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Insurer Mercury General posts 2Q loss

295 days ago

(AP:LOS ANGELES) Mercury General lost money in its second quarter as the insurance company paid off claims related to wind and hail storms in the Midwest.

Mercury General, which writes automobile, homeowners, fire and other insurance policies, said Monday that it lost $5.3 million, or 10 cents per share, for the three months ended June 30. A year earlier it earned $57.3 million, or $1.04 per share.

Catastrophe losses, or claims paid out, rose to $8 million from $3 million mostly because of the Midwest storms. The company was also hurt by costs related to policies sold in previous periods.

Operating income, which excludes investment gains, dropped to $10.2 million, or 19 cents per share, from $41.8 million, or 76 cents per share. Revenue dropped to $647.7 million from $706.5 million, down 8 percent.

Net investment income fell to $31.7 million from $36 million. Net premiums written, a measure of the value of all new and renewal policies sold during the period, increased 2.7 percent to $653.6 million.

Total expenses climbed to $666.6 million from $630.9 million.

The Los Angeles company also declared a quarterly dividend of 61 cents per share. The dividend will be paid on Sept. 28 to shareholders of record on Sept. 14.

Shares of Mercury General Inc. slid $2, or 4.9 percent, to $38.82 in afternoon trading. Over the last year, the stock has traded in a range of $33.81 to $46.76.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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