Mercury General Corporation announced its fourth quarter and fiscal year 2024 results on February 11, 2025. For Q4 2024, net premiums earned increased by 18.1% to $1,352.1 million, and operating income rose 142.0% to $153.9 million, or $2.78 per diluted share. The combined ratio improved to 91.4% from 98.6% in Q4 2023.
For the full fiscal year 2024, net premiums earned grew 18.7% to $5,075.5 million, and operating income surged to $397.9 million, or $7.19 per diluted share, a significant increase from $16.5 million in 2023. The full-year combined ratio improved to 96.0% from 105.4% in 2023.
The California Department of Insurance approved a 12% rate increase for the California homeowners line of business in January 2025, effective March 2025. This line represented approximately 16% of the company's total net premiums earned in 2024.
The company provided an update on the January 2025 Southern California wildfires, estimating gross catastrophe losses between $1.6 billion and $2.0 billion, with net catastrophe losses before taxes ranging from $155 million to $325 million. The reinsurance program provides $1,290 million of limits after a $150 million retention, with a potential $101 million reinstatement premium.
As of February 7, 2025, Mercury had paid out $800 million related to the wildfires and collected $500 million from reinsurers, maintaining over $1 billion in cash and short-term investments. The Board of Directors declared a quarterly dividend of $0.3175 per share, payable March 27, 2025.
Following the wildfires, Fitch and Moody's placed the company's ratings under negative outlook, with Moody's downgrading its financial strength rating from A2 to A3 and Senior Debt rating from Baa2 to Baa3, reflecting uncertainty around future reinsurance costs and potential for additional catastrophe events.
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