In February 1994, the California Insurance Commissioner approved new rates which were designed to improve the Company's competitive position for new insureds. These rate changes, which became effective on May 1, 1994, provided for decreases in premium rates for new insureds. Several rate modifications were approved and made effective subsequent to May 1, 1994. A rate change made April 1, 1998, reduced rates by approximately 7% and was primarily made to improve Mercury's competitive position in the marketplace. Except for the April 1, 1998 rate change, the rate changes made over the last several years have been substantially revenue-neutral. The rate change made effective May 1, 1994 resulted in a substantial increase in new business being submitted to the Company. Since March 31, 1994, Private Passenger Automobile ("PPA") policies in force in California have increased from approximately 300,000 to 771,000 at December 31, 2000, an annual rate of increase of approximately 15%. Policy count growth for the year 2000 was down negligibly from 1999 reflecting increased competition in the marketplace.
Premiums earned in 2000 of $1,249.3 million increased 5.1% and net premiums written in 2000 of $1,272.4 million increased 5.5% over amounts recorded in 1999. Contributing to the overall premium written growth were initial automobile premiums in Texas from the recent Concord agency transaction, and increases in California homeowner premiums, California non-standard automobile premiums and Florida automobile premiums. The Company's core California private passenger automobile premiums were relatively flat and AMI experienced a decline in premium volume.
The Company accounts for stock-based compensation under the accounting methods prescribed by Accounting Principles Board (APB) Opinion No. 25, as allowed by Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation"(SFAS No. 123). Disclosure of stock-based compensation determined in accordance with SFAS No. 123 is presented in Note 15.
Net unrealized investment gains (losses) (classified as accumulated other comprehensive income/(loss) on the balance sheet)........ $ 30,871 $ (39,471) ======== =========
Incurred losses and loss adjustment expenses related to: Current year........................... 878,144 781,316 693,877 Prior years............................ 23,637 7,787 (9,409) -------- -------- -------- Total incurred losses and loss adjustment expenses.................................. 901,781 789,103 684,468 -------- -------- --------
Decreases in prior years incurred losses in 1998 reflects the favorable loss experience during these years attributed to a number of combined factors which produced favorable frequency and severity trends.
The Insurance Companies' statutory net income, as reported to regulatory authorities, was $103,937,000, $135,667,000 and $173,473,000 for the years ended December 31, 2000, 1999 and 1998, respectively. The statutory policyholders' surplus of the Insurance Companies, as reported to regulatory authorities, as of December 31, 2000 and 1999 was $954,753,000 and $853,794,000, respectively.
A summary of the status of the Company's plans as of December 31, 2000, 1999 and 1998 and changes during the years ending on those dates is presented below: