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Sep 30, 2022
Mercury General Q3 2022 Earnings Report
Mercury General reported a net loss for Q3 2022 due to net realized investment losses and increased losses and loss adjustment expenses.
Key Takeaways
Mercury General Corporation reported a net loss of $98.3 million for the third quarter of 2022, compared to a net income of $1.3 million in the same period of 2021. The company's combined ratio deteriorated to 102.8% from 99.0% in the prior year, driven by inflationary pressures and social inflation impacting auto parts, labor, and medical expenses.
Net loss of $98.3 million, or $1.78 per diluted share, compared to net income of $1.3 million, or $0.02 per diluted share, in Q3 2021.
Operating income decreased to $15.6 million from $35.7 million in the prior year.
Combined ratio worsened to 102.8% from 99.0% in Q3 2021, reflecting inflationary pressures and social inflation.
Net premiums earned increased by 6.0% to $996.9 million.
Mercury General
Mercury General
Mercury General Revenue by Segment
Revenue by Segment
Net Premiums Earned Revenue
CapyFin.comNet Investment Income Revenue
CapyFin.comOther Revenue
CapyFin.com Forward Guidance
The Company has filed for rate increases in many states and is taking various non-rate actions to improve profitability.
Positive Outlook
- Filed for rate increases in many states.
- Taking various non-rate actions to improve profitability.
- Focus on managing business in non-California states.
- Efforts to successfully manage claims organization outside of California.
- Ability to successfully allocate resources to operations in other states.
Challenges Ahead
- Changes in the demand for the Company's insurance products.
- Inflation and general economic conditions, including general market risks associated with the Company's investment portfolio.
- The accuracy and adequacy of the Company's pricing methodologies.
- Catastrophes in the markets served by the Company.
- Uncertainties related to estimates, assumptions and projections generally.
Revenue & Expenses
Visualization of income flow from segment revenue to net income