported a fourth quarter net loss, due to a nearly $142 million loss in its investment portfolio and claims from last year’s wildfires.

Los Angeles-based Mercury reported a net loss of $168 million (-$3.07 per share), compared with net income of $44.6 million (81 cents) a year ago. Net premiums earned fell 7.5 percent to $680.1 million. Net investment income fell 5 percent to $34.9 million.

On a conference call with analysts, Chief Executive Gabriel Tirador called the results “very disappointing,” and said the company had taken several cost cutting actions. The company has frozen salaries for all employees, halted hiring except for certain positions, and is evaluating other measures, he said.

Incurred during the quarter were about $20 million of losses related to the Southern California wildfires in October 2008 and poor results from its New Jersey operations, the company said.

The company, which writes automobile insurance mainly in California, posted an operating loss of 48 cents a share, compared with operating profit of 69 cents in the same period in 2007. Analysts surveyed by Thomson First Call had expected a profit of 72 cents a share, excluding special items.

Mercury General’s combined ratio, which measures claims and expenses as a percentage of premiums, was unfavorable at 113 percent, meaning the company’s premiums were not covering its base insurance costs. A year ago the percentage was about 99 percent.

Shares closed down $6.75 to $34.45 on the New York Stock Exchange.