Mercury Insurance Company

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Mercury Insurance Company is a Brea, California-based, wholly-owned subsidiary of Mercury Casualty Company, and is a publicly owned firm that has operations in 14 states, and offers several categories of insurance, from auto to homeowner's to renters to commercial business policies. It is the largest agency-based automobile insurance underwriter in California.

Mercury Insurance Company was founded by George Joseph, an Appalachian-born son of a Lebanese immigrant, in 1961. Born in 1921, he had served in WWII, used the GI bill to attend Harvard, and settled in Los Angeles, where he worked for Occidental Life Insurance Company as an actuary. He sold life insurance at night. As a result of his intense involvement with the insurance business, he developed a theory that, by screening auto insurance applicants much more thoroughly than was the prevailing industry standard, he could offer insurance policies at a reduced premium cost to drivers who had previously been classified as "bad drivers," one of the two broad classifications used at the time. By scrupulous attention to details of the driver's history and circumstances, he could determine who among the drivers in this broad classification were actually reasonable risks and could be offered lower premiums. He founded Mercury to test his theory. He named the company after the Roman god of commerce and good fortune.

Mercury was immediately successful with this business model, which for the time was revolutionary. Unlike life insurance, which had a different rate classification for almost any risk, car insurance only had the two general categories of "good driver" and "bad driver." Joseph sold to risks such as students, the temporarily unemployed, and new residents-all of them classes that other companies avoided like the plague. Given the choice between the very expensive "high-risk" premiums offered by other firms and the affordable rates offered by Mercury, customers flocked to the new firm. Mercury has been growing ever since.

From the beginning, Mercury car insurance has been sold by independent agents. This holds true today, and is unusual in the present-day environment, where insurance companies are increasingly selling directly to the consumer. It was by instructing his agents to conduct their screening in person, asking detailed questions of applicants, taking photographs of insured vehicles from different angles, and similar methods of information gathering that Joseph was able to slot his potential customers so carefully, offering them lower rates for Mercury car insurance while still not extending his risk unduly.

Today, Mercury has assets in the billions, and is classified A+ by financial rating services. It is the classic American success story.

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