Mercury reports improved underwriting results for 2025
Mercury General reported strong fourth quarter and full year 2025 results, as underwriting performance recovered from a catastrophe-driven start to the year. Net income for the fourth quarter doubled to $202.5 million from $101.1 million a year earlier. Net premiums earned increased 6.9% to $1.45 billion, and the combined ratio improved to 88.6%.
For the full year, net income rose 15.6% to $541.1 million. Net premiums earned grew 8.5% to $5.5 billion, while direct premiums written reached $6.0 billion, up 8.8%, driven by growth across core personal lines. The full year combined ratio was 96.3%.
Catastrophe losses totaled $508 million for the year, primarily related to the Palisades and Eaton wildfires in California and severe storms in Texas and Oklahoma. Mercury has paid more than $1.4 billion tied to the California wildfires and recorded about $380 million in net losses after reinsurance and subrogation recoveries.
Investment performance also improved. After tax net investment income increased to $276 million as higher interest rates lifted portfolio yields to approximately 4.0%.
The California Department of Insurance approved a 6.9% homeowners rate increase in December 2025, expected to take effect in July 2026. Homeowners represented about 15% of the company’s net premiums earned in 2025.
At year end, Mercury reported approximately 1.96 million policies in force, including 1.04 million personal auto policies, 883,000 homeowners policies, and 34,000 commercial auto policies.
Mercury writes primarily personal auto insurance through 12 subsidiaries operating in 11 states, with 82% of direct premiums written concentrated in California. Private passenger auto accounted for $3.6 billion of 2025 premiums and homeowners for $1.6 billion. Texas represented 6.7% of premiums, with the remaining states accounting for 11.2%.
The company distributes mainly through independent agents, which generated about 88% of direct premiums written. Mercury works with roughly 8,510 independent agents and also distributes through its owned agencies, AIS and PoliSeek, and online channels.
Mercury Insurance employed about 4,300 people at December 31, 2025. Advertising spending totaled approximately $32 million for the year, focused on building brand awareness and generating leads across multiple media channels.
Bottom Line: Mercury’s personal auto policies in force increased to 1.04 million in Q4 2025 from 1.035 million in Q3 (+5,000), while total policies in force across all lines rose to 1.957 million from 1.938 million (+19,000), or about 1% quarter over quarter.
