Mercury General Corp reported a net income of $230.9 million in the third quarter, reversing an $8.2 million loss from the same period last year, driven by increased investment gains.
The property and casualty insurer’s net investment gains, after tax, reached $90.4 million, a significant shift from a $71.1 million loss in the prior year, according to its earnings statement.
The company’s consolidated net premiums written rose 17.9% to $1.42 billion, while its combined ratio improved to 93.6 from 98.6 in the third quarter of 2023. Catastrophe losses, net of reinsurance, totaled $39 million, up from $33 million in the same quarter last year.
This quarter’s losses were primarily from Hurricane Helene, which impacted Florida and Georgia, along with tornadoes, hailstorms, convective storms in Texas and Oklahoma, and winter storms and rainstorms in California.
Hurricane Helene, which made landfall with 140 mph winds on Sept. 26 along a less populated stretch of Florida’s west coast, led to insured loss estimates of up to $17.5 billion. Hurricane Milton subsequently struck Florida as a Category 3 storm on October 9.
However, Mercury General expects minimal financial impact from Milton due to its limited exposure in Florida, where it only writes automobile insurance, representing roughly 3% of its direct premiums written.
Based on reported and anticipated claims, Mercury General estimates total catastrophe losses from Hurricane Milton will not exceed $5 million, which will be recorded as losses in the fourth quarter of 2024, the company noted in its statement.
Mercury General’s operating entities maintain a Best’s Financial Strength Rating of A (Excellent), as per AM Best.
In July, the company also marked a major turnaround from last year, reporting that 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.
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