is worse in California and has more potential for Mercury to capitalize upon. Every major carrier in CA has applied for DOUBLE DIGIT INCREASES. 21st CENTURY is pulling out all together. State Farm anounced yesterday they have put a moratorium on writing any NEW BUSINESS. While Mercury's exposure to the homeowner market is low, the potential to pick up the creme of the crop is tremendous. Look for this line of Mercury's business to grow at double to triple the rate the auto side is growing. Mercury was recently approved for a 6.9% increase to take affect on 5-15 for their homeowner business. THIS STOCK IS A BUY, BUY, BUY......$60 to $70 in 1 to 2 years,
The reason for the mass exit of the HOI market, Toxic Mold, has yet to play out. In the legal community, this is a virtual feeding frenzy with the insurance companied being the ones fed upon. I work in Residential Real Estate and those in the Inspection Business see this as the most major developement in Residential Real Estate in the past half century. Insurance is about accurately pricing risks. In this instance, the ability to price accurately seems impossible.
On the other hand, I have no desire to sell MCY. They are positioned nicely to benefit from a firming martket. When a market firms, and prices rise, the low cost provider benefits. That is where we are at right now and I see no reason to sell.
Lastly, when Charlie Munger refers to Mr. Joseph as one of the most astute minds in the business, that is pretty high praise.