Georgia Insurance

Standard & Poor’s today assigned its provisional “A” for issuers rating Mercury General Corp. (Mercury). The view is stable.

At the same time, S & P has assigned its provisional findings “A” Rating up to $ 150 million of debt priority, Mercury, with a final maturity of less than 10 years and his “A” and “A-” Mercury notation shelf $ 300 million for the elderly and registration of subordinated debt, respectively.

Merkur, founded in 1961, is a property / Accident insurance holding company whose principal operating assets are as follows:

Mercury Casualty Co., first and foremost, a writer of personal car insurance, which also owns writing house “multi-risk and commercial automobile lines.

Mercury Insurance Co., one of the only writers of personal auto insurance.

In 2000, Mercury wrote enterprises with more than 90 percent of its total revenue contribution in California. The company operates several insurers staff much smaller than its operations in Oklahoma, Texas, Georgia, Illinois, Florida, Virginia, and several other countries.

Rating major factors:

The profitability. Mercury was sent a consistent operational results extremely strong for at least the last five years. Loss of control, the group was strong color. During this period, Mercury’s Combined ratios have averaged over 10 points lower than those achieved by S & P’s peer-group companies interactive evaluated.

Capital. The capital is extremely strong, both for companies operating as a group and the holding company, borrowers. The capital of score calculated by S & P’s risk-based capital model of damage, the insurer is nearly twice as high as the model of “AAA” threshold.

Management, Business Strategy and position management, led by Mercury’s founder, and is deeply. The company is the sixth largest writer of auto insurance in California and in competition with a number of companies much larger and have significantly more resources. But its relationship with its independent agents, long the only type of distribution, and it uses a key to its profitability, is as stable as it appreciated by each insurer. The management of this relationship and has parlayed the low price level in the insurance Merkur sells its products in a very strong and stable economy of the book. The strategy of maintaining the effectiveness of its law enforcement but also effective in technology and applications for subscription cements the strength of the organization.

The geographical concentration. Compensation part of these forces is the concentration of enterprises in California. Although California is larger and more diversified, the Company is exposed to the first line on a regulatory and legislative framework, rather than on more than one, where a climate conducive to an important State may be a deterioration in another sector. But the group has over many years, and management is working closely with the legislature to promote a personalized treatment for lines of the industry.

S & P expects, he told Mercury to continue using their strength and the Agency of operating systems to produce results significantly higher than in most of its competitors in California, although small loophole could allow intermediaries on the mandate as competitors try to gain access to the Company customers. In addition, he believes that Merkur expands its operations in Georgia, Florida, Illinois, Oklahoma, Texas, and a few other countries, and the proportion of the total premium was written outside of California could double within five years. The activation must be very hard to continue at least the next two years on the holding company and, in general, the operating companies, S & P said.