8-K

UNITED STATES
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): February 13, 2006

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

California	001-12257	95-221-1612
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

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

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

Not applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 425 under the Exchange Act (17 CFR 240.14.a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

                    The following information is furnished pursuant to Item 2.02, “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 February 13, 2006, Mercury General Corporation issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2005.  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.

Item 9.01.	Financial Statements and Exhibits
	(d)	Exhibits.
		99.1	Press Release, dated February 13, 2006, issued by Mercury General Corporation, furnished pursuant to Item 2.02 of Form 8-K.

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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:  February 13, 2006	MERCURY GENERAL CORPORATION
	By:	/s/ THEODORE STALICK
	Name:	Theodore Stalick
	Its:	Chief Financial Officer

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Exhibit Index

Exhibit 99.1.  Press Release, dated February 13, 2006, issued by Mercury General Corporation.

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EX-99.1

Exhibit 99.1

4484 Wilshire Boulevard
Los Angeles, California 90010
(323) 937-1060
Fax (323) 857-7125

Press Release

FOR MORE INFORMATION, CONTACT:
Theodore Stalick, VP/CFO
(323) 937-1060
www.mercuryinsurance.com
For Release:  February 13, 2006

Mercury General Corporation Announces Fourth Quarter Results

          Los Angeles, California...Mercury General Corporation (NYSE: MCY) reported today net income of $46.2 million ($0.84 per share-diluted) in the fourth quarter of 2005 compared with $74.1 million ($1.36 per share-diluted) for the same period in 2004.  For the year, net income was $253.3 million ($4.63 per share-diluted) compared to net income of $286.2 million ($5.24 per share-diluted) for the same period in 2004. 

          Net income includes net realized investment gains, net of tax, of $0.5 million ($0.01 per share-diluted) in the fourth quarter of 2005 compared with net realized investment gains, net of tax, of $4.2 million ($0.08 per share-diluted) for the same period in 2004, and net realized investment gains, net of tax, of $10.5 million ($0.19 per share-diluted) for the entire 2005 year compared with net realized investment gains, net of tax, of $16.3 million ($0.30 per share-diluted) for 2004.  Also included in net income are hurricane losses, net of tax benefit, of $16 million ($0.29 per share-diluted) in the fourth quarter of 2005 compared with no hurricane losses for the same period in 2004, and hurricane losses, net of tax benefit, of $18 million ($0.32 per share-diluted) for the entire 2005 year compared with $14 million ($0.26 per share-diluted) for the same period in 2004.  

          Company-wide net premiums written were $728.0 million in the fourth quarter 2005, an 8.0% increase over fourth quarter 2004 net premiums written of $674.2 million, and were approximately $3.0 billion for the year, an 11.5% increase over the same period in 2004.  California net premiums written were $529.5 million in the fourth quarter of 2005, an increase of 7.0% over the same period in 2004, and were approximately $2.1 billion for the year, a 6.0% increase over the same period in 2004.

          The Company’s combined ratio (GAAP basis) was 96.0% in the fourth quarter and 92.4% for the year compared with 88.6% and 89.2%, respectively, for the same periods in 2004.  During the fourth quarter of 2005, the loss ratio increased by 3.3 points for losses caused by Hurricane Wilma.  Positive development on prior accident years’ loss reserves was approximately $45 million and $58 million for the years ended December 31, 2005 and 2004, respectively.

          Net investment income of $32.2 million (after tax $27.7 million) in the fourth quarter of 2005 increased by 9.9% over the same period in 2004.  The after-tax yield on investment income was 3.4% on average assets of $3.3 billion (at cost) for the quarter.  This compares with an after tax yield on investment income of 3.6% on average investments of $2.8 billion (at cost) for the same period in 2004.

          Mercury General Corporation and its subsidiaries are a multiple line insurance organization offering predominantly personal automobile and homeowners insurance through a network of independent producers in many states.  For more information, visit the Company’s 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 (USA), (706) 679-3827 (International) 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 February 20, 2006.  The replay telephone numbers are (800) 642-1687 (USA) or (706) 645-9291 (International).  The conference ID# is 4437368.  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, inflation and in general economic conditions; the accuracy and adequacy of the Company’s pricing methodologies; adverse weather conditions or natural disasters in the markets serviced by the Company; market risks associated with the Company’s investment portfolio; uncertainties related to estimates, assumptions and projections generally; the possibility that actual loss experience may vary adversely from the actuarial estimates made to determine the Company’s loss reserves in general; 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 Company’s success in expanding its business in states outside of California;  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.

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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 with useful, industry specific information to help them 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.

