Mercury General(MCY) - 2025 Q3 - Quarterly Results

Financial Performance - Net premiums earned for Q3 2025 were $1,410,400, an increase of 6.8% from $1,320,652 in Q3 2024[3] - Net income for Q3 2025 was $280,403, representing a 21.5% increase from $230,856 in Q3 2024[3] - The total revenues for the nine months ended September 30, 2025, were $4,456.7 million, compared to $4,109.5 million for the same period in 2024, indicating a growth of 8.4%[18] - The Company recorded a net income of $280.4 million for the three months ended September 30, 2025, compared to $230.9 million for the same period in 2024, reflecting a year-over-year increase of 21.5%[18] Losses and Catastrophe Impact - Catastrophe losses net of reinsurance for the nine months ended September 30, 2025, were $489,000, a significant increase of 107.2% from $236,000 in the same period of 2024[3] - The company recorded net catastrophe losses from the Palisades and Eaton wildfires of approximately $381 million for the nine months ended September 30, 2025[9] - As of September 30, 2025, the Company has incurred approximately $1,404 million in losses and loss adjustment expenses related to the Palisades and Eaton wildfires[13] - The Company has received approval from the California DOI to recoup $25 million of the $50 million assessment related to the FAIR Plan, which partially offsets losses of $99 million from the wildfires[16] Ratios and Financial Metrics - The combined ratio improved to 87.0% in Q3 2025, down from 93.6% in Q3 2024, reflecting a decrease of 6.6 percentage points[3] - The loss ratio for the three months ended September 30, 2025, improved to 62.6% from 69.5% in the same period of 2024[18] - The Company reported a combined ratio of 87.0% for the three months ended September 30, 2025, down from 93.6% in the same period of 2024[18] - The net premiums written to surplus ratio improved to 2.51 as of September 30, 2025, compared to 2.65 at the end of 2024[21] Investment and Assets - Average invested assets at cost increased to $6,135,816 in Q3 2025 from $5,795,086 in Q3 2024[7] - Net investment income before income taxes for Q3 2025 was $83,970, up from $72,738 in Q3 2024, marking an increase of 15.5%[7] - The average annual yield on investments after income taxes was 4.0% for the nine months ended September 30, 2025, compared to 3.8% for the same period in 2024[7] - Total assets increased to $9,372.7 million as of September 30, 2025, compared to $8,310.6 million at the end of 2024, reflecting a growth of 12.8%[21] Shareholder Returns - The company declared a quarterly dividend of $0.3175 per share, payable on December 24, 2025[8] - The Company’s book value per share increased to $40.30 as of September 30, 2025, up from $35.14 at the end of 2024[21] Management and Operational Insights - Operating income (loss) is used by management to assess the Company's performance, excluding realized investment gains and losses[26] - Net premiums earned represent the portion of premiums written recognized as revenue, earned on a pro-rata basis over the term of the policies[27] - Incurred losses and loss adjustment expenses are provided as supplemental information and should be read in conjunction with GAAP financial results[28] - Combined ratio-accident period basis reveals trends in the Company's results of operations that may be obscured by prior accident periods' loss reserves[29]