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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000891092-04-003804.txt : 20040802
<SEC-HEADER>0000891092-04-003804.hdr.sgml : 20040802
<ACCEPTANCE-DATETIME>20040802090105
ACCESSION NUMBER:		0000891092-04-003804
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040702
ITEM INFORMATION:		
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20040802

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MERCURY GENERAL CORP
		CENTRAL INDEX KEY:			0000064996
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				952211612
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12257
		FILM NUMBER:		04943726

	BUSINESS ADDRESS:	
		STREET 1:		4484 WILSHIRE BOULEVARD
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90010
		BUSINESS PHONE:		2139371060

	MAIL ADDRESS:	
		STREET 1:		LOS ANGELES
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>e18661_8k.txt
<DESCRIPTION>FORM 8-K
<TEXT>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

        Date of Report (Date of earliest event reported): August 2, 2004

                           MERCURY GENERAL CORPORATION
               (Exact Name of Registrant as Specified in Charter)

          California                      0-3681                 95-221-1612
- -------------------------------         ------------         -------------------
(State or Other Jurisdiction of         (Commission           (I.R.S. Employer
        Incorporation)                  File Number)         Identification No.)

                             4484 Wilshire Boulevard
                          Los Angeles, California 90010
                    (Address of Principal Executive Offices)

                                   ----------

                                 (323) 937-1060
              (Registrant's telephone number, including area code)

                                   ----------


<PAGE>

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits

      (c)   Exhibits.

            99.1  Press Release, dated August 2, 2004, issued by Mercury General
                  Corporation, furnished pursuant to Item 12 of Form 8-K.

Item 12. Results of Operations and Financial Condition

      The following information is furnished pursuant to Item 12, "Results of
Operations and Financial Condition," and shall not be deemed "filed" for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or
otherwise subject to the liabilities of that section.

      On August 2, 2004, Mercury General Corporation issued a press release
announcing its financial results for the second quarter ended June 30, 2004. A
copy of the press release is attached hereto as Exhibit 99.1.

      The information contained in this Current Report, including the exhibit,
shall not be incorporated by reference into any filing of Mercury General
Corporation, whether made before or after the date hereof, regardless of any
general incorporation language in such filing.


                                      -2-
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Date: August 2, 2004                                MERCURY GENERAL CORPORATION



                                                    By: /s/ THEODORE STALICK
                                                        ------------------------
                                                    Name: Theodore Stalick
                                                    Its: Chief Financial Officer


                                      -3-
<PAGE>

                                  Exhibit Index

Exhibit 99.1. Press Release, dated August 2, 2004, issued by Mercury General
Corporation.


                                      -4-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>e18661ex99_1.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
                                                                    Exhibit 99.1

