AM Best Revises Mercury Ratings Outlook to Stable
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
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Should l Buy MCY?
Source: Businesswire
- Outlook Revision: AM Best has revised the outlook for Mercury Casualty Group from negative to stable while affirming its Financial Strength Rating of A (Excellent), indicating improvements in financial health that bolster investor confidence.
- Catastrophe Losses: Despite facing total losses of $2.2 billion from the 2025 California wildfires, Mercury reported net catastrophe losses of $380 million, demonstrating the effectiveness of its reinsurance structure in mitigating financial impacts.
- Reinsurance Program Update: Mercury renewed its catastrophe reinsurance program on July 1, 2025, increasing coverage limits to $2.14 billion from $1.29 billion, significantly enhancing its capacity to manage future risks.
- Policyholder Surplus Growth: As of December 31, 2025, Mercury reported a policyholder surplus of $2.4 billion, a $362 million increase from the previous year, reflecting ongoing improvements in capital management and profitability that strengthen its competitive position in the market.
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About MCY
Mercury General Corporation is an insurance holding company engaged in writing personal automobile insurance business. The Company writes homeowners, commercial automobile, commercial property, mechanical protection and umbrella insurance. Its automobile coverage includes collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured, and uninsured motorists, and other hazards. Its homeowners’ coverage includes dwelling, liability, personal property, and other coverages. It offers standard, non-standard and preferred private passenger automobile insurance. It also offers homeowners insurance in approximately 10 