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Mercury General Corporation Announces Third Quarter Results and Increases Quarterly Dividend LOS ANGELES , Nov. 2 , 2021 / PRNewswire / -- Mercury General Corporation ( NYSE : MCY ) reported today for the third quarter of 2021 : Exhibit 99.1 Three Months Ended September 30 , 2021 2020 Consolidated Highlights Change $ % 2021 Nine Months Ended September 30 , 2020 Change $ % ( 000's except per - share amounts and ratios ) Net premiums earned ( 2 ) $ 940.941 $ 899,304 $ 41,637 4.6 $ Net premiums written ( 1 ) ( 2 ) $ 1,014,967 $ 942,888 $ 72,079 7.6 $ 2,783,682 2,922,691 $ $ 2,633,775 2,716,016 $ 149,907 5.7 $ 206,675 7.6 Net realized investment ( losses ) gains , net of tax ( 3 ) $ ( 34,399 ) $ 50,904 $ ( 85,303 ) ( 167.6 ) $ 44,993 $ ( 22,482 ) $ 67,475 NM Net income $ 1,288 $ 118,857 $ ( 117,569 ) ( 98.9 ) $ 217,464 $ 207,864 $ 9,600 4.6 Net income per diluted share $ 0.02 $ 2.15 $ ( 2.13 ) ( 99.1 ) $ 3.93 $ 3.75 $ 0.18 4.8 Operating income ( 1 ) $ 35,687 $ 67,953 $ ( 32,266 ) ( 47.5 ) $ 172,471 $ 230,346 $ ( 57,875 ) ( 25.1 ) Operating income per diluted share ( 1 ) $ 0.64 $ 1.23 $ ( 0.59 ) ( 48.0 ) $ 3.11 $ 4.16 $ ( 1.05 ) ( 25.2 ) Catastrophe losses net of reinsurance Combined ratio ( 5 ) ( 4 ) $ 25,000 99.0 $ 29,000 $ ( 4,000 ) % 94.3 % ( 13.8 ) 4.7 pts $ 85,000 $ 43,000 $ 42,000 97.7 95.8 % 93.0 % 2.8 pts NM = not meaningful ( 1 ) ( 2 ) ( 3 ) ( 4 ) ( 5 ) These measures are not based on U.S. generally accepted accounting principles ( " GAAP " ) , are defined in " Information Regarding GAAP and Non - GAAP Measures " and are reconciled to the most directly comparable GAAP measures in " Supplemental Schedules . " The Company's net premiums earned and written were reduced by approximately $ 21 million and $ 128 million for the three and nine months ended September 30 , 2020 , respectively , due to premium refunds and credits to its eligible policyholders under the " Mercury Giveback " program for reduced driving and business activities following the outbreak of the COVID - 19 pandemic . Excluding these premium refunds and credits , net premiums earned and net premiums written increased 2.2 % and 5.2 % , respectively , for the three months ended September 30 , 2021 from the corresponding period in 2020 , and 0.8 % and 2.8 % , respectively , for the nine months ended September 30 , 2021 from the corresponding period in 2020 . Net realized investment ( losses ) gains before tax were $ ( 44 ) million and $ 64 million for the three months ended September 30 , 2021 and 2020 , respectively , and $ 57 million and $ ( 28 ) million for the nine months ended September 30 , 2021 and 2020 , respectively . The changes in fair value of the Company's investments are recorded as part of net realized investment gains or losses in its consolidated statements of operations due to the adoption of the fair value option for its investments as permitted under GAAP . Catastrophe losses due to the events that occurred during the nine months ended September 30 , 2021 totaled approximately $ 91 million , with reinsurance benefits used for these losses , resulting primarily from the deep freeze and other extreme weather events in Texas and Oklahoma , wildfires and winter storms in California , and the impact of Hurricane Ida in New Jersey and New York . These losses were partially offset by favorable development of approximately $ 6 million on prior years ' catastrophe losses . Catastrophe losses due to the events that occurred during the nine months ended September 30 , 2020 totaled approximately $ 48 million , with no reinsurance benefits used for these losses , resulting primarily from wildfires and windstorms in California and extreme weather events outside of California . These losses were partially offset by favorable development of approximately $ 5 million on prior years ' catastrophe losses . The Company experienced favorable development of approximately $ 8 million and $ 2 million on prior accident years ' loss and loss adjustment expense reserves for the three months ended September 30 , 2021 and 2020 , respectively , and favorable development of approximately $ 24 million and unfavorable development of approximately $ 26 million on prior accident years ' loss and loss adjustment expense reserves for the nine months ended September 30 , 2021 and 2020 , respectively . The year - to - date favorable development in 2021 was primarily attributable to lower than estimated losses and loss adjustment expenses in the private passenger automobile and homeowners lines of insurance business , partially offset by unfavorable development in the commercial automobile line of insurance business . The year - to - date unfavorable development in 2020 was primarily attributable to higher than estimated losses and loss adjustment expenses in the homeowners and commercial automobile lines of insurance business , partially offset by favorable development in the California private passenger automobile line of insurance business . ( 000's except average