Mercury General Corp. (MCY), the California-based automobile insurer, fell the most in almost a year after profit missed analysts’ estimates as the company incurred an expense tied to policies sold in prior periods.
The insurer slid 5.8 percent to $38.44 at the close in New York, the biggest drop since Aug. 8. The company has declined 16 percent this year, compared with a 10 percent gain in the Russell 1000 Index. (RIY)
Mercury reported a net loss of $5.3 million for the quarter, compared with a profit of $57.3 million a year earlier, the Los Angeles-based insurer said today in a statement. Operating income, which excludes some investment results, dropped to 19 cents a share, compared with 76 cents a year earlier, missing the 66-cent average estimate of five analysts surveyed by Bloomberg.
The company added $23 million to reserves in the quarter, “largely the result of re-estimates of California bodily-injury losses which have experienced higher average severities and more late-reported claims,” according to the statement.
Catastrophes cost the insurer $8 million in the quarter, compared with $3 million a year earlier, led by wind and hail in the Midwest region, the firm said. Net investment income was $31.7 million, down 12 percent from the same period in 2011.
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