Mercury General Corporation Announces Third Quarter Results and Declares Quarterly Dividend

Shareholders’ equity increased to $2,804.754 million from $2,417.275 million at year-end, while the debt-to-capital ratio declined.

Rhea-AI Summary

Mercury General (NYSE: MCY) reported a third-quarter 2026 net loss of $13.685 million and declared its quarterly dividend. The loss was $0.25 per diluted share, versus earnings of $5.06 a year earlier. After-tax investment losses were $206.938 million, compared with gains of $66.716 million. Net premiums earned rose 9.6% to $1,545.368 million, while non-GAAP operating income fell 9.6% to $193.253 million. The combined ratio, measuring claims and underwriting expenses against premiums, worsened to 90.2% from 87.0%.

For the first nine months, net income rose 30.0% to $440.237 million, and the combined ratio improved to 89.8% from 99.0%. Catastrophe losses net of reinsurance fell to $191 million from $489 million. Book value per share reached $50.64, versus $43.64 at year-end. The $0.3175-per-share dividend is payable December 31, 2026, to shareholders of record December 17.

17 points · 0 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 13 points

How the balance works

Positive

• Moderate pointNine-month net income rose 30.0% to $440.237 million; diluted earnings increased to $7.95 from $6.11.
• Moderate pointNet premiums earned increased 9.6% in Q3 and 10.7% over nine months, to $1,545.368 million and $4,495.548 million.
• Moderate pointNet premiums written rose 9.2% in Q3 and 10.5% over nine months, to $1,636.133 million and $4,745.297 million.
• Moderate pointNine-month non-GAAP operating income increased 148.0% to $582.419 million; diluted operating earnings reached $10.52 from $4.24.
• Moderate pointNine-month combined ratio improved to 89.8% from 99.0%, with the loss ratio falling to 65.0% from 75.0%.
• Moderate pointCatastrophe losses net of reinsurance fell to $23 million from $29 million in Q3; nine-month losses fell to $191 million from $489 million.
• Moderate pointPretax investment income increased to $93.339 million from $83.970 million in Q3; nine-month income reached $268.738 million from $244.208 million.
• Moderate pointBook value per share rose to $50.64 from $43.64 at December 31, 2025.
• Moderate pointTotal policies in force increased to 2.414 million from 2.265 million at December 31, 2025.

8 minor points

• Minor pointDirect premiums written rose 8.7% in Q3 and 8.9% over nine months, to $1,697.598 million and $4,893.922 million.
• Minor pointFavorable prior-year reserve development reached approximately $58 million in Q3 versus $27 million; nine-month development reached approximately $102 million versus $74 million.
• Minor pointAverage invested assets at cost rose to $7,227.738 million in Q3 from $6,135.816 million a year earlier.
• Minor pointNine-month claims and loss-adjustment expenses declined to $2,922.813 million from $3,043.596 million.
• Minor pointShareholders’ equity increased to $2,804.754 million from $2,417.275 million at December 31, 2025.
• Minor pointStatutory surplus increased to $2.88 billion from $2.39 billion; net premiums written-to-surplus ratio declined to 2.14 from 2.39.
• Minor pointNotes payable declined to $569.005 million from $574.527 million at December 31, 2025.
• Minor pointDebt-to-total-capital ratio fell to 17.0% from 19.2% at December 31, 2025.

Negative

• Moderate pointQ3 net loss reached $13.685 million, or $0.25 per diluted share, versus earnings of $280.403 million, or $5.06.
• Moderate pointAfter-tax investment losses totaled $206.938 million in Q3 and $142.182 million over nine months, versus year-earlier gains.
• Moderate pointQ3 total revenue declined to $1,381.351 million from $1,584.926 million.
• Moderate pointQ3 non-GAAP operating income fell 9.6% to $193.253 million; diluted operating earnings fell to $3.49 from $3.86.
• Moderate pointQ3 combined ratio worsened to 90.2% from 87.0%, with the loss ratio rising to 65.8% from 62.6%.
• Moderate pointOther operating expenses rose to $118.165 million from $108.518 million in Q3; nine-month expenses reached $364.970 million from $283.996 million.

