Mercury General Sees 1Q Profit, Beats Street

The annualized cost savings from its cost-cut programs, however, are expected to be more than $20 million, starting from the second quarter of 2009, the company said in statement.

During the most recent quarter, net premiums written slid 8 percent to $670.9 million from $729.3 million, hurt by a 8.5 percent drop in California business and a 6.3 percent decline in other regions.

Mercury General's combined ratio increased 1.5 points to 96.9 from 95.4 during the year-ago period. Combined ratio measures the amount an insurer pays out in claims and other expenses compared with how much it earns from writing insurance policies. A ratio above 100 means the insurer is paying out more in claims and expenses than it takes in from writing policies.

Shares of Mercury General rose 70 cents, or 2.1 percent, to $34.04 in morning trading Monday.