         Mercury General Corporation Announces Second Quarter Results

    LOS ANGELES, Aug. 2 /PRNewswire-FirstCall/ -- Mercury General Corporation
(NYSE: MCY) reported today net income of $78.1 million, or $1.43 per share
(diluted), in the second quarter 2004 compared with $43.4 million, or
$0.80 per share (diluted), in the same period for 2003.  For the first six
months of 2004, net income was $147.0 million ($2.69 per share-diluted)
compared to net income of $85.5 million ($1.57 per share-diluted) in the same
period for 2003.  Included in net income are net realized gains, net of tax,
of $7.9 million ($0.14 per share-diluted) in the second quarter 2004 compared
to net realized losses, net of tax benefit, of $0.1 million ($0.00 per
share-diluted) for the second quarter 2003, and net realized gains, net of
tax, of $11.6 million ($0.21 per share-diluted) for the first six months of
2004 compared to net realized losses, net of tax benefit, of $0.6 million
($0.01 per share-diluted) for the same period in 2003.
    Company-wide net premiums written were $648.5 million in the second
quarter 2004, an 18.2% increase over second quarter 2003 net premiums written
of $548.5 million, and were $1,278.7 million for the first six months of 2004,
a 17.6% increase over the same period in 2003.  California net premiums
written were $498.7 million in the quarter, an increase of approximately 8.5%
over 2003, and were $998.8 million for the first six months of 2004, a 9.5%
increase over the same period in 2003.  Non-California net premiums written
were $149.8 million in the quarter, a 68.5% increase over 2003, and were
$279.9 million for the first six months of 2004, a 60.3% increase over the
same period in 2003.  Non-California net premiums written represented
approximately 23.1% of the Company's total second quarter net premiums
written, up from 16.2% in the second quarter of 2003.
    The Company's combined ratio (GAAP basis) was 88.3% in the second quarter
and 88.7% for the first six months of 2004 compared with 94.3% for both the
second quarter and the six month period in 2003.  Rate increases taken during
2003 and positive development of approximately $25 million for the six month
period ended June 30, 2004 on the 2003 and prior accident year loss reserves
contributed to the improvement in the combined ratio.
    Net investment income of $26.2 million (after tax $23.2 million) in the
second quarter of 2004 decreased by 1.9% compared to the same period in 2003.
The after-tax yield on investment income was 3.6% on average assets of $2.6
billion (fixed maturities and equities at cost) for the quarter.  This
compares with an after tax yield on investment income of 4.2% on average
investments of $2.3 billion (fixed maturities and equities at cost) for the
same period in 2003.
    In June 2004, the Company began writing private passenger automobile
insurance in Pennsylvania, marking the eleventh state in which the Company
writes automobile insurance.
    On July 30, 2004, the Board of Directors declared a quarterly dividend of
$0.37 per share for the second quarter, representing a 12% increase over the
quarterly dividend amount paid in 2003.  The dividend is to be paid on
September 30, 2004 to shareholders of record on September 15, 2004.  The
Company's book value per share at June 30, 2004 was $24.29.

    Mercury General Corporation and its subsidiaries are a multiple line
insurance organization offering predominantly personal automobile and
homeowners insurance through a network of independent agents and brokers in
many states.  For more information, visit our website at
www.mercuryinsurance.com.  The Company will be hosting a conference call and
webcast today at 10:00 A.M. Pacific time where management will discuss results
and address questions.  The teleconference and webcast can be accessed by
calling (877) 807-1888 or by visiting www.mercuryinsurance.com.  A replay of
the call will be available beginning at 1:30 P.M. Pacific time and running
through August 9, 2004.  The replay telephone numbers are (800) 642-1687 (USA)
or (706) 645-9291 (International).  The conference ID# is 8698528.  The replay
will also be available on the Company's website shortly following the call.

    The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements.  The statements contained in
this press release are forward-looking statements based on the Company's
current expectations and beliefs concerning future developments and their
potential effects on the Company.  There can be no assurance that future
developments affecting the Company will be those anticipated by the Company.
Actual results may differ from those projected in the forward-looking
statements.  These forward-looking statements involve significant risks and
uncertainties (some of which are beyond the control of the Company) and are
subject to change based upon various factors, including but not limited to the
following risks and uncertainties:  changes in the demand for the Company's
insurance products, and in general economic conditions; the accuracy and
adequacy of the Company's pricing methodologies; market risks associated with
the Company's investment portfolio; uncertainties related to estimates,
assumptions and projections generally; the possibility actual loss experience
may vary adversely from the actuarial estimates made to determine the
Company's loss reserves; inflation and changes in economic conditions; the
Company's ability to obtain and the timing of regulatory approval for
requested rate changes; legislation adverse to the automobile insurance
industry or business generally that may be enacted in California or other
states; the presence of competitors with greater financial resources and the
impact of competitive pricing; changes in driving patterns and loss trends;
acts of war and terrorist activities; court decisions and trends in litigation
and health care and auto repair costs and marketing efforts; and various
legal, regulatory and litigation risks.  The Company undertakes no obligation
to publicly update or revise any forward-looking statements, whether as the
result of new information, future events or otherwise.  For a more detailed
discussion of some of the foregoing risks and uncertainties, see the Company's
filings with the Securities and Exchange Commission.

