Mercury General Corporation announced strong financial results for the second quarter ended June 30, 2025. Net premiums earned increased 10.6% year-over-year to $1,366.7 million, and operating income surged 145.4% to $147.9 million, or $2.67 per diluted share, compared to Q2 2024.
The combined ratio improved significantly to 92.5% in Q2 2025 from 98.9% in the prior-year quarter. Catastrophe losses net of reinsurance decreased substantially to $13.0 million, down 89.6% from $125.0 million in Q2 2024.
For the six months ended June 30, 2025, net catastrophe losses and loss adjustment expenses from the January 2025 Palisades and Eaton wildfires totaled approximately $359 million. This figure reflects gross losses of $2,153 million, significantly offset by $528 million in estimated subrogation recovery for the Eaton fire and $1,293.5 million ceded to reinsurers.
The company also recovered approximately $46.5 million from selling its subrogation rights on the Palisades fire to a third party. Mercury had exhausted its $1,290 million catastrophe reinsurance limits for the wildfires, paying $101 million in reinstatement premiums, with $51 million earned in Q2 2025.
Mercury's share of California FAIR Plan losses from the wildfires was approximately $99 million, which was partially offset by a $25 million recoupable assessment, resulting in a net FAIR Plan loss of $74 million.
As of June 30, 2025, the company had paid out approximately $1,320 million for wildfire claims and had billed reinsurers $933 million, collecting 100% of that amount by July 15, 2025, demonstrating strong liquidity management.
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