Mercury Insurance Group

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Mercury Insurance Group
public
Traded as NYSEMCY
Industry Insurance
Founded 1961
Headquarters 4484 Wilshire Boulevard
Los Angeles, California
Key people
Gabe Tirador, CEO & President, George Joseph, Founder & Chairman
Revenue $3.09 billion USD (2006) [1]
Number of employees
5,100
Website www.mercuryinsurance.com

Mercury Insurance Group is an American automobile and property insurance company founded by George Joseph in 1961. The company is headquartered in Los Angeles, CA.

History[edit]

George Joseph founded Mercury Insurance in 1961 after working in the industry for a few years. Created to be a low cost alternative to larger insurance companies, Mercury Insurance found a profitable niche by offering private passenger automobile policies at a reduced premium for better than average risks. The key to this strategy was, and continues to be very tight underwriting and tight claims handling. The company operated solely in California until 1990, and since then has started expanding into a few other tough market states where nationwide carriers had ceased to operate.

On October 14, 2005, Fitch Ratings affirmed its 'A' long-term issuer rating on Mercury General Corporation and its 'A' rating on Mercury's senior unsecured notes due 2011.[2]

Criticism[edit]

A March 2007 market conduct exam by the California Department of Insurance alleged that Mercury Insurance may have repeatedly engaged in practices that discriminated against active members of the U.S. military, the unemployed, those of certain occupations such as bartenders and painters, and unmarried adults living together. Additionally the company was alleged to have been inconsistent in its application of certain discounts, which resulted in some of its customers being overcharged.[3]

Representatives of Mercury Insurance were quick to argue that the leak of the conduct exam was a politically motivated move meant to benefit California Insurance Commissioner Steve Poizner, a Republican candidate for California governor in the 2010 gubernatorial election.[4]

Subsidary: Workmen's Auto Insurance Company[edit]

Workmen's Auto Insurance Company (Workmen's) is a nonstandard auto insurance company. For the first 65 years of business it was family owned and operated by the Shammas family. Today Workmen’s is a wholly owned subsidiary of Mercury General Corporation. The company is headquartered in downtown Los Angeles. Workmen’s sells personal lines automobile insurance mainly through independent agents. The Company is licensed in 22 states and actively doing business in seven states – California, Florida, Georgia, Idaho, Nebraska, Nevada, and Utah. Workmen’s works with small independent agents, often located in small towns and rural areas, this is a crucial part of its business model.

History[edit]

Workmen’s Auto Insurance Company was incorporated in 1949 in Los Angeles, CA by R. Leslie Kelley, the originator of Kelley Blue Book. In 1959, Mr. Kelley sold the Company to Mr. Nickolas N. Shammas,[5] a prominent businessman in downtown Los Angeles.

Mr. Shammas wanted to diversify his investments, believing that insurance nicely balanced his other core businesses, automobile dealerships and commercial real estate.[6] During the majority of the 45 years that Mr. Shammas owned Workmen’s it was a small California auto insurance company that wrote about $20 to $30 million in premiums each year. In 1987 with the passing of Prop 103, Workmen’s decided to expand beyond California at this point so as not to have all its eggs in the California insurance market basket.

Mr. Shammas died of lung cancer in the summer of 2003. At that time his eldest daughter, Carole Shammas, stepped in to take a more active role in the Company. For 14 years the Company was owned by 3 generations of the Shammas Family – matriarch, Jeanette H. Shammas (37.4%), daughters, Carole Shammas and Diane Shammas (60.4%) and granddaughter, Julia Holter (2.2%).[7]

At its height from 2002 to 2005 Workmen’s conducted business in 16 states and wrote as much as $130 million in premiums.[7] Thereafter, cyclical trends in insurance and then the Great Recession of 2008 led the Company to downsize.

In December 2009, the company's 60th anniversary, the brand was refreshed with a new logo, website and image.