7 minor points

• Minor pointQ3 claims and loss-adjustment expenses increased to $1,016.582 million from $882.745 million.
• Minor pointPolicy acquisition costs rose to $259.312 million from $236.164 million in Q3; nine-month costs reached $750.142 million from $692.765 million.
• Minor pointInterest expense increased to $10.168 million from $7.181 million in Q3; nine-month expense reached $24.893 million from $21.562 million.
• Minor pointNine-month expense ratio increased to 24.8% from 24.1%.
• Minor pointPretax annual investment yield declined to 4.5% from 4.6% for Q3 and 4.7% for nine months.
• Minor pointAfter-tax annual investment yield declined to 3.9% from 4.0% for both Q3 and nine months.
• Minor pointHomeowners reserves experienced adverse development, primarily related to the Palisades and Eaton wildfires.

Key Figures

Net premiums earned: $1,545,368 thousand Net income: $(13,685) thousand Net realized investment losses, net of tax: $(206,938) thousand +5 more

Net premiums earned

$1,545,368 thousand

Q3 2026; $1,410,400 thousand in Q3 2025 (+9.6%)

Net income

$(13,685) thousand

Q3 2026; net income of $280,403 thousand in Q3 2025

Net realized investment losses, net of tax

$(206,938) thousand

Q3 2026; compared with gains of $66,716 thousand in Q3 2025

Operating income

$193,253 thousand

Q3 2026; down 9.6% from Q3 2025

Combined ratio

90.2%

Q3 2026; 87.0% in Q3 2025, a 3.2-point increase

Catastrophe losses net of reinsurance

$23,000 thousand

Q3 2026; $29,000 thousand in Q3 2025

Quarterly dividend

$0.3175 per share

Declared for the quarter

Dividend dates

Record: Dec. 17, 2026; payment: Dec. 31, 2026

Quarterly dividend

Previous Dividends,earnings Reports

2 past events · Latest: Aug 04

Same Type 2 events

1. Aug 04

   earnings report

   24h Move

   +2.8%

   Declared a $0.3175 quarterly dividend alongside second-quarter results.

2. May 05

   earnings report

   24h Move

   -1.5%

   Declared a $0.3175 quarterly dividend alongside first-quarter results.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gaap, combined ratio, reinsurance, loss adjustment expense

4 terms

gaap financial

"These measures are not based on U.S. generally accepted accounting principles ("GAAP")"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

View in glossary

combined ratio financial

"Combined ratio (5) | 90.2 %"

The combined ratio is a way insurance companies measure how well they are doing by adding up all their costs and claims and comparing them to the money they earn from premiums. If the ratio is below 100%, it means the company is making a profit; if it's above 100%, they are losing money. It helps see if an insurance company is financially healthy or not.

reinsurance financial

"Catastrophe losses net of reinsurance (4)"

Reinsurance is when insurance companies buy insurance for themselves to protect against very big losses. It’s like a car owner getting extra coverage from another company so that if there's a serious accident, the financial hit isn’t all on one company. This helps insurance companies stay stable and able to pay out when disasters happen.

loss adjustment expense technical

"prior accident years' loss and loss adjustment expense reserves"

Loss adjustment expense is the cost an insurer incurs to investigate, manage and settle insurance claims, including fees for claims staff, outside adjusters, legal defense and claim processing. For investors it matters because these expenses reduce an insurer’s profits and cash flow and can signal how well the company controls claim costs and sets reserves — similar to a store whose repair and customer-service bills eat into its margins.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

LOS ANGELES, Nov. 3, 2026 /PRNewswire/ -- Mercury General Corporation (NYSE: MCY) reported today for the third quarter of 2026:

Consolidated Highlights
	Three Months Ended September 30,				Change				Nine Months Ended September 30,				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

(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
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
Operating Ratios-GAAP Basis
Loss ratio	65.8 %		62.6 %		65.0 %		75.0 %
Expense ratio	24.4 %		24.4 %		24.8 %		24.1 %
Combined ratio (a)	90.2 %		87.0 %		89.8 %		99.0 %

(a)	Combined ratio for the nine months ended September 30, 2025 does not sum due to rounding.

