Mercury General reported a net loss of $108.3 million for the first quarter of 2025, a reversal from net income of $73.5 million in the same period last year. The decline was primarily driven by catastrophe losses linked to major wildfires in Southern California in January.
Net premiums earned for the quarter ended March 31 totaled $1.28 billion, an increase of 10% compared to $1.17 billion in Q1 2024. Net premiums written rose 2.3% year over year to $1.31 billion.
The company recorded net realized investment gains, net of tax, of $18.4 million for the quarter, down from $30.2 million in the prior-year period. Operating loss income for Q1 2025 was $126.8 million, compared to operating income of $43.3 million in Q1 2024.
This equated to an operating loss per diluted share of $2.29, compared to earnings of $0.78 per diluted share in the same quarter last year.
Mercury’s combined ratio for the quarter stood at 119.2%, up from 100.9% in Q1 2024, reflecting elevated loss activity from catastrophe events. Catastrophe losses, net of reinsurance, reached $447 million in the quarter, up from $72 million a year earlier.
For the fourth quarter of 2024, net premiums earned reached $1.35 billion, compared to $1.14 billion in the same period in 2023. Net investment income increased to $73.3 million from $63.3 million in the prior-year quarter.
Total revenues for the quarter were $1.37 billion, largely in line with the $1.37 billion reported in Q4 2023. Net income for the quarter was $101.1 million, down from $191.4 million a year earlier.
The increase in catastrophe losses was attributed to wind-driven wildfires in Southern California during January 2025, specifically the Palisades and Eaton fires. The company reported net catastrophe losses and loss adjustment expenses (LAE) of approximately $414 million related to these events.
This figure includes $331 million in direct net losses and LAE and $83 million related to Mercury's share of California FAIR Plan losses, reduced by a $25 million recoupable assessment.
Mercury estimated total gross catastrophe losses and LAE from the wildfires at approximately $2.15 billion, excluding its FAIR Plan share and estimated subrogation recoveries. The company applied an estimated $525 million in subrogation recoveries and ceded $1.29 billion to its reinsurers, resulting in $331 million in net catastrophe losses directly incurred.
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