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Mercury General Corporation Message Board

  • wcrimi wcrimi Apr 19, 1999 11:26 AM Flag

    Mercury vs Geico


    lifornia that of a
    company? I don't have to worry about recommending
    this company to customers do I?<<

    As far
    as I know their reputation is fine. Do you know how
    their rates compare to Geico in areas where the two
    companies overlap?

    This topic is deleted.
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    • The hot stock pick of the week -

      Analysts predict strong buy on TTRIF
      and target price
      for TTRIF is $0.35 to $0.50

      1) Expect revenue
      to increase($1.2 million) and
      business expanding
      (secured $200 million in
      long-term debt

      2) New Management team will start a stock
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      This stock is going to be very hot and is about to
      Big News is coming out soon!!!

      Check it out

    • Ladies and Gentlement for your

      I have to say, I like this company. I suspect I
      have at least several months to try to find problems
      with it. If I do, I'll let you know; if I don't, I'll
      let you know- and I'll buy.



    • Thanks for the responses, it is nice to read some
      intelligent posting. I like to go these boards sometimes to
      get a general sentiment or even links to articles and
      whatnot I ordinarily would not run across. Most boards
      are really full of too much garbage. I will continue
      to post as I see necessary, but I think what is
      happening right now is fairly predictable if you follow
      this industry, and what is going to happen over the
      near term is fairly predictable. It's a chance to
      truly get a great bargain if you are a long term

    • Previous comments very appropriate. There is MUCH
      competition in the California insurance market (as an
      insurance broker and MCY shareholder, I know this). As a
      result, even though MCY's rates are much lower than most,
      people aren't bothering to shop because rates are
      declining with their existing carriers. At the
      shareholders' meeting, Mr. Joseph anticipated approximately one
      to two years for rates to start moving up, thereby
      causing people to get upset and shop again. That's when
      he feels the greatest potential will be for MCY.

      The question regarding how long George Joseph stays
      with the company came up at the meeting. He noted that
      CFO, Michael Curtius (spelling?), is the one who
      currently is the hands-on man now. Mr. Joseph spends his
      time dealing with legislation and lobbyists, the
      so-called "ethereal" endeavors. He said he has no worries
      about the company and that he has been asked this
      question since 1962.

    • if you look at mcy's history they have grown very
      rapidly once the market gets "hard". there were times
      when they doubled or tripled their premiums in a
      couple of years in the 80's when this happened. many of
      their california competetors are now operating with
      close to or over 100 combined ratios. the trough in the
      cycle may be closer than any of us suspect (perhaps
      next year). just look at the hmo biz, calpers is
      paying 10pct more on next years business. this alone
      will force medical costs up for the auto insurers.
      some return of royal globe is almost certain. it
      appears the enviornment is quickly going to get more
      hostile. anything that makes life more difficult for the
      industry is good for mcy because their combined ratio
      advantage. one of these days they may even raise prices
      which will cause premiums to grow faster than unit
      growth. who knows, it might not take 5 years, but they
      will be there to profit whenever

    • Here are my thoughts on Mercury and the industry
      in general. As everyone knows, premiums are dropping
      for the first time in something like 20 years.
      Companies have "realized" that this can be a profitable
      industry, so they come in by the droves to get a piece of
      the action. It's a cycle. As a result, among other
      causes, rates go down, which hurts profits. At the same
      time, because competition is getting so stiff,
      companies must advertise to remain in the game. This
      further hurts profits. I think that probably the smartest
      thing an insurance company can do right now is to write
      as many policies as possible, primarily because
      these things are much more profitable after the first
      year. However, don't write them to where you hurt
      yourself down the road. Eventually things will return to
      "normal" and some of the newcomers will either go out of
      business or get swallowed up. It's tough right now and who
      knows when things will turn around. I don't make
      predictions, but I believe things will be tough for a bit, but
      they will come back. It's in these times you want to
      get a good quality insurance company that knows how
      to handle themselves.

      As far as Mercury
      goes, I think they are a strong company with strong
      management. They will be fine, but profits will be hurt for a
      while. I think they have tremendous room to grow.
      Especially in their newer states. Heck, even in California.
      CA has 10% of the nations drivers, and I believe MCY
      has about 12% of the market there. I may be wrong on
      those numbers though. But all in all, they know what
      they are doing. I think they have a tremendous future
      ahead of them. I invest long term (at least 5-10
      years), so it does not bother me to buy now and if the
      price goes down, buy more and average down. But these
      are just my thoughts, take them for what they are
      worth. I enjoy intelligent conversation on these boards,
      I wish there was more of it.

    • Interesting series of thoughtful posts. Thank you

      I am still questioning:

      Can MCY emerge as a
      dominant player, or will they be marginalized by direct

      How long can Mr. Joseph continue? Is the existing
      management team "deep" enough?

      My hunch is that a
      person has at least a couple of quarters to watch this
      situation develop (absent a Buffett buyout, that is) and
      since I have just IRA money to do this with I would
      like to be very, very careful.

      No, I am not
      much of a gambling man either, I guess!

      for your help. Good investing to you-


    • thanks for the insight.

    • The greatest advantage to the agency only policy,
      besides having a loyal sales force, is that the agents
      can do "front-line" underwriting. Certain profiles
      don't make sense (e.g., person from low-income
      neighborhood, who is unemployed, driving a Ferrari with no
      lienholder). The carriers who feel they can write from a
      purely objective standpoint will not be able, at least
      in California, to discriminate against this type of
      risk; however, an agent who senses the potential for
      fraud will refuse to write this risk with a valued
      carrier. This is an example of how MCY can pay agents
      15-20% and still have lower rates and loss-ratios than
      the direct writers.

    • I would think Progressive or Allstate, I believe
      they are the biggest agency writers that would be able
      to swallow up MCY. However, I'm not a bettin' man,
      unless the odds are drastically in my favor. But I
      believe all of this speculation came from a "non-answer"
      in the conference call, which does not mean much.
      I've been behind the scenes on a few conference calls,
      and there certain things management either does not
      want to discuss or does not know about. Investors tend
      to look into things quite considerably.

      company looks really cheap right now. I originally did
      not like their agency only policy, but I think
      management has great integrity and the company will do well
      into the future. Although I think the near term will
      be rough, as it will be for all auto insurers, when
      rates rise again, the "new" players in for a buck will
      be shaken out and the best ones will come out ahead.

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