 

MERCURY GENERAL CORPORATION AND SUBSIDIARIES
CONDENSED BALANCE SHEETS AND OTHER INFORMATION
(000's except per-share amounts and ratios)
	September 30, 2026		December 31, 2025
	(unaudited)
ASSETS
Investments, at fair value:
Fixed maturity securities (amortized cost $6,268,600; $5,449,726)	$        6,013,700		$        5,430,251
Equity securities (cost $897,915; $728,460)	989,325		812,787
Short-term investments (cost $226,648; $336,978)	226,672		336,992
Total investments	7,229,697		6,580,030
Cash	1,305,215		1,315,574
Receivables:
Premiums	856,234		751,554
Allowance for credit losses on premiums receivable	(5,400)		(6,000)
Premiums receivable, net of allowance for credit losses	850,834		745,554
Accrued investment income	81,382		73,004
Other	80,496		86,508
Total receivables	1,012,712		905,066
Reinsurance recoverables (net of allowance for credit losses $3; $39)	45,392		109,672
Deferred policy acquisition costs	391,878		359,724
Fixed assets, net	148,538		146,880
Operating lease right-of-use assets	18,472		12,125
Deferred income taxes	87,604		30,637
Goodwill	42,796		42,796
Other intangible assets, net	6,185		6,827
Other assets	60,562		51,338
Total assets	$       10,349,051		$        9,560,669
LIABILITIES AND SHAREHOLDERS' EQUITY
Loss and loss adjustment expense reserves	$        3,754,561		$        3,633,338
Unearned premiums	2,505,959		2,255,935
Notes payable	569,005		574,527
Accounts payable and accrued expenses	474,649		448,703
Operating lease liabilities	17,953		12,328
Current income taxes	344		30,770
Other liabilities	221,826		187,793
Shareholders' equity	2,804,754		2,417,275
Total liabilities and shareholders' equity	$       10,349,051		$        9,560,669
OTHER INFORMATION
Common stock shares outstanding	55,389		55,389
Book value per share	$             50.64		$             43.64
Statutory surplus (a)	$2.88 billion		$2.39 billion
Net premiums written to surplus ratio (a)	2.14		2.39
Debt to total capital ratio (b)	17.0 %		19.2 %
Portfolio duration (including all short-term instruments) (a) (c)	6.2 years		4.4 years
Policies-in-force (company-wide "PIF") (a)
Personal Auto PIF	1,085		1,044
Homeowners PIF	968		883
Commercial Auto PIF	35		34
All Other PIF (d)	326		304
Total PIF	2,414		2,265

(a)	Unaudited.
(b)	Debt to Debt plus Shareholders' Equity (Debt at face value).
(c)	Modified duration reflecting anticipated early calls.
(d)	All Other PIF represents the combined PIF of all the other smaller lines of insurance business, which in aggregate accounted for only 6.3% of the total company-wide direct premiums written for the nine months ended September 30, 2026.

 

SUPPLEMENTAL SCHEDULES
(000's except per-share amounts and ratios) (unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Reconciliations of Comparable GAAP Measures to Operating Measures (a)
Net premiums earned	$    1,545,368		$    1,410,400		$  4,495,548		$  4,060,208
Change in net unearned premiums	90,765		88,461		249,749		233,840
Net premiums written	$    1,636,133		$    1,498,861		$  4,745,297		$  4,294,048
Assumed premiums written	(494)		(589)		(38,482)		(26,084)
Ceded premiums written	61,959		63,467		187,107		224,203
Direct premiums written	$    1,697,598		$    1,561,739		$  4,893,922		$  4,492,167
Incurred losses and loss adjustment expenses	$    1,016,582		$      882,745		$  2,922,813		$  3,043,596
Change in net loss and loss adjustment expense reserves	(75,092)		(57,401)		(116,744)		(383,836)
Paid losses and loss adjustment expenses	$      941,490		$      825,344		$  2,806,069		$  2,659,760
Net (loss) income	$      (13,685)		$      280,403		$    440,237		$    338,547
Less: Net realized investment (losses) gains	(261,947)		84,451		(179,977)		131,251
Tax on net realized investment (losses) gains (b)	(55,009)		17,735		(37,795)		27,563
Net realized investment (losses) gains, net of tax	(206,938)		66,716		(142,182)		103,688
Operating income	$      193,253		$      213,687		$    582,419		$    234,859
Per diluted share:
Net (loss) income	$         (0.25)		$          5.06		$        7.95		$        6.11
Less: Net realized investment (losses) gains, net of tax	(3.74)		1.20		(2.57)		1.87
Operating income	$          3.49		$          3.86		$       10.52		$        4.24
Combined ratio					89.8 %		99.0 %
Effect of estimated prior periods' loss development					2.3 %		1.8 %
Combined ratio-accident period basis					92.1 %		100.8 %

(a)	See "Information Regarding GAAP and Non-GAAP Measures."
(b)	Based on federal statutory rate of 21%.

