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Mercury General Q2 combined ratio improves as wildfire reserve costs persist
Q2 2026 results still reflected about $80 million of adverse reserve development for the Palisades and Eaton fires, along with $72 million of additional gross losses from storms in Texas and Oklahoma.
Mercury General Corporation reported a second-quarter 2026 combined ratio of 89.9%, improving 2.6 percentage points from 92.5% in Q2 2025, while net income rose 58.3% to $263.5 million, according to Insurance Business.
The year-over-year improvement came with an important caveat, since first-half 2025 results were heavily distorted by catastrophe losses from the Palisades and Eaton wildfires in California. Insurance Business said those wildfires produced net catastrophe losses of $460 million in the first half of 2025, and in Q1 2025 alone the company exhausted its reinsurance tower and paid a $101 million reinstatement premium.
Wildfire costs have not fully ended, the outlet added. For Q2 2026, Mercury recorded about $80 million of adverse reserve development tied to the Palisades and Eaton fires, events from January 2025, and Verisk estimated total insured losses from the two fires at between $28 billion and $35 billion, a scale that can continue to drive reserve development across carriers into 2026.
On underwriting trends, Insurance Business said Mercury’s Q2 loss ratio fell to 65.0% from 68.8%, while the expense ratio rose to 24.9% from 23.7%. The insurer also reported net premiums written of $1.56 billion for the quarter, up 5.3%, with personal auto policies in force at 1.07 million at June 30 and homeowners policies at 938,000.