Mercury General (MCY) investor relations material

Executive summary

• Net premiums earned rose 9.6% year-over-year for Q2 2026, driven by rate increases and policy growth in California auto and homeowners lines.

• Net income for Q2 2026 was $263.5 million, up from $166.5 million in Q2 2025, with EPS of $4.76 versus $3.01.

• Combined ratio improved to 89.9% from 92.5% year-over-year, reflecting better underwriting performance.

• Catastrophe losses net of reinsurance were $71 million in Q2 2026, mainly from Texas and Oklahoma storms.

• Quarterly dividend of $0.3175 per share declared, payable September 24, 2026.

Financial highlights

• Total revenues for Q2 2026 were $1.68 billion, up from $1.48 billion in Q2 2025.

• Net investment income increased to $89.8 million from $78.8 million year-over-year.

• Net realized investment gains were $86.5 million in Q2 2026, up from $23.5 million in Q2 2025.

• Six-month net income was $453.9 million, up from $58.1 million in the prior year period.

• Book value per share increased to $51.20 as of June 30, 2026, from $43.64 at year-end 2025.

Outlook and guidance

• New California homeowners rate increase of 6.9% effective July 2026; further 6% auto rate increase application planned for July 2027.

• Regulatory changes in California allow catastrophe modeling and reinsurance costs in ratemaking, expected to impact future pricing.

• Board declared a quarterly dividend, reflecting confidence in ongoing financial strength.

• Management notes significant risks including catastrophe exposure, regulatory changes, and competitive pressures.