LOS ANGELES, Nov. 3, 2026 /PRNewswire/ -- Mercury General Corporation (NYSE: MCY) reported today for the third quarter of 2026:
Consolidated Highlights | |||||||||||||||
Three Months Ended | Change | Nine Months Ended | Change | ||||||||||||
2026 | 2025 | $ | % | 2026 | 2025 | $ | % | ||||||||
(000's except per-share amounts and ratios) | |||||||||||||||
Net premiums earned (2) | $ 1,545,368 | $ 1,410,400 | $ 134,968 | 9.6 | $ 4,495,548 | $ 4,060,208 | $ 435,340 | 10.7 | |||||||
Net premiums written (1) (2) | $ 1,636,133 | $ 1,498,861 | $ 137,272 | 9.2 | $ 4,745,297 | $ 4,294,048 | $ 451,249 | 10.5 | |||||||
Direct premiums written (1) | $ 1,697,598 | $ 1,561,739 | $ 135,859 | 8.7 | $ 4,893,922 | $ 4,492,167 | $ 401,755 | 8.9 | |||||||
Net realized investment (losses) gains, net of tax (3) | $ (206,938) | $ 66,716 | $(273,654) | (410.2) | $ (142,182) | $ 103,688 | $ (245,870) | (237.1) | |||||||
Net (loss) income | $ (13,685) | $ 280,403 | $(294,088) | (104.9) | $ 440,237 | $ 338,547 | $ 101,690 | 30.0 | |||||||
Net (loss) income per diluted share | $ (0.25) | $ 5.06 | $ (5.31) | (104.9) | $ 7.95 | $ 6.11 | $ 1.84 | 30.1 | |||||||
Operating income (1) | $ 193,253 | $ 213,687 | $ (20,434) | (9.6) | $ 582,419 | $ 234,859 | $ 347,560 | 148.0 | |||||||
Operating income per diluted share (1) | $ 3.49 | $ 3.86 | $ (0.37) | (9.6) | $ 10.52 | $ 4.24 | $ 6.28 | 148.1 | |||||||
Catastrophe losses net of reinsurance (4) | $ 23,000 | $ 29,000 | $ (6,000) | (20.7) | $ 191,000 | $ 489,000 | $ (298,000) | (60.9) | |||||||
Combined ratio (5) | 90.2 % | 87.0 % | — | 3.2 pts | 89.8 % | 99.0 % | — | (9.2) pts | |||||||
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(1) | These measures are not based on U.S. generally accepted accounting principles ("GAAP"), are defined in "Information Regarding GAAP and Non-GAAP Measures" and are reconciled to the most directly comparable GAAP measures in "Supplemental Schedules." |
(2) | Both net premiums earned and net premiums written for the nine months ended September 30, 2025 include $101 million of increased ceded premiums due to the reinstatement premiums paid and recorded in the first half of 2025 to reinstate the fully exhausted reinsurance coverage layers of its catastrophe reinsurance treaty ended June 30, 2025 following the Palisades and Eaton wildfires in January 2025. |
(3) | Net realized investment (losses) gains before tax was $(262) million and $84 million for the three months ended September 30, 2026 and 2025, respectively, and $(180) million and $131 million for the nine months ended September 30, 2026 and 2025, respectively. Net realized investment losses for the three and nine months ended September 30, 2026 resulted largely from the decreases in fair value of the Company's investments during the third quarter of 2026 primarily caused by large increases in overall market interest rates. The changes in fair value of the Company's investments are recorded as part of net realized investment gains or losses in its consolidated statements of operations due to the adoption of the fair value option under GAAP. |
(4) | The majority of 2026 catastrophe losses resulted from storms in Oklahoma and Texas and adverse reserve development on the Palisades and Eaton wildfires. The majority of 2025 catastrophe losses resulted from the Palisades and Eaton wildfires in California and storms in Texas and Oklahoma. |
(5) | The Company experienced favorable development of approximately $58 million and $27 million on prior accident years' loss and loss adjustment expense reserves for the three months ended September 30, 2026 and 2025, respectively, and favorable development of approximately $102 million and $74 million on prior accident years' loss and loss adjustment expense reserves for the nine months ended September 30, 2026 and 2025, respectively. The year-to-date favorable development in 2026 was primarily attributable to lower than estimated losses and loss adjustment expenses in the automobile line of insurance business, partially offset by adverse development on the homeowners line of insurance business primarily related to the Palisades and Eaton wildfires. The year-to-date favorable development in 2025 was primarily attributable to lower than estimated losses and loss adjustment expenses in the automobile and homeowners lines of insurance business. |
Investment Results | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
(000's except average annual yield) | |||||||
Average invested assets at cost (1) | $ 7,227,738 | $ 6,135,816 | $ 6,924,365 | $ 5,840,849 | |||
Net investment income (2) (3) | |||||||
Before income taxes | $ 93,339 | $ 83,970 | $ 268,738 | $ 244,208 | |||
After income taxes | $ 79,987 | $ 70,745 | $ 229,469 | $ 204,616 | |||
Average annual yield on investments (2) (3) | |||||||
Before income taxes | 4.5 % | 4.6 % | 4.5 % | 4.7 % | |||
After income taxes | 3.9 % | 4.0 % | 3.9 % | 4.0 % | |||
(1) | Fixed maturities and short-term bonds at amortized cost; equities and other short-term investments at cost. Average invested assets at cost are based on the monthly amortized cost of the invested assets excluding cash for each period. |
(2) | Net investment income includes interest income earned on cash of approximately $12.0 million and $12.9 million ($9.5 million and $10.2 million after tax) for the three months ended September 30, 2026 and 2025, respectively, and approximately $35.1 million and $38.4 million ($27.7 million and $30.4 million after tax) for the nine months ended September 30, 2026 and 2025, respectively. Average annual yield on investments does not include interest income earned on cash. |
