Mercury General (MCY) Q4 2025 earnings summary

Executive summary

• Reported strong recovery in Q4 2025 with a combined ratio of 88.6% after a challenging first quarter due to major wildfires, resulting in a full-year combined ratio of 96.3%.

• Net income for 2025 was $541.1 million, up from $468.0 million in 2024, with EPS of $9.77 versus $8.45 year-over-year.

• Managed over 2,900 wildfire claims and paid out more than $1.4 billion related to the Palisades and Eaton wildfires.

• Declared a quarterly dividend of $0.3175 per share, payable March 26, 2026.

Financial highlights

• Net premiums earned rose 8.5% year-over-year to $5.51 billion; net premiums written increased 6.4% to $5.72 billion.

• Net investment income grew to $328.7 million from $280.0 million, driven by higher yields and invested assets.

• Net realized investment gains for 2025 were $131.4 million, up from $88.7 million in 2024.

• Operating income reached $437.3 million, up from $397.9 million year-over-year.

• Favorable prior-year reserve development of $92 million, mainly in auto and homeowners lines.

Outlook and guidance

• California Department of Insurance approved a 6.9% rate increase for homeowners, effective July 2026.

• Management expects continued resilience and improved profitability following catastrophe impacts.