Mercury Insurance is increasing its engagement in California's property insurance market, with plans to write new policies in wildfire-affected areas and expand its national approach to catastrophe risk management.
The company has grown its market share in California homeowners multiperil insurance for five consecutive years, reaching 6.67% and becoming the third-largest writer in the state.
According to Steve Bennett (pictured above), senior director of climate and catastrophe science at Mercury, the recent Los Angeles wildfires reinforced the company’s existing plans to develop internal climate science capabilities.
“We can’t stop the next hurricane from impacting Long Island, but we can stop the next Altadena,” Bennett said in a report from AM Best. He described wildfires as a solvable challenge and emphasized the insurance industry’s role in developing solutions.
Mercury had already been planning to expand its internal catastrophe risk science team prior to the wildfires, but the scale and impact of recent events further underlined the need for a more refined understanding of the threat.
Bennett joined the company earlier this year, during a period when wildfires were actively burning in Los Angeles. Despite expecting a strategic shift away from the state, he said he encountered a commitment to California and a focus on collaborative risk reduction with communities, regulators, and other stakeholders.
Mercury was the first carrier to resume writing new homeowners policies in Paradise, California, following the 2018 Camp Fire, which destroyed much of the town and remains the state’s deadliest and most destructive wildfire.
Meanwhile, the financial impact of recent LA wildfires on Mercury has been substantial. In the first quarter of 2025, the company reported an operating loss of $126.8 million. Catastrophe losses, net of reinsurance, totaled $447 million – more than six times the $72 million in losses reported during the same period in the previous year.
To support its exposure to large-scale catastrophe events, Mercury has structured a reinsurance program that covers losses exceeding $150 million. The company’s current catastrophe reinsurance treaty provides up to $1.29 billion in protection per event.
Bennett said that while California is the company’s most mature wildfire market, Mercury is also examining risks in other parts of the country. The climate and catastrophe team is exploring expansion into Texas, Oklahoma, Georgia, and New York – states that face wildfire exposure as well as threats from hurricanes and severe storms.
Bennett cited Asheville, North Carolina, as an example of less expected risk zones. The area suffered extensive damage from flooding and landslides triggered by Hurricane Helene, which was downgraded but still caused record-setting rainfall. He said that even areas considered climate refuges may face significant hazards.
“Every community is susceptible to one catastrophe or another,” he said. “As an insurer, we are at the nexus between communities and events that cause losses.”
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