Mercury General Corporation bounces back from loss
Mercury General Corporation bounces back from loss | Insurance Business America
Insurance News
Mercury General Corporation bounces back from loss
Interim financials show major turnaround in Q2
Insurance News
By
Terry Gangcuangco
Mercury General Corporation has published its financial results for the second quarter of 2024, marking a major turnaround from last year.
Here’s how the multi-line insurance organization fared in the three months ended June 30:
Metric
Q2 2024
Q2 2023
Net premiums earned
$1.24 billion
$1.03 billion
Net premiums written
$1.36 billion
$1.12 billion
Net realized investment gains (losses), net of tax
$2.29 million
$(15.63 million)
Net income (loss)
$62.57 million
$(41.54 million)
Operating income (loss)
$60.28 million
$(25.92 million)
Catastrophe losses net of reinsurance
$125 million
$92 million
Combined ratio
98.9%
110.1%
Lifting the lid on the catastrophe losses, Mercury noted: “The majority of 2024 catastrophe losses resulted from tornadoes, hailstorms, and convective storms in Texas and Oklahoma and winter storms and rainstorms in California.
“The majority of 2023 catastrophe losses resulted from winter storms and rainstorms in California, Texas, and Oklahoma. The company experienced unfavorable development of approximately $9 million and favorable development of approximately $1 million on prior years’ catastrophe losses for the six months ended June 30, 2024 and 2023, respectively.”
Meanwhile, it was also pointed out that the year-to-date unfavorable development in 2024 was primarily attributable to higher than estimated losses and loss adjustment expenses in the commercial automobile and commercial property lines of insurance business and catastrophe losses.
In terms of investments, Mercury’s pre-tax net investment income in the quarter amounted to $68.97 million, while after-tax net investment income reached $57.97 million.
“Net investment income includes interest income earned on cash of approximately $6.2 million and $2.8 million ($4.9 million and $2.2 million after tax) for the three months ended June 30, 2024 and 2023, respectively,” the company said.
It added: “Higher net investment income before and after income taxes for the three months ended June 30, 2024 compared to the corresponding period in 2023 resulted largely from higher average invested assets and cash.”
Mercury’s board declared a quarterly dividend of $0.3175 per share.
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