Mercury Insurance 2010 Annual Report Download - page 63

Download and view the complete annual report

Please find page 63 of the 2010 Mercury Insurance annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 126

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126

December 31, 2010
AAA AA(2) A(2) BBB(2) Non-Rated/Other Total
(Amounts in thousands)
Corporate securities:
Communications .......... — — — 6,770 — 6,770
Consumer—cyclical ....... ———— 125 125
Energy .................. — — — 4,897 7,745 12,642
Basic materials ........... — — — 4,130 — 4,130
Financial ................ 5,438 18,485 13,993 7,526 21,646 67,088
Utilities ................. — — — 3,341 1,107 4,448
Total ............... 5,438 18,485 13,993 26,664 30,623 95,203
5.7% 19.4% 14.7% 28.0% 32.2% 100.0%
Collateralized debt obligations:
Corporate ................ ————55,692 55,692
Total ............... ————55,692 55,692
100.0% 100.0%
Total ............... $291,872 $971,327 $903,249 $311,550 $174,282 $2,652,280
11.0% 36.6% 34.1% 11.7% 6.6% 100.0%
(1) Insured municipal bonds based on underlying ratings: AAA: $17,818, AA: $526,536, A: $655,150, BBB:
$101,056, Non-rated/Other: $150,822
(2) Intermediate ratings are offered at each level (e.g., AA includes AA+, AA and AA-).
(1) Municipal Securities
The Company had $2.4 billion at fair value and at amortized cost in municipal bonds at December 31, 2010,
with a net unrealized gain of $10.5 million. Over half of the municipal bond positions are insured by bond
insurers. For insured municipal bonds that have underlying ratings, the average underlying rating was A+ at
December 31, 2010.
The following table presents the Company’s insured municipal bond portfolio by bond insurer at
December 31, 2010 and 2009:
December 31,
2010 2009
Municipal bond insurer Rating(1) Fair Value Rating(1) Fair Value
(Amounts in thousands)
NATL-RE (MBIA) ..................................... BBB $ 784,243 BBB $ 736,741
AMBAC .............................................. CCC 260,138 CC 223,262
FSA ................................................. AA 197,107 AA 199,386
XLCA ................................................ CC 49,169 CC 46,060
ASSURED GTY ....................................... AA 39,824 AA 42,966
RADIAN ............................................. BB 6,522 BB 14,074
CIFG ................................................ NR 16,958 CC 17,262
ACA ................................................. NR 14,706 NR 14,469
FGIC ................................................ NR 8,922 NR 3,885
Other ................................................ NR 73,793 NR 92,553
$1,451,382 $1,390,658
(1) Management’s estimate of average of ratings issued by Standard & Poor’s, Moody’s, and Fitch.
53