Nov 3 (Reuters) - Auto and home insurer Mercury General Corp swung to a third-quarter loss, hurt mainly by fall in value of its corporate and equity holding.
Net loss for the quarter was $140.5 million, or $2.57 a share, compared with a net income of $63.3 million, or $1.15 a share, a year earlier.
Operating income was 72 cents a share, while analysts expected 90 cents a share.
Mercury General, which writes automobile insurance mainly in California, said net premiums earned fell 7 percent to $696.6 million in the quarter.
Net realized investment losses were $180.0 million, compared with gains of $1.3 million in the year-ago quarter.
Mercury General's combined ratio, which is the percentage of premiums an insurer has to pay out in claims and expenses, was 102 percent in the third quarter, compared with 94.2 percent a year ago.
Shares of the company were down more than 3 percent at $49.72 Monday morning on the New York Stock Exchange.

(Reporting by Anurag Kotoky in Bangalore; Editing by Anil D'Silva) ((anurag.kotoky@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: anurag.kotoky.thomsonreuters.com@reuters.net)) Keywords: MERCURYGENERAL/
* Sees negative Q4 growth rate
* Freezes new hiring except certain positions
* Posts Q3 loss of $2.57
* Q3 oper net misses estimates
* Shares down nearly 5 pct

(adds conference call details, share movement)
Nov 3 (Reuters) - Auto and home insurer Mercury General Corp said it expects growth rate to be in the negative mid-to-high single-digit range for the fourth quarter.
Mercury General, which reported a loss in the latest quarter earlier in the day, is freezing new hiring except for certain positions to address the increasing expense ratio during the soft market, its chief executive said in a conference call.
CEO Gabriel Tirador also said the company expects to change premium rates in two regions in the fourth quarter. The company, however, did not name the regions in the conference call.

"Although the competitive environment remains intense, we continue to observe more filings for rate increases than rate reductions," Tirador said.
Tirador expects to see a continued increase in the level of rate action taken by some of Mercury's competitors, he added.
The company shares, which fell as much as 5 percent in late afternoon trade, recouped some losses and were trading down 4 percent at $49.34 on the New York Stock Exchange.
Net loss for the quarter was $140.5 million, or $2.57 a share, compared with net income of $63.3 million, or $1.15 a share, a year earlier.
Operating income was 72 cents a share, while analysts expected 90 cents a share.
Mercury General, which writes automobile insurance mainly in California, said net premiums earned fell 7 percent to $696.6 million in the quarter.
Net realized investment losses were $180 million, compared with gains of $1.3 million in the year-ago quarter.
Mercury General's combined ratio, which is the percentage of premiums an insurer has to pay out in claims and expenses, was 102 percent in the third quarter, compared with 94.2 percent a year ago.
"There were many factors contributing to the increase in the combined ratio during the quarter, including higher severity in our auto line that was partially offset by reduction in frequency," CEO Tirador said.
Chief Financial Officer Theodore Stalick said Mercury's current capitalization was strong enough to absorb more shocks should they occur and that it would grow when the insurance markets start to harden.

(Reporting by Adheesha Sarkar and Anurag Kotoky in Bangalore; Editing by Anil D'Silva) Keywords: MERCURYGENERAL/ (anurag.kotoky@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: anurag.kotoky.thomsonreuters.com@reuters.net)

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