[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Q2 2025 saw strong net income growth driven by reduced catastrophe losses and increased investment income, with a quarterly dividend declared [Second Quarter 2025 Performance Summary](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Summary) Q2 2025 net income surged 166.1% to $166.5 million, driven by reduced catastrophe losses and an improved 92.5% combined ratio Consolidated Highlights for Q2 and Six Months Ended June 30, 2025 | Metric | Q2 2025 | Q2 2024 | Change (%) | Six Months 2025 | Six Months 2024 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Premiums Earned | $1,366.7M | $1,236.0M | 10.6% | $2,649.8M | $2,402.7M | 10.3% | | Net Premiums Written | $1,480.8M | $1,355.5M | 9.2% | $2,795.2M | $2,640.4M | 5.9% | | Net Income | $166.5M | $62.6M | 166.1% | $58.1M | $136.0M | (57.3)% | | Net Income per Diluted Share | $3.01 | $1.13 | 166.4% | $1.05 | $2.46 | (57.3)% | | Operating Income | $147.9M | $60.3M | 145.4% | $21.2M | $103.6M | (79.6)% | | Catastrophe Losses (net) | $13.0M | $125.0M | (89.6)% | $460.0M | $197.0M | 133.5% | | Combined Ratio | 92.5% | 98.9% | (6.4) pts | 105.4% | 99.9% | 5.5 pts | [Investment Results and Dividend](index=2&type=section&id=Investment%20Results%20and%20Dividend) Net investment income increased for Q2 and H1 2025 due to higher yields and invested assets, partly from asset sales, with a $0.3175 per share dividend declared Investment Results for Periods Ended June 30 | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Average Invested Assets at Cost | $5,703.6M | $5,536.2M | $5,686.6M | $5,450.8M | | Net Investment Income (Pre-tax) | $78.8M | $69.0M | $160.2M | $134.0M | | Average Annual Yield (Pre-tax) | 4.7% | 4.5% | 4.7% | 4.5% | - The Board of Directors declared a quarterly dividend of **$0.3175 per share**, payable on September 25, 2025, to shareholders of record on September 11, 2025[6](index=6&type=chunk) - Higher net investment income was attributed to a combination of higher average yield and increased average invested assets and cash. The yield improved partly due to the sale of approximately **$600 million** in low-yielding investments in January 2025 to ensure liquidity for wildfire claims[9](index=9&type=chunk) [Impact of Catastrophe Events](index=2&type=section&id=Impact%20of%20Catastrophe%20Events) H1 2025 net catastrophe losses from wildfires were substantial, mitigated by reinsurance and subrogation efforts, fully exhausting the reinsurance program [Palisades and Eaton Wildfires Impact](index=2&type=section&id=Palisades%20and%20Eaton%20Wildfires%20Impact) H1 2025 net catastrophe losses from wildfires totaled $359 million, mitigated by reinsurance recoveries and subrogation efforts, including a sale of Palisades subrogation rights - For the six months ended June 30, 2025, the company recorded net catastrophe losses and loss adjustment expenses from the Palisades and Eaton wildfires of approximately **$359 million**[7](index=7&type=chunk) Breakdown of Net Losses from Wildfires (Six Months Ended June 30, 2025) | Component | Amount ($K) | | :--- | :--- | | Gross losses and LAE | $2,153,000K | | Subrogation recoverable - Eaton fire | ($528,000K) | | Subrogation recovered - Palisades fire | ($46,500K) | | Reinsurance recovered and recoverable | ($1,293,500K) | | **Net losses before Fair Plan** | **$285,000K** | | Net Fair Plan losses and LAE | $74,000K | | **Total Net Losses and LAE** | **$359,000K** | - The company is pursuing subrogation against Southern California Edison (SCE) for the Eaton fire, recording an estimated recovery of **$528 million**, representing about **55%** of its estimated ultimate losses from that fire[12](index=12&type=chunk) - In June 2025, the company sold its subrogation rights on the Palisades fire to a third party for a guaranteed amount of approximately **$47 million**, plus a potential share of future recoveries[12](index=12&type=chunk) [Reinsurance Program Details](index=3&type=section&id=Reinsurance%20Program%20Details) The $1.29 billion catastrophe reinsurance program was fully exhausted by wildfires, requiring a $101 million reinstatement premium payment, significantly increasing H1 2025 ceded premiums - The catastrophe reinsurance program for the treaty year ending June 30, 