    Mercury General Corporation
    Information Regarding Non-GAAP Measures
    The Company has presented information within this document containing
operating measures which in management's opinion provide investors useful
industry specific information to evaluate and perform meaningful comparisons
of the Company's performance but that may not be presented in accordance with
Generally Accepted Accounting Principles ("GAAP").  These measures are not
intended to replace, and should be read in conjunction with, the GAAP
financial results.  The Company has reconciled these measures with the most
directly comparable GAAP measure in the supplemental schedule entitled,
"Summary of Operating Results."
    Net Premiums Written represents the premiums charged on policies issued
during a fiscal period.  Net Premiums Earned, the most directly comparable
GAAP measure, represents the portion of premiums written that is recognized as
income in the financial statements for the periods presented and earned on a
pro-rata basis over the term of the policies.  Net Premiums Written is meant
as supplemental information and is not intended to replace Net Premiums
Earned.  It should be read in conjunction with the GAAP financial results.
    Paid Losses and Loss Adjustment Expenses is the portion of Incurred Losses
and Loss Adjustment Expenses, the most directly comparable GAAP measure,
excluding the effects of changes in the loss reserve accounts.  Paid Losses
and Loss Adjustment Expenses is meant as supplemental information and is not
intended to replace Incurred Losses and Loss Adjustment Expenses.  It should
be read in conjunction with the GAAP financial results.


                     Mercury General Corporation and Subsidiaries
                           Summary of Operating Results
                          (000's) except per share amounts
                                   (unaudited)

                                      Quarter Ended       Six Months Ended
                                        June 30,              June 30,
                                      2004     2003       2004        2003
    Net premiums written           $648,449  $548,451  $1,278,732  $1,087,201
    Net premiums earned             620,432   525,072   1,212,369   1,025,738
    Paid losses and loss
     adjustment expenses            348,993   333,126     711,899     653,725
    Incurred losses and loss
     adjustment expenses            380,526   357,565     752,522     699,111
    Net investment income            26,212    26,718      51,940      53,644
    Net realized investment gains
     (losses), net of tax             7,876      (112)     11,564        (606)
    Net income                      $78,134   $43,372    $146,950     $85,480

    Basic average shares
     outstanding                     54,459    54,403      54,445      54,391

    Diluted average shares
     outstanding                     54,628    54,547      54,616      54,518

    Basic Per Share Data
    Net income                        $1.43     $0.80       $2.70       $1.57

    Net realized investment gains
     (losses), net of tax             $0.14     $0.00       $0.21      ($0.01)

    Diluted Per Share Data
    Net income                        $1.43     $0.80       $2.69       $1.57

    Net realized investment gains
     (losses), net of  tax            $0.14     $0.00       $0.21      ($0.01)

    Operating Ratios -- GAAP (a)
     Basis
    Loss ratio                        61.3%     68.1%       62.1%       68.1%
    Expense ratio                     27.0%     26.2%       26.6%       26.2%
    Combined ratio                    88.3%     94.3%       88.7%       94.3%

    Reconciliations of Operating
     Measures to Comparable GAAP
     (a) Measures

    Net premiums written           $648,449  $548,451  $1,278,732  $1,087,201
    Increase in unearned premiums   (28,017)  (23,379)    (66,363)    (61,463)
    Net premiums earned            $620,432  $525,072  $1,212,369  $1,025,738

    Paid losses and loss
     adjustment expenses           $348,993  $333,126    $711,899    $653,725
    Increase in net losses and
     loss adjustment expense
     reserves                        31,533    24,439      40,623      45,386
    Incurred losses and loss
     adjustment expenses           $380,526  $357,565    $752,522    $699,111

    (a) Generally Accepted Accounting Principles


                   Mercury General Corporation and Subsidiaries
                          Other Supplemental Information
                              (000's) except ratios
                                   (unaudited)

