Joseph said statistics showed that customers with uninterrupted coverage posed lower accident risks, and that those in congested areas were more likely to file collision and theft claims.
"Having started in this business as an aspiring actuary, I'm sold on the idea that insurance should be cost-based," Joseph said in an interview at Mercury's modest mid-Wilshire headquarters.
Few would disagree that a motorist with a string of fender-benders and a glove box full of speeding tickets should pay higher rates. But according to Joseph, such drivers increasingly avoid being red-flagged by their insurers by going to traffic school and by paying for small mishaps out of their own pockets.
"Driving records have gotten progressively -- please don't use that word, it reminds me of a competitor -- less predictive," he said.
Nor, based on Mercury's experience, is annual mileage significant enough to warrant the No. 2 weighting, he added.
Though he recently dropped his initiative proposal amid industry dissent and threats of a consumer countermeasure nicknamed Son of Proposition 103, analysts say Californians surely have not heard the last from Joseph, who remains committed to correcting what he sees as regulatory excess.
"I've been in the L.A. area since 1948, and it's hard to think of a single example of a California business figure who is the equivalent of George Joseph," said Charles T. Munger, vice chairman of Berkshire Hathaway Inc., the company led by Warren Buffett that owns rival insurer Geico.
"He was nothing when he started," Munger said, "but his combination of genius, diligence, trustworthiness and longevity has created amazing results."
Born in Beckley, W.Va., to a working-class Lebanese immigrant family, Joseph remembers being drawn to the stability, as well as the profit potential, of the insurance business.
"You could put in as many days as you wanted and as many hours as you wanted," said Joseph, who became an independent agent in the 1950s, operating out of an $80-a-month duplex near Olympic Boulevard and La Brea Avenue. "When you grow up in the Depression, one of the things you always want is a lot of work."
He launched Mercury, named for the Roman god of speed and commerce, with five employees and 200 independent agents, slowly building an industry force whose revenue last year reached $3 billion.