2025, provided approximately **$1.29 billion** of limits, which was fully exhausted by the wildfires. This necessitated a reinstatement premium payment of approximately **$101 million**[12](index=12&type=chunk) - As of June 30, 2025, the company had paid out approximately **$1.32 billion** for wildfire-related losses. It has billed reinsurers **$933 million** and collected **100%** of that amount as of July 15, 2025[13](index=13&type=chunk) Impact of Reinsurance Utilization on Ceded Premiums (Six Months Ended 6/30/2025) | Metric | Recorded Amount (Full Limit Used) ($M) | Pro-forma Amount ($0 Limit Used) ($M) | Difference ($M) | | :--- | :--- | :--- | :--- | | Total Ceded Premiums Written | $153.0M | $52.0M | $101.0M | | Total Ceded Premiums Earned | $153.0M | $52.0M | $101.0M | [Financial Statements](index=6&type=section&id=Financial%20Statements) Q2 2025 showed revenue and net income growth, while H1 results reflected increased losses and a deteriorated combined ratio, impacting balance sheet reserves [Summary of Operating Results (Income Statement)](index=6&type=section&id=Summary%20of%20Operating%20Results%20(Income%20Statement)) Q2 2025 total revenues increased to $1.48 billion with net income rising to $166.5 million, while H1 revenues reached $2.87 billion, but increased losses led to a net income decline and combined ratio deterioration Summary of Operating Results (in thousands) | Metric | Q2 2025 ($K) | Q2 2024 ($K) | Six Months 2025 ($K) | Six Months 2024 ($K) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $1,477,885K | $1,304,994K | $2,871,763K | $2,579,080K | | Losses and LAE | $940,037K | $936,714K | $2,160,850K | $1,840,679K | | Total Expenses | $1,271,137K | $1,229,897K | $2,807,312K | $2,414,763K | | Income Before Taxes | $206,748K | $75,097K | $64,451K | $164,317K | | Net Income | $166,472K | $62,568K | $58,145K | $136,030K | | Combined Ratio | 92.5% | 98.9% | 105.4% | 99.9% | [Condensed Balance Sheets](index=7&type=section&id=Condensed%20Balance%20Sheets) Total assets increased to $9.08 billion by June 30, 2025, driven by cash and reinsurance recoverables, while loss and LAE reserves grew to $3.61 billion due to catastrophes Condensed Balance Sheet Highlights (in thousands) | Account | June 30, 2025 ($K) | Dec 31, 2024 ($K) | | :--- | :--- | :--- | | **Assets** | | | | Total Investments | $5,963,247K | $6,076,370K | | Cash | $1,122,252K | $720,257K | | Reinsurance Recoverables | $390,717K | $28,613K | | **Total Assets** | **$9,083,027K** | **$8,310,632K** | | **Liabilities & Equity** | | | | Loss and LAE Reserves | $3,612,160K | $3,152,031K | | Unearned Premiums | $2,184,846K | $2,039,830K | | Notes Payable | $574,327K | $574,128K | | Shareholders' Equity | $1,969,497K | $1,946,524K | | **Total Liabilities & Equity** | **$9,083,027K** | **$8,310,632K** | [Other Key Metrics](index=7&type=section&id=Other%20Key%20Metrics) Book value per share increased to $35.56, net premiums written to surplus ratio rose to 2.74, portfolio duration extended to 4.3 years, and policies-in-force showed modest growth Other Information as of June 30, 2025 | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Book Value Per Share | $35.56 | $35.14 | | Statutory Surplus | $2.02 billion | $2.03 billion | | Net Premiums Written to Surplus Ratio | 2.74 | 2.65 | | Debt to Total Capital Ratio | 22.6% | 22.8% | | Portfolio Duration | 4.3 years | 3.4 years | | Personal Auto PIF (000s) | 1,030 | 1,019 | | Homeowners PIF (000s) | 859 | 852 | [Supplemental Information](index=8&type=section&id=Supplemental%20Information) This section reconciles GAAP to non-GAAP measures, explaining the rationale for using operating income and net premiums written to assess core business performance [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles GAAP to non-GAAP measures, showing Q2 2025 Net Income of $166.5 million reconciled to Operating Income of $147.9 million Reconciliation of Net Income to Operating Income (in thousands) | Line Item | Q2 2025 ($K) | Q2 2024 ($K) | Six Months 2025 ($K) | Six Months 2024 ($K) | | :--- | :--- | :--- | :--- | :--- | | Net Income (GAAP) | $166,472K | $62,568K | $58,145K | $136,030K | | Less: Net Realized Investment Gains, Net of Tax | $18,549K | $2,290K | $36,973K | $32,461K | | **Operating Income (Non-GAAP)** | **$147,923K** | **$60,278K** | **$21,172K** | **$103,569K** | [Explanation of Non-GAAP Measures](index=9&type=section&id=Explanation%20of%20Non-GAAP%20Measures) Non-GAAP measures provide industry-specific performance insights, with operating income assessing core insurance by excluding volatile investment gains, and net premiums written indicating production levels - Operating income is presented because management believes it provides a valuable measure of ongoing performance by revealing trends in the core insurance business that may be obscured by net realized investment gains and losses, which are often driven by external market conditions[27](index=27&type=chunk) - Net premiums written is a statutory financial measure used to determine production levels and is considered supplemental information to the GAAP measure of net premiums earned[28](index=28&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Table of Contents FORM 10-Q (Mark One) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File No. 001-12257 ______________________________ MERCURY GENERAL CORPORATION (Exact name of registrant as ...

Core Insights - Mercury Insurance has released its annual list of the most affordable sedans and subcompact crossovers to insure, aimed at helping budget-conscious consumers maximize insurance savings [1][2][3] Vehicle Affordability - The list includes vehicles from various manufacturers, highlighting a diverse range from entry-level premium cars like the Acura Integra to more affordable options such as the Nissan Kicks and Kia K4 [3] - The top 10 vehicles listed for affordability in insurance include: Volkswagen Golf R, Acura Integra, Mazda 3, Kia K4, Nissan Versa, Volvo S90, Hyundai Venue, MINI Cooper, Kia K5, and Nissan Kicks [6] Insurance Cost Factors - Factors influencing insurance costs include claims on similar vehicles, repair costs, and vehicle safety records, which were analyzed by Mercury's research and development team [2][3] Company Background - Mercury Insurance has been providing insurance services since 1962, focusing on personal auto, homeowners, renters, and commercial insurance across multiple states [4][5] - The company has over 4,200 employees and a network of more than 6,340 independent agents, earning an "A" rating from A.M. Best and recognition as a top auto insurance company by Forbes and Insure.com [5]

Group 1 - Commissioner Lara's Sustainable Insurance Strategy aims to enhance the insurance marketplace in California by enabling science-based risk modeling, which will provide homeowners with more insurance options [1][2] - Mercury Insurance is preparing to file for homeowners insurance rates using the California Department of Insurance's approved Verisk Wildfire Model, reflecting the implementation of the Sustainable Insurance Strategy [1] - The strategy has already allowed Mercury Insurance to write new policies in Paradise, CA, a town affected by a wildfire in 2018, showcasing the potential for growth in wildfire-prone areas [2] Group 2 - Mercury Insurance is a multi-line insurance carrier offering personal auto, homeowners, and renters insurance across several states, including California [3] - The company has been recognized for its competitive rates and excellent customer service, employing over 4,200 staff and working with more than 6,340 independent agents [4] - Mercury Insurance has received an "A" rating from A.M. Best and accolades as a "Best Auto Insurance Company" from Forbes and Insure.com [4]

Core Insights - Mercury Insurance emphasizes the importance of vehicle preparedness for college students heading back to school, suggesting that necessary vehicle repairs should be made prior to any major road trip [2][3] Company Overview - Mercury Insurance is a multiple-line insurance carrier offering personal auto, homeowners, renters, and commercial insurance through independent agents across several states, including Arizona, California, and Texas [4] - The company has been providing value since 1962, boasting over 4,200 employees and a network of more than 6,340 independent agents, and has received an "A" rating from A.M. Best [5] Recommendations for Vehicle Preparedness - A full vehicle inspection is recommended, including checks on belts, brakes, shocks, cooling and transmission systems, and oil changes to prevent breakdowns [6] - Checking fluid levels such as engine oil, coolant, and brake fluid is crucial to avoid major engine problems [6] - Tire maintenance, including checking tire pressure and tread wear, is essential for safety, especially in hot weather [6] - Batteries over three years old should be tested and potentially replaced to avoid starting issues [6] - Replacing the air filter is advised to maintain engine performance and fuel efficiency [6] - Addressing minor repairs, such as dents or window damage, is important to prevent them from becoming major issues during long trips [6]

