Mercury General Corporation reported a net loss of $(108.3) million, or $(1.96) per diluted share, for the first quarter ended March 31, 2025, a significant decline from net income of $73.5 million, or $1.33 per diluted share, in Q1 2024. The operating loss was $(126.8) million, or $(2.29) per diluted share.
Net premiums earned increased 10.0% to $1,283.1 million, while the combined ratio deteriorated to 119.2% from 100.9% in the prior-year quarter. This was primarily driven by catastrophe losses net of reinsurance, which surged 520.8% to $447.0 million, predominantly from the January 2025 Southern California wildfires.
The company recorded net catastrophe losses and loss adjustment expenses of approximately $414 million from the January 2025 wildfires. Gross catastrophe losses were estimated at $2,150 million, offset by $525 million in estimated subrogation recovery for the Eaton fire and $1,294 million ceded to reinsurers.
Mercury exhausted its full $1,290 million catastrophe reinsurance limits for the wildfires, treating the Palisades and Eaton fires as one event for reinsurance purposes. This triggered a $101 million reinstatement premium, with $50 million earned in Q1 2025 and the remaining $50 million to be earned in Q2 2025.
The company's share of California FAIR Plan losses from the wildfires was approximately $108 million, partially offset by a $25 million recoupable assessment. To provide ample liquidity for claims, Mercury sold approximately $600 million of low-yielding investments in January 2025.
The Board of Directors declared a quarterly dividend of $0.3175 per share, payable on June 26, 2025, to shareholders of record on June 12, 2024.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.