Effective January 2, 2015 Workmen’s became a wholly owned subsidiary of Mercury General Corporation. The Shammas Family entered the negotiation the last quarter of 2014, and it was approved by the California Department of Insurance in December 2014. The new ownership provided the financial backing Workmen’s needed to grow and serve the nonstandard driver even better.

Corporate Leadership[edit]

Below is the list of Company Presidents:

  • 1949 to 1959: R. Leslie Kelley
  • 1960 to 1975: Nickolas N. Shammas
  • 1976 to 1987: Nelson C. Neall
  • 1988 to 1997: George A. Nevitt
  • 1998 to May 2004: Robert J. Sharp
  • June 2004 to June 2012: Nicholas J. Lannutti[8]
  • July 2012 to October 2013: Carole Shammas
  • November 2013 to Present: Denise M. Tyson[9]

The current Executive Team consists of:

  • Denise M. Tyson: President[9]
  • Lisa Campbell: Vice President, Sales[10]
  • Shaukat Badani: Vice President, Claims[11]

Current Products[edit]

  • Auto Insurance: Workmen’s offers one main type of policy for vehicle insurance in the United States. They sell non-standard car insurance to individuals that are unable to secure coverage through standard insurance companies. This can be due to a driving record with accidents and/or tickets, prior DUI, the driver's age, vehicle type, or others.

Social Media[edit]

In mid-2013 Workmen’s started a Social Media campaign by creating official Facebook,[12] LinkedIn[13] and Yelp[14] pages that they are using to connect with producers, policyholders and future business partners by using today’s technology. In addition, they are continuously posting photos of their agents’ offices on Instagram under the hashtag #workmens. In 2014 they launched a mobile app for iOS and Android where their policyholders can view their policy, make a payment and report a claim.

Competition and Memberships[edit]

Workmen’s competitors vary depending on the state but in general its major competitors include Infinity Property & Casualty Corporation, Dairyland also known as Sentry Insurance, Access, Alliance United and Foremost acquired by Farmers Insurance Group. Workmen’s is a member of PCI,[15] Property Casualty Insurers Association of America and very active in its local affiliate ACIC.[16] As a small company, it is not rated by A.M. Best.

Legal[edit]

Workmen's in order to be compliant with the law, each year has to file an annual statement with the California Department of Insurance.[17][18] The company is also required to have a National Association of Insurance Commissioners number (NAIC#13250). This number is required to be used at all times as it allows NAIC to regulate all insurance companies conduct in the respective state or territory they have business in order to protect the interests of insurance consumers.[19][20]

See also[edit]

References[edit]

  1. ^ MCY: Key Statistics for MERCURY GENERAL CP - Yahoo! Finance
  2. ^ "Fitch Affirms Mercury General's Senior Debt & IFS Ratings". 
  3. ^ http://www.sfgate.com/cgi-bin/blogs/nov05election/detail?entry_id=61065
  4. ^ http://articles.latimes.com/2010/apr/13/business/la-fi-mercury13-2010apr13
  5. ^ "Nickolas N. Shammas". 
  6. ^ "The Shammas Group". 
  7. ^ a b "Workmen's Annual Statement filed with the California Department of Insurance" (PDF). 
  8. ^ "Nick Lannutti LinkedIn". 
  9. ^ a b "Denise Tyson LinkedIn". 
  10. ^ "Lisa Campbell LinkedIn". 
  11. ^ "Shaukat Badani LinkedIn". 
  12. ^ "Workmen's Facebook Page". 
  13. ^ "Workmen's LinkedIn Page". 
  14. ^ "Workmen's Yelp Page". 
  15. ^ "PCI". 
  16. ^ "ACIC". 
  17. ^ "Oficcially Filed Reports of Examination". 
  18. ^ "CDI - Workmen's Company Profile". 
  19. ^ "NAIC" (PDF). 
  20. ^ "NAIC's Website". 

External links[edit]