Core Insights - Mercury Insurance is providing guidance to homeowners on how to prepare for hail season to avoid costly repairs, emphasizing the importance of proactive measures [1][2][3] Company Overview - Mercury Insurance, headquartered in Los Angeles, offers multiple lines of insurance including personal auto, homeowners, and renters insurance across various states [4][5] - The company has been operational since 1962 and has built a reputation for competitive rates and excellent customer service, employing over 4,200 staff and working with more than 6,340 independent agents [5][6] Industry Context - Hail causes billions of dollars in property damage annually in the United States, with 2025 projected to be one of the most active hail seasons in recent years [3] - Homeowners are encouraged to review their insurance policies before hail season to understand coverage and deductible options [3] Preparedness Tips - Regularly inspect and reinforce roofs, considering impact-resistant materials in high-risk areas [5] - Secure outdoor items to prevent damage from flying debris during storms [5] - Protect windows and skylights with shutters or hail-resistant films [5] - Maintain trees by trimming weak branches to prevent damage during storms [5] - Park vehicles in garages or under cover to avoid hail damage, which could affect homeowners insurance deductibles [5]

Core Insights - The article addresses common misconceptions about auto insurance that can mislead consumers and affect their decision-making process [1][2]. Group 1: Misconceptions about Auto Insurance - **Myth 1: Color determines the price of auto insurance** The color of a car does not influence insurance costs; factors such as make, model, safety record, and the driver's age and driving record are more significant [2]. - **Myth 2: It costs more to insure your car when you get older** Generally, insurance rates decrease as drivers age and gain experience, with those in their mid-50s typically paying the lowest rates. Discounts may be available for older drivers who complete accident prevention courses [3]. - **Myth 3: Your credit does not affect your insurance rates** A good credit score can lead to lower insurance premiums, as it is often used by insurers to predict the likelihood of filing a claim [4]. - **Myth 4: Your insurance will cover you if your car is stolen or damaged** Comprehensive and collision coverage must be purchased to protect against theft or damage; otherwise, the standard policy may not cover these incidents [5]. - **Myth 5: You only need the minimum amount of auto liability insurance required by law** It is advisable to purchase more than the minimum liability coverage to avoid significant out-of-pocket expenses after an accident; a recommended minimum is $100,000 per person and $300,000 per accident [6]. - **Myth 6: If another person drives your car, their insurance will cover damages** Typically, the car owner's insurance is responsible for damages, not the driver's insurance, which varies by state [7]. - **Myth 7: Personal auto insurance covers business use of your car** Self-employed individuals using their vehicles for business should obtain business vehicle insurance, as personal auto insurance may not provide adequate coverage [9]. Group 2: Company Overview - **Company Background** Mercury Insurance, headquartered in Los Angeles, offers a range of insurance products including personal auto, homeowners, and renters insurance across multiple states [10][11]. - **Market Position** The company has been recognized for its competitive rates and customer service, earning an "A" rating from A.M. Best and accolades from Forbes and Insure.com [11].