                                        Quarter ending,     Six Months Ended,
                                            June 30,           June 30,
                                         2004      2003      2004      2003
    Total California Operations (1)
    Net Premiums Written               $498,697  $459,564  $998,795  $912,511
    Net Premiums Earned                 495,137   443,821   979,919   866,834

    Loss Ratio                            60.7%     68.5%     62.0%     69.3%
    Expense Ratio                         26.0%     25.5%     25.9%     25.5%
    Combined Ratio                        86.7%     94.0%     87.9%     94.8%

    California Automobile lines
    Net Premiums Written               $450,959  $421,092  $912,952  $842,066
    Net Premiums Earned                 454,548   412,500   902,344   806,423

    Loss Ratio                            62.7%     69.0%     63.7%     69.7%
    Expense Ratio                         26.1%     25.1%     25.9%     25.1%
    Combined Ratio                        88.8%     94.1%     89.6%     94.8%

    California Homeowners line
    Net Premiums Written                $39,725   $31,850   $71,751   $58,389
    Net Premiums Earned                  33,375    25,953    64,843    49,944

    Loss Ratio                            35.7%     58.7%     41.4%     64.2%
    Expense Ratio                         24.5%     25.8%     25.1%     26.0%
    Combined Ratio                        60.2%     84.5%     66.5%     90.2%

    Non-California Operations (2)
    Net Premiums Written               $149,752   $88,887  $279,937  $174,690
    Net Premiums Earned                 125,295    81,251   232,450   158,904

    Loss Ratio                            64.0%     65.6%     62.1%     62.1%
    Expense Ratio                         30.6%     29.9%     29.8%     29.7%
    Combined Ratio                        94.6%     95.5%     91.9%     91.8%


                                            At       At
                                         June 30, June 30,
    Policies-in-force (000's)              2004     2003

    California Personal Auto              1,048    1,009
    California Commercial Auto               21       19
    Non-California Personal Auto            252      160
    California Homeowners                   202      169
    Florida Homeowners                       13        8

    All ratios are calculated on GAAP basis.
    (1) Total California operations includes homeowners, auto, commercial
        property and other immaterial California business lines
    (2) Includes all states except California


                  Mercury General Corporation and Subsidiaries
                  Condensed Balance Sheet and Other Information
                             (000's) except per-share amounts

                                             June 30, 2004   December 31, 2003
                                              (unaudited)

    Investments - available for sale
      Fixed maturities at market
       (amortized cost $2,118,544 in 2004
       and $1,856,083 in 2003)                  $2,164,629        $1,945,309
      Equity securities at market (cost
       $209,805 in 2004 and $223,113 in
       2003)                                       232,227           264,393
      Short-term cash investments, at
       cost, which approximates market             302,534           329,812
            Total investments                    2,699,390         2,539,514
    Net receivables                                331,951           299,094
    Deferred policy acquisition costs              146,436           132,059
    Other assets                                   160,963           149,099
      Total assets                              $3,338,740        $3,119,766

    Loss and loss adjustment expenses             $837,145          $797,927
    Unearned premiums                              727,414           663,004
    Other liabilities                              326,048           278,618
    Notes payable                                  124,729           124,714
    Shareholders' equity                         1,323,404         1,255,503
      Total liabilities and shareholders'
       equity                                   $3,338,740        $3,119,766

    Common stock - shares outstanding               54,482            54,424
    Book value per share                            $24.29            $23.07
    Statutory surplus                        $1.25 billion     $1.17 billion
    Portfolio duration                           3.5 years         3.8 years

SOURCE  Mercury General Corporation
    -0-                             08/02/2004
    /CONTACT:  Theodore Stalick, VP/CFO of Mercury General Corporation,
+1-323-937-1060/
    /Web site:  http://www.mercuryinsurance.com/
    (MCY)

CO:  Mercury General Corporation
ST:  California
IN:  FIN INS
SU:  ERN CCA

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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