Mercury General Q3 2022 Earnings Report
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
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