Information Regarding GAAP and Non-GAAP Measures

The Company has presented information within this document containing operating measures which in management's opinion provide investors with useful, industry specific information to help them evaluate, and perform meaningful comparisons of, the Company's performance, but that may not be presented in accordance with GAAP. These measures are not intended to replace, and should be read in conjunction with, the GAAP financial results.

Net income (loss) is the GAAP measure that is most directly comparable to operating income (loss). Operating income (loss) is net income (loss) excluding realized investment gains and losses, net of tax. Operating income (loss) is used by management along with the other components of net income (loss) to assess the Company's performance. Management uses operating income (loss) as an important measure to evaluate the results of the Company's insurance business. Management believes that operating income (loss) provides investors with a valuable measure of the Company's ongoing performance as it reveals trends in the Company's insurance business that may be obscured by the effect of net realized investment gains and losses. Realized investment gains and losses may vary significantly between periods and are generally driven by external economic developments such as capital market conditions. Accordingly, operating income (loss) highlights the results from ongoing operations and the underlying profitability of the Company's core insurance business. Operating income (loss), which is provided as supplemental information and should not be considered as a substitute for net income (loss), does not reflect the overall profitability of the Company's business. It should be read in conjunction with the GAAP financial results. See "Supplemental Schedules" above for a reconciliation of net income (loss) to operating income (loss).

Net premiums earned, the most directly comparable GAAP measure to net premiums written and direct premiums written, represents the portion of premiums written that is recognized as revenue in the financial statements for the periods presented and earned on a pro-rata basis over the term of the policies. Net premiums written is a statutory financial measure which represents the premiums charged on policies issued during a fiscal period net of any applicable reinsurance; direct premiums written is such a measure before any applicable reinsurance. Net premiums written and direct premiums written are designed to determine production levels and are meant as supplemental information and not intended to replace net premiums earned. Such information should be read in conjunction with the GAAP financial results. See "Supplemental Schedules" above for a reconciliation of net premiums earned to net premiums written and direct premiums written.

Incurred losses and loss adjustment expenses is the most directly comparable GAAP measure to paid losses and loss adjustment expenses. Paid losses and loss adjustment expenses excludes the effects of changes in the loss reserve accounts. Paid losses and loss adjustment expenses is provided as supplemental information and is not intended to replace incurred losses and loss adjustment expenses. It should be read in conjunction with the GAAP financial results. See "Supplemental Schedules" above for a reconciliation of incurred losses and loss adjustment expenses to paid losses and loss adjustment expenses.

Combined ratio is the most directly comparable measure to combined ratio-accident period basis. Combined ratio-accident period basis is computed as the difference between two GAAP operating ratios: the combined ratio and prior accident periods' loss development ratio. Management believes that combined ratio-accident period basis is useful to investors and it is used to reveal the trends in the Company's results of operations that may be obscured by development on prior accident periods' loss reserves. Combined ratio-accident period basis is meant as supplemental information and is not intended to replace the GAAP combined ratio. It should be read in conjunction with the GAAP financial results. See "Supplemental Schedules" above for a reconciliation of GAAP combined ratio to combined ratio-accident period basis. 

View original content to download multimedia:https://www.prnewswire.com/news-releases/mercury-general-corporation-announces-third-quarter-results-and-declares-quarterly-dividend-302928169.html

SOURCE Mercury General Corporation

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Mercury General’s third-quarter 2026 earnings?

Mercury General reported a $13.685 million net loss, or $0.25 per diluted share, compared with net income of $280.403 million, or $5.06 per diluted share, a year earlier. Non-GAAP operating income was $193.253 million, down 9.6%.

When will Mercury General pay its quarterly dividend?

The $0.3175-per-share quarterly dividend will be paid on December 31, 2026, to shareholders of record on December 17, 2026.

What caused Mercury General’s third-quarter 2026 investment losses?

Mercury General attributed the investment losses largely to declines in investment fair values primarily caused by large increases in overall market interest rates during the third quarter. Under its GAAP fair-value accounting option, changes in investment fair values are recorded within net realized investment gains or losses.

How did wildfire reinsurance premiums affect Mercury General’s 2025 comparison?

The first nine months of 2025 included $101 million of increased ceded premiums in both net premiums earned and net premiums written. These reinstatement premiums restored fully exhausted coverage layers under the catastrophe reinsurance treaty that ended June 30, 2025, following the January 2025 Palisades and Eaton wildfires.