Core Points - Mercury General Corporation will release its second quarter 2025 earnings report on July 29, 2025, after market close, along with its quarterly report on Form 10-Q [1] - The company operates as a multiple line insurance organization, primarily offering personal automobile and homeowners insurance through independent producers and direct-to-consumer sales across various states [2] Company Overview - Mercury General Corporation provides predominantly personal automobile and homeowners insurance [2] - The company utilizes a network of independent producers and direct-to-consumer sales to reach customers [2] Forward-Looking Statements - The company’s press release includes forward-looking statements based on current expectations and beliefs regarding future developments [3] - There are significant risks and uncertainties that could cause actual results to differ from those projected, including changes in demand for insurance products, economic conditions, and competitive pressures [3]

Core Insights - The article emphasizes the importance of preparation for homeowners during hurricane season, highlighting that proactive measures can significantly reduce damage and provide peace of mind [1][2][3] Company Overview - Mercury Insurance is a multiple-line insurance carrier headquartered in Los Angeles, offering personal auto, homeowners, and renters insurance directly to consumers and through independent agents [4][5] - The company has been operational since 1962, providing competitive rates and excellent customer service, supported by over 4,200 employees and a network of more than 6,340 independent agents across 11 states [6] Industry Context - The article outlines a checklist for homeowners to prepare for hurricanes, which includes reviewing insurance policies, securing windows and doors, clearing yards, trimming trees, protecting vehicles, preparing emergency plans, stocking emergency kits, elevating important items, documenting belongings, and charging devices [3][4] - The advice provided is based on decades of experience in helping policyholders recover from major storms, reinforcing the notion that early action is crucial for effective disaster preparedness [2][3]

Core Insights - Mercury Insurance has been recognized by Newsweek as one of America's Greatest Workplaces for Parents & Families and in Financial Services, highlighting its commitment to employee well-being and workplace excellence [1][2]. Employee Support and Workplace Culture - The awards are based on a survey of over 250,000 U.S. employees, evaluating companies on criteria such as compensation, benefits, work-life balance, career development, and family support [2]. - 83% of employees report that Mercury supports a healthy work-life balance, and 4 out of 5 employees feel proud to work at the company [9]. - Since January 2022, nearly 97% of team members have utilized the "My Workplace" flexible model to work from home, enhancing work/life balance [9]. Company Commitment and Future Goals - The CEO of Mercury Insurance emphasized the importance of taking care of the team to ensure they perform at their best, reinforcing the company's supportive environment for working parents and career growth [3]. - The Director of Total Rewards stated the company's commitment to building a stronger future for its employees, catering to those starting families or advancing their careers [6]. Recognition and Awards - The Parents & Families list acknowledges companies that provide significant support to working families through flexible scheduling, paid parental leave, and mental health resources [9]. - The Financial Services list recognizes companies that excel in employee engagement, stability, and professional growth opportunities [9]. Company Overview - Mercury Insurance, headquartered in Los Angeles, offers various insurance products including personal auto, homeowners, and renters insurance across multiple states [7][8]. - The company has been operational since 1962, providing competitive rates and excellent customer service through a workforce of nearly 4,100 employees and over 6,500 independent agents [8].