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

	Quarter Ended December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
Net premiums written	$	727,956		$	674,239		$	2,950,523		$	2,646,704
Net premiums earned		732,859			668,102			2,847,733			2,528,636
Paid losses and loss adjustment expenses		460,510			394,919			1,743,909			1,481,803
Incurred losses and loss adjustment expenses		507,217			413,573			1,862,936			1,582,254
Net investment income		32,239			29,331			122,582			109,681
Net realized investment gains, net of tax		457			4,168			10,504			16,292
Net income	$	46,219		$	74,129		$	253,259		$	286,208
Basic average shares outstanding		54,603			54,506			54,566			54,471
Diluted average shares outstanding		54,756			54,683			54,717			54,633
Basic Per Share Data
Net income	$	0.85		$	1.36		$	4.64		$	5.25
Net realized investment gains, net of tax	$	0.01		$	0.08		$	0.19		$	0.30
Incurred losses from Florida Hurricanes, net of tax benefit	$	(0.29	)	$	—		$	(0.33	)	$	(0.26	)
Diluted Per Share Data
Net income	$	0.84		$	1.36		$	4.63		$	5.24
Net realized investment gains, net of  tax	$	0.01		$	0.08		$	0.19		$	0.30
Incurred losses from Florida Hurricanes, net of tax benefit	$	(0.29	)	$	—		$	(0.32	)	$	(0.26	)
Operating Ratios--GAAP (a) Basis
Loss ratio		69.2	%		61.9	%		65.4	%		62.6	%
Expense ratio		26.8	%		26.7	%		27.0	%		26.6	%
Combined ratio		96.0	%		88.6	%		92.4	%		89.2	%
Impact of Florida Hurricanes on loss ratio		-3.3	%		0.0	%		-1.0	%		-0.9	%
Reconciliations of Operating Measures to Comparable GAAP (a) Measures
Net premiums written	$	727,956		$	674,239		$	2,950,523		$	2,646,704
Decrease (increase) in unearned premiums		4,903			(6,137	)		(102,790	)		(118,068	)
Net premiums earned	$	732,859		$	668,102		$	2,847,733		$	2,528,636
Paid losses and loss adjustment expenses	$	460,510		$	394,919		$	1,743,909		$	1,481,803
Increase in net losses and loss adjustment expense reserves		46,707			18,654			119,027			100,451
Incurred losses and loss adjustment expenses	$	507,217		$	413,573		$	1,862,936		$	1,582,254

(a) Generally Accepted Accounting Principles

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

	Quarter Ended December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
California Operations (1)
Net Premiums Written	$	529,542		$	494,975		$	2,126,825		$	2,006,351
Net Premiums Earned		532,493			501,745			2,080,041			1,981,463
Loss Ratio		64.1	%		61.7	%		63.5	%		61.0	%
Expense Ratio		25.8	%		24.9	%		25.5	%		25.6	%
Combined Ratio		89.9	%		86.6	%		89.0	%		86.6	%
Non-California Operations (2)
Net Premiums Written	$	198,414		$	179,264		$	823,698		$	640,353
Net Premiums Earned		200,366			166,357			767,692			547,173
Loss Ratio		82.7	%		62.5	%		70.7	%		68.4	%
Expense Ratio		29.8	%		32.3	%		31.0	%		30.4	%
Combined Ratio		112.5	%		94.8	%		101.7	%		98.8	%
	At December 31,
	2005			2004
Policies-in-force (000’s)
California Personal Auto		1,099			1,060
California Commercial Auto		21			21
Non-California Personal Auto		371			322
California Homeowners		242			215
Florida Homeowners		15			16

Notes:
All ratios are calculated on GAAP basis.

(1)	Includes homeowners, auto, commercial property and other immaterial California business lines
(2)	Includes all states except California

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

	December 31, 2005		December 31, 2004
	(Unaudited)
Investments - available for sale
Fixed maturities at market (amortized cost $2,593,745 in 2005 and $2,164,955 in 2004)	$	2,645,555	$	2,245,311
Equity securities at market (cost $225,310 in 2005 and $210,553 in 2004)		276,108		254,362
Short-term cash investments, at cost, which approximates market		321,049		421,369
Total investments		3,242,712		2,921,042
Net receivables		390,234		367,662
Deferred policy acquisition costs		197,943		174,840
Other assets		210,662		158,480
Total assets	$	4,041,551	$	3,622,024
Loss and loss adjustment expenses	$	1,022,603	$	900,744
Unearned premiums		902,567		799,679
Other liabilities		365,004		325,029
Notes payable		143,540		137,024
Shareholders’ equity		1,607,837		1,459,548
Total liabilities and shareholders’ equity	$	4,041,551	$	3,622,024
Common stock - shares outstanding		54,605		54,515
Book value per share	$	29.44	$	26.77
Statutory surplus	$	1.49 billion	$	1.36 billion
Portfolio duration		2.9 years		3.2 years

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