Mercury General Corp. on Monday reported a third quarter profit, reversing a year-ago loss, as the home and auto insurer benefited from revenue growth and lower catastrophe losses.
The L.A. company reported net income of $66.2 million ($1.21 a share), compared with a net loss of $3.8 million (-7 cents) in the same period a year earlier. Revenue rose 19 percent to nearly $732 million.
Operating income, which excludes realized investment gains and losses, fell 14 percent to 62 cents. Analysts surveyed by Thomson Reuters on average expected 57 cents a share on revenue of $690 million.
Net premiums written rose 3.4 percent to nearly $685 million.
Catastrophe losses during the quarter amounted to $1 million, largely from wind and hail storms in the Midwest. That compares with $4 million a year earlier, largely due to Hurricane Irene.
“The company is currently profitable in a number of states and has been actively addressing profitability through a combination of rate and underwriting changes and cost management initiatives,” said Chief Executive Gabe Tirador in a statement.
For example, in California – the company’s largest market – Mercury General implemented a roughly 4 percent rate increase for its personal automobile insurance, effective for new and renewed policies on or after October 26.
Directors authorized a small increase in the company’s quarterly dividend to about 61 cents a share, the company said.
The markets were closed Monday and Tuesday because of Hurricane Sandy. Mercury General shares on Wednesday closed up 52 cents, or 1.3 percent, to $40.53 on the New York Stock Exchange.