Mercury General Reports $166.5 Million Net Income in Latest Quarter, Driven by Revenue Growth

Mercury General Corporation reported significant financial performance improvements in its latest quarterly results, with net income for the three months ended June 30, 2025, reaching $166.5 million, a substantial increase from $62.6 million in the same period last year. This translates to a net income per share of $3.01, compared to $1.13 in the prior year. Total revenues for the quarter were $1.48 billion, up from $1.30 billion, driven primarily by a 10.6% increase in net premiums earned, which amounted to $1.37 billion, compared to $1.24 billion in the previous year.

The company also experienced notable changes in its financial metrics compared to the previous fiscal period. For the six months ended June 30, 2025, net premiums earned increased by 10.3% to $2.65 billion, while net investment income rose to $160.2 million from $134.0 million. However, net income for the six-month period decreased to $58.1 million from $136.0 million, largely due to significant catastrophe losses related to the Palisades and Eaton wildfires, which amounted to approximately $474 million net of reinsurance.

In terms of operational developments, Mercury General's total assets increased to $9.08 billion as of June 30, 2025, up from $8.31 billion at the end of 2024. The company reported a rise in cash reserves to $1.12 billion, compared to $720.3 million at the end of the previous year. The number of policies written in the California private passenger automobile line increased, contributing to the overall growth in premiums. The company also noted a decrease in ceded premiums written, which fell to $3.9 million from $31.9 million, reflecting a strategic shift in its reinsurance approach.

The filing also highlighted strategic developments, including the completion of a sale of an office building in Folsom, California, which generated a gain of $2.7 million. Additionally, the company has been actively managing its investment portfolio, resulting in net realized investment gains of $46.8 million for the six months ended June 30, 2025. The company’s investment strategy has focused on maximizing after-tax yields while maintaining a diversified portfolio, which includes a significant allocation to tax-exempt municipal bonds.

Looking ahead, Mercury General remains cautious about the potential impacts of market conditions, including inflation and regulatory changes. The company is evaluating the implications of the recently enacted One Big Beautiful Bill Act on its tax provisions. Management expressed confidence in its ability to navigate these challenges while continuing to focus on growth and profitability in its core insurance operations.