(3) | Higher net investment income before and after income taxes for the three and nine months ended September 30, 2026 compared to the corresponding periods in 2025 resulted largely from higher average invested assets, partially offset by decreases in average annual yield on investments and interest income earned on cash before and after taxes. Average annual yield on investments before income taxes for the three months ended September 30, 2026 decreased from the corresponding period in 2025, primarily due to an increase in tax-exempt investments with lower pre-tax yields combined with lower yields on floating rate investments resulting from lower short-term market interest rates, partially offset by higher yields on long-term investments. Average annual yield on investments after income taxes for the three months ended September 30, 2026 decreased from the corresponding period in 2025, primarily due to lower yields on floating rate investments resulting from lower short-term market interest rates, partially offset by higher yields on long-term investments. Average annual yield on investments before income taxes for the nine months ended September 30, 2026 decreased from the corresponding period in 2025, primarily due to an increase in tax-exempt investments with lower pre-tax yields combined with lower yields on floating rate investments resulting from lower short-term market interest rates. Average annual yield on investments after income taxes for the nine months ended September 30, 2026 decreased from the corresponding period in 2025, primarily due to lower yields on floating rate investments resulting from lower short-term market interest rates. |
The Board of Directors declared a quarterly dividend of $0.3175 per share. The dividend will be paid on December 31, 2026 to shareholders of record on December 17, 2026.
Mercury General Corporation and its subsidiaries are a multiple line insurance organization offering predominantly personal automobile and homeowners insurance through a network of independent producers and direct-to-consumer sales in many states. For more information, visit the Company's website at www.mercuryinsurance.com.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. Certain statements contained in this report are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: changes in the demand for the Company's insurance products, inflation and general economic conditions, including general market risks associated with the Company's investment portfolio; the accuracy and adequacy of the Company's pricing methodologies; catastrophes in the markets served by the Company; uncertainties related to estimates, assumptions and projections generally; the possibility that actual loss experience may vary adversely from the actuarial estimates made to determine the Company's loss reserves in general, including subrogation recovery estimates; the Company's ability to obtain and the timing of the approval of premium rate changes for insurance policies issued in the states where it operates; legislation adverse to the automobile or homeowners insurance industry or business generally that may be enacted in the states where the Company operates; the Company's success in managing its business in non-California states; the presence of competitors with greater financial resources and the impact of competitive pricing and marketing efforts; the Company's ability to successfully allocate the resources used in the states with reduced or exited operations to its operations in other states; changes in driving patterns and loss trends; acts of war and terrorist activities; effects of changing climate conditions; pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases; court decisions and trends in litigation and health care and auto repair costs; changes in global trade policies, including trade barriers or restrictions; and legal, cybersecurity, regulatory and litigation risks. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see the Company's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 17, 2026.
MERCURY GENERAL CORPORATION AND SUBSIDIARIES | |||||||
SUMMARY OF OPERATING RESULTS | |||||||
(000's except per-share amounts and ratios) | |||||||
(unaudited) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2026 | 2025 | 2026 | 2025 | ||||
Revenues: | |||||||
Net premiums earned | $ 1,545,368 | $ 1,410,400 | $ 4,495,548 | $ 4,060,208 | |||
Net investment income | 93,339 | 83,970 | 268,738 | 244,208 | |||
Net realized investment (losses) gains | (261,947) | 84,451 | (179,977) | 131,251 | |||
Other | 4,591 | 6,105 | 18,617 | 21,022 | |||
Total revenues | 1,381,351 | 1,584,926 | 4,602,926 | 4,456,689 | |||
Expenses: | |||||||
Losses and loss adjustment expenses | 1,016,582 | 882,745 | 2,922,813 | 3,043,596 | |||
Policy acquisition costs | 259,312 | 236,164 | 750,142 | 692,765 | |||
Other operating expenses | 118,165 | 108,518 | 364,970 | 283,996 | |||
Interest | 10,168 | 7,181 | 24,893 | 21,562 | |||
Total expenses | 1,404,227 | 1,234,608 | 4,062,818 | 4,041,919 | |||
(Loss) income before income taxes | (22,876) | 350,318 | 540,108 | 414,770 | |||
Income tax (benefit) expense | (9,191) | 69,915 | 99,871 | 76,223 | |||
Net (loss) income | $ (13,685) | $ 280,403 | $ 440,237 | $ 338,547 | |||
Basic average shares outstanding | 55,389 | 55,389 | 55,389 | 55,389 | |||
Diluted average shares outstanding | 55,389 | 55,389 | 55,389 | 55,389 | |||
Basic Per Share Data | |||||||
Net (loss) income | $ (0.25) | $ 5.06 | $ 7.95 | $ 6.11 | |||
Net realized investment (losses) gains, net of tax | $ (3.74) | $ 1.20 | $ (2.57) | $ 1.87 | |||
Diluted Per Share Data | |||||||
