Mercury General Corp

Latest Results (18.05.2026):

Mercury General Corporation fourth quarter 2025 results: Mercury reported strong fourth-quarter and full-year 2025 earnings, driven by higher premiums, improved investment yields and reserve development, despite significant catastrophe activity early in the year. For the three months ended December 31, 2025 (Q4 2025) net income was $202.5 million ($3.66 diluted EPS), operating income was $202.5 million ($3.66 per diluted share), net premiums earned were $1.445 billion and the Q4 combined ratio improved to 88.6% (from 91.4% in Q4 2024). Full-year 2025 net income was $541.1 million ($9.77 diluted EPS) with a 96.3% combined ratio for the year.

Earnings and EPS

Q4 2025 net income was $202.5M, up 100% vs Q4 2024; diluted EPS $3.66 (vs $1.82). Full-year 2025 net income was $541.1M, up 15.6% year-over-year; diluted EPS $9.77.

Premiums and Production

Net premiums earned in Q4 2025 were $1.445B (+6.9% YoY); net premiums written were $1.428B (+8.6% YoY). Direct premiums written for the quarter were $1.490B (+10.7% YoY). Full-year net premiums earned were $5.506B (+8.5%).

Underwriting Performance

Q4 combined ratio improved to 88.6% (loss ratio 63.6%, expense ratio 24.9%), a 2.8-point improvement vs Q4 2024. Full-year combined ratio was 96.3% (vs 96.0% in 2024); accident-period combined ratio was 98.0% indicating favorable prior-year reserve development helped reported results.

Catastrophes and Wildfires

2025 catastrophe losses (net of reinsurance) were materially elevated for the year—$508M—driven primarily by the Palisades and Eaton wildfires and other storms. The Company recorded approximately $380.4M net for the Palisades and Eaton fires after reinsurance, subrogation and FAIR Plan impacts; reinsurance recoveries billed and collected totaled about $1.294B. The reinsurance program was exhausted for the treaty year, triggering $101M of reinstatement premiums (recorded as reductions to net premiums earned/written).

Investment Results

Q4 net investment income before tax was $84.5M ($71.6M after tax); average annual yield after tax rose to 3.9% (from 3.7% in Q4 2024). Net realized investment gains (net of tax) were modestly positive in Q4 2025 ($0.1M before tax, $92K net of tax); full-year realized gains were $131.4M before tax.

Balance Sheet and Capital

Total assets were $9.561B at December 31, 2025; shareholders' equity increased to $2.417B (book value per share $43.64 vs $35.14 at year-end 2024). Statutory surplus rose to $2.39B and debt-to-total-capital improved to 19.2%.

Corporate Actions and Regulatory

Board declared a quarterly dividend of $0.3175 per share payable March 26, 2026. California DOI approved a 6.9% rate increase for the Company's California homeowners line in December 2025 (effective July 2026); California homeowners represented ~15% of 2025 net premiums earned.