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Mercury General Q1 Earnings & Revenues Top Estimates, Premium Rise Y/Y
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Key Takeaways
MCY posted Q1 EPS of $3.50, beating estimates and rebounding from a prior-year loss.
Mercury General growth was driven by higher premiums, lower catastrophe losses and expense improvement.
MCY's combined ratio improved sharply to 89.3, aided by a significant drop in catastrophe losses.
Mercury General Corporation (MCY - Free Report) reported first-quarter 2026 operating income of $3.50 per share, which beat the Zacks Consensus Estimate by 63%. The bottom line rebounded from a loss of $2.29 incurred in the prior-year quarter.
Total operating revenues in the quarter were $1.5 billion, up 10.5% year over year. The top line surpassed the consensus estimate by 6.1%.
The better-than-expected quarterly results were driven by higher net premiums, favorable investment results, lower catastrophe losses and improved operating expenses.
Mercury General Corporation Price, Consensus and EPS Surprise
Net premiums earned climbed 13.2% year over year to $1.4 billion, which surpassed the Zacks Consensus Estimate by 6.7%.
Net investment income, before income taxes, increased 5.1% year over year to $85.6 million, driven primarily by higher average invested assets and cash, along with an improved average yield. The figure missed the Zacks Consensus Estimate by approximately 3.5%.
Total expenses decreased 15.1% year over year to $1.3 billion, primarily due to lower losses and loss adjustment expenses, policy acquisition costs and interest expenses.
Catastrophe losses, net of reinsurance, totaled $93 million, lower than $447 million incurred in the year-ago quarter. The majority of 2026 catastrophe losses stemmed from the Palisades and Eaton wildfires in California, as well as severe storms in Texas, Oklahoma and California.
The combined ratio — a measure of underwriting profitability — improved 2,990 basis points (bps) year over year to 89.3. The Zacks Consensus Estimate was pegged at 95.5. The loss ratio improved 3,090 bps to 64.2, while the expense ratio deteriorated 110 bps to 25.1.
MCY’s Financial Update
Mercury General exited first-quarter 2026 with total assets of $9.8 billion, which were 3.3% above the 2025-end level.
As of March 31, 2026, MCY reported a solid cash balance of $1.3 billion, reflecting an increase of 2.7% from the 2025-end level.
Notes payable of $574.6 million inched up 0.2% from the 2025-end level. The debt-to-total capitalization ratio improved 100 basis points year over year to 18.2% as of March 31, 2026.
Shareholder equity was $2.5 billion as of March 31, 2026, up 7.1% from the 2025-end level.
As of March 31, 2026, book value per share was $46.76, up 7.2% from the 2025-end level.
Dividend Update
The board of directors declared a quarterly dividend of 31.75 cents per share, payable on June 25, 2026, to shareholders of record as of June 11.
Performance of Other Property and Casualty Insurers
AXIS Capital Holdings Limited (AXS - Free Report) reported first-quarter 2026 operating income of $3.42 per share, which outpaced the Zacks Consensus Estimate of $3.23 and rose 7.9% year over year.
Total operating revenues of $1.7 billion marginally beat the Zacks Consensus Estimate by 0.4%. The top line rose nearly 7.7% year over year on higher premiums earned. Net premiums written increased 9% to $1.9 billion, driven by a 24% rise in the Insurance segment, partially offset by a 13% decline in the Reinsurance segment.
Chubb Limited (CB - Free Report) reported first-quarter 2026 core operating income of $6.82 per share, which outpaced the Zacks Consensus Estimate by 5.2%. The bottom line decreased 85.2% year over year. CB’s total operating revenues improved 11.8% year over year to $15.3 billion. The top line beat the Zacks Consensus Estimate by 3%.
Chubb’s net premiums written improved 10.7% year over year to $14 billion in the quarter. Our estimate was $13.6 billion, while the Zacks Consensus Estimate was pegged at $13.5 billion. Net investment income totaled $1.7 billion, up 9.5% year over year. The Zacks Consensus Estimate was pegged at $1.8 billion.
First American Financial Corporation (FAF - Free Report) reported first-quarter 2026 operating earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 25.4% and rose 58.3% year over year.
Operating revenues climbed 16.2% to $1.8 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 1.08%. Direct premiums and escrow fees reached $660.2 million, marking a 17.7% increase from the prior-year level. The figure exceeded the Zacks Consensus Estimate by 17.7% and our model estimate by 17.7%.
