Mercury Insurance 2014 Annual Report Download - page 5

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3
2014 ANNUAL REPORT
continues to be extremely competitive, we will continue to
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of business as long as we believe we can do so prudently.
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campaign and plan to spend $48 million in advertising in
2015 up from $23 million in 2014. We currently operate
in 13 states representing approximately 56% of the U.S.
population. The economics make it more cost effective
to advertise on a national basis rather than on a local
basis. The national advertising campaign should bring
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acquisition in early January and appointed Jeffrey Schroeder
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Mercury’s product team in 2010 and most recently was a
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Workmen’s non-standard auto product will compliment
Mercury’s more preferred product offerings. We believe
the Workmen’s auto product will allow Mercury to better
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We pride ourselves at having a strong balance sheet.
At year-end, our Shareholders’ Equity was $1.9 billion
and our statutory underwriting leverage remains conser-
vative, with a premium to surplus ratio of 2.0 to 1. Our primary
insurance subsidiaries carry an A+ rating with A.M. Best.
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the annual dividend rate to $2.47 per share, continuing to
provide a generous dividend yield based on the recent
market price of our stock. Our strong capital position has
allowed us to pay a dividend in recent years where the
dividend payout ratio was above 100%. We recognize we
cannot, on a long term basis, have a payout ratio over 100%;
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levels over a long period of time. Our Board will continue
to evaluate our dividend policy on a quarterly basis and
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earnings, tax law changes and future prospects before a
decision is made on the dividend amount.
We hope you will be able to attend our annual meeting on
May 13, 2015.
Sincerely,
LETTER TO SHAREHOLDERS
OPERATING LEVERAGE
(net premiums written/policyholders surplus as ratio)
2.5
2.0
1.5
1.0
0.5
0.0
10 11 12 13 14
DIVIDENDS PER SHARE
(in dollars)
2.50
2.40
2.30
2.20
2.00
10 11 12 13 14
2.10
Gabriel Tirador
President and Chief Executive Ocer
George Joseph
Chairman of the Board
NUMBER OF AGENTS
9,000
8,000
5,000
3,000
4,000
2,000
0
1410 11 12 13
6,000
7,000
1,000