Mercury Insurance 2011 Annual Report Download - page 97

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MERCURY GENERAL CORPORATION AND SUBSIDIARIES
NOTES STATEMENTS TO CONSOLIDATED FINANCIAL—(Continued)
A summary of net realized investment gains is as follows:
Year Ended December 31,
2011 2010 2009
(Amounts in thousands)
Net realized gains from investments and other liabilities:
Fixed maturities ............................................... $54,112 $ 5,909 $255,195
Equity securities ............................................... (4,854) 46,547 83,452
Short-term investments ......................................... 139 18 76
Option and short sale transactions ................................. 9,000 4,615 7,721
Total .................................................... $58,397 $57,089 $346,444
Net realized gains from investments included gains of $49.4 million, $52.5 million and $338.7 million
related to trading securities which were still held at December 31, 2011, 2010, and 2009, respectively.
Gross gains and losses realized on the sales of investments, excluding option and short sale transactions, are
shown below:
Year Ended December 31,
2011 2010 2009
(Amounts in thousands)
Gross
Realized
Gains
Gross
Realized
Losses Net
Gross
Realized
Gains
Gross
Realized
Losses Net
Gross
Realized
Gains
Gross
Realized
Losses Net
Fixed maturities .......... $ 2,675 $(10,712)$ (8,037)$ 8,754 $ (3,812)$4,942 $ 1,918 $ (8,589)$ (6,671)
Equity securities .......... 41,872 (15,847) 26,025 16,793 (15,905) 888 20,558 (70,686) (50,128)
Short-term investments ..... 120 0 120 64 0 64 356 (3,902) (3,546)
Contractual Maturity
At December 31, 2011, fixed maturity holdings rated below investment grade and non-rated comprised
3.7% of total investments at fair value. Additionally, the Company owns securities that are credit enhanced by
financial guarantors that are subject to uncertainty related to market perception of the guarantors’ ability to
perform. Determining the estimated fair value of municipal bonds could become more difficult should markets
for these securities become illiquid. The estimated fair values at December 31, 2011 by contractual maturity are
shown below. Expected maturities will differ from contractual maturities because borrowers may have the right
to call or prepay obligations with or without call or prepayment penalties.
Estimated Fair Value
(Amounts in thousands)
Fixed maturities:
Due in one year or less ................................. $ 30,756
Due after one year through five years ..................... 370,609
Due after five years through ten years ..................... 556,519
Due after ten years .................................... 1,450,334
Mortgage-backed securities ................................. 37,371
Total ........................................... $2,445,589
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