Thanks to a decline in expenses, Mercury General Corp. on Monday reported third quarter net income that beat Wall Street expectations.

The property and casualty insurer reported net income of nearly $158 million ($2.85 per share), compared with a loss of nearly $141 million (-$2.57) a year ago. Net premiums earned fell 6 percent to $654 million for the quarter.

Total expenses dropped 11 percent to $632 million. The company earlier this year laid off employees and cut other expenses due to slower business in the poor economy.

Operating profit, an industry metric that excludes investment gains and losses, rose 17 percent to $46.3 million (84 cents). Analysts surveyed by Thomson Reuters on average were expecting an operating profit of 66 cents per share.

Mercury’s combined ratio, which is the percentage of premiums an insurer pays out in claims and expenses, was 96.4 percent, down from 102 percent a year ago. A ratio over 100 shows unprofitable underwriting.

The company increased its quarterly dividend by 1.7 percent to 59 cents a share.

Shares were up 52 cents, or 1.5 percent, to $36.99 in midday trading on the New York Stock Exchange.