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Mercury General Q1 Earnings & Revenues Top Estimates, Premium Rise Y/Y
Key Takeaways
Mercury General Corporation (MCY - Free Report) reported first-quarter 2026 operating income of $3.50 per share, which beat the Zacks Consensus Estimate by 63%. The bottom line rebounded from a loss of $2.29 incurred in the prior-year quarter.
Total operating revenues in the quarter were $1.5 billion, up 10.5% year over year. The top line surpassed the consensus estimate by 6.1%.
The better-than-expected quarterly results were driven by higher net premiums, favorable investment results, lower catastrophe losses and improved operating expenses.
Mercury General Corporation Price, Consensus and EPS Surprise
Mercury General Corporation price-consensus-eps-surprise-chart | Mercury General Corporation Quote
Operational Update
Net premiums earned climbed 13.2% year over year to $1.4 billion, which surpassed the Zacks Consensus Estimate by 6.7%.
Net investment income, before income taxes, increased 5.1% year over year to $85.6 million, driven primarily by higher average invested assets and cash, along with an improved average yield. The figure missed the Zacks Consensus Estimate by approximately 3.5%.
Total expenses decreased 15.1% year over year to $1.3 billion, primarily due to lower losses and loss adjustment expenses, policy acquisition costs and interest expenses.
Catastrophe losses, net of reinsurance, totaled $93 million, lower than $447 million incurred in the year-ago quarter. The majority of 2026 catastrophe losses stemmed from the Palisades and Eaton wildfires in California, as well as severe storms in Texas, Oklahoma and California.
The combined ratio — a measure of underwriting profitability — improved 2,990 basis points (bps) year over year to 89.3. The Zacks Consensus Estimate was pegged at 95.5. The loss ratio improved 3,090 bps to 64.2, while the expense ratio deteriorated 110 bps to 25.1.
MCY’s Financial Update
Mercury General exited first-quarter 2026 with total assets of $9.8 billion, which were 3.3% above the 2025-end level.
As of March 31, 2026, MCY reported a solid cash balance of $1.3 billion, reflecting an increase of 2.7% from the 2025-end level.
Notes payable of $574.6 million inched up 0.2% from the 2025-end level. The debt-to-total capitalization ratio improved 100 basis points year over year to 18.2% as of March 31, 2026.
Shareholder equity was $2.5 billion as of March 31, 2026, up 7.1% from the 2025-end level.
As of March 31, 2026, book value per share was $46.76, up 7.2% from the 2025-end level.
Dividend Update
The board of directors declared a quarterly dividend of 31.75 cents per share, payable on June 25, 2026, to shareholders of record as of June 11.
MCY’s Zacks Rank
MCY currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Property and Casualty Insurers
AXIS Capital Holdings Limited (AXS - Free Report) reported first-quarter 2026 operating income of $3.42 per share, which outpaced the Zacks Consensus Estimate of $3.23 and rose 7.9% year over year.
Total operating revenues of $1.7 billion marginally beat the Zacks Consensus Estimate by 0.4%. The top line rose nearly 7.7% year over year on higher premiums earned. Net premiums written increased 9% to $1.9 billion, driven by a 24% rise in the Insurance segment, partially offset by a 13% decline in the Reinsurance segment.
Chubb Limited (CB - Free Report) reported first-quarter 2026 core operating income of $6.82 per share, which outpaced the Zacks Consensus Estimate by 5.2%. The bottom line decreased 85.2% year over year. CB’s total operating revenues improved 11.8% year over year to $15.3 billion. The top line beat the Zacks Consensus Estimate by 3%.
Chubb’s net premiums written improved 10.7% year over year to $14 billion in the quarter. Our estimate was $13.6 billion, while the Zacks Consensus Estimate was pegged at $13.5 billion. Net investment income totaled $1.7 billion, up 9.5% year over year. The Zacks Consensus Estimate was pegged at $1.8 billion.
First American Financial Corporation (FAF - Free Report) reported first-quarter 2026 operating earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 25.4% and rose 58.3% year over year.
Operating revenues climbed 16.2% to $1.8 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 1.08%. Direct premiums and escrow fees reached $660.2 million, marking a 17.7% increase from the prior-year level. The figure exceeded the Zacks Consensus Estimate by 17.7% and our model estimate by 17.7%.