annual yield ) Investment Results Three Months Ended September 30 , 2021 2020 Nine Months Ended September 30 , 2021 2020 Average invested assets at cost ( 1 ) $ 4,751,171 $ 4,328,804 $ 4,643,916 $ 4,256,759 Net investment income ( 2 ) Before income taxes $ After income taxes $ 32,334 28,708 $ $ 32,140 28,789 $ 95,566 $ $ 85,168 $ 100,801 89,757 Average annual yield on investments - after income taxes ( 2 ) 2.4 % 2.7 % 2.5 % 2.8 % ( 1 ) ( 2 ) Fixed maturities and short - term bonds at amortized cost ; equities and other short - term investments at cost . Average invested assets at cost are based on the monthly amortized cost of the invested assets for each period . Net investment income before and after income taxes for the three months ended September 30 , 2021 remained relatively steady compared to the corresponding period in 2020 , resulting largely from a lower average yield on investments mostly offset by higher average invested assets . Lower net investment income before and after income taxes for the nine months ended September 30 , 2021 compared to the corresponding period in 2020 resulted largely from a lower average yield on investments , partially offset by higher average invested assets . Average annual yield on investments after income taxes for three and nine months ended September 30 , 2021 decreased compared to the corresponding periods in 2020 , primarily due to the maturity and replacement of higher yielding investments purchased when market interest rates were high with lower yielding investments , s a result of decreasing market interest rates . The Board of Directors declared a quarterly dividend of $ 0.6350 per share . The dividend will be paid on December 30 , 2021 to shareholders of record on December 16 , 2021 . Mercury General Corporation and its subsidiaries are a multiple line insurance organization offering predominantly personal automobile and homeowners insurance through a network of independent producers in many states . For more information , visit the Company's website at www.mercuryinsurance.com . The Private Securities Litigation Reform Act of 1995 provides a " safe harbor " for certain forward - looking statements . Certain statements contained in this report 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 , inflation and general economic conditions , including general market risks associated with the Company's investment portfolio ; the accuracy and adequacy of the Company's pricing methodologies ; catastrophes in the markets served by the Company ; uncertainties related to estimates , assumptions and projections generally ; the possibility that actual loss experience may vary adversely from the actuarial estimates made to determine the Company's loss reserves in general ; the Company's ability to obtain and the timing of the approval of premium rate changes for insurance policies issued in the states where it operates ; legislation adverse to the automobile insurance industry or business generally that may be enacted in the states where the Company operates ; the Company's success in managing its business in non - California states ; the presence of competitors with greater financial resources and the impact of competitive pricing and marketing efforts ; the Company's ability to successfully manage its claims organization outside of California ; the Company's ability to successfully allocate the resources used in the states with reduced or exited operations to its operations in other states ; changes in driving patterns and loss trends ; acts of war and terrorist activities ; pandemics , epidemics , widespread health emergencies , or outbreaks of infectious diseases ; court decisions and trends in litigation and health care and auto repair costs ; and legal , cybersecurity , 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 Annual Report on Form 10 - K filed with the Securities and Exchange Commission on February 16 , 2021 . MERCURY GENERAL CORPORATION AND SUBSIDIARIES SUMMARY OF OPERATING RESULTS ( 000's except per - share amounts and ratios ) ( unaudited ) Three Months Ended September 30 , 2021 2020 Nine Months Ended September 30 , 2021 2020 Revenues : Net premiums earned Net investment income Net realized investment ( losses ) gains Other Total revenues $ 940,941 32,334 ( 43,543 ) $ 899,304 32,140 64,436 $ 2,783,682 95,566 $ 2,633,775 100,801 56,953 ( 28,458 ) 2,481 2,894 932.213 998,774 7,883 2,944,084 6,810 2,712,928 Expenses : Losses and loss adjustment expenses 697,947 Policy acquisition costs 153,142 618,657 157,365 1,981,519 Other operating expenses 80,238 71,859 468,556 216,723 Interest 4,267 4,262 Total expenses ( Loss ) income before income taxes Income tax ( benefit ) expense Net income 935,594 852,143 ( 3,381 ) 146,631 12,845 2,679,643 264,441 ( 4,669 ) 27,774 $ 1,288 118,857 46,977 217,464 $ 1,765,627 463,604 219,519 12,786 2,461,536 251,392 43,528 207,864 Basic average shares outstanding Diluted average shares outstanding Basic Per Share Data 55,371 55,358 55,367 55,375 55,358 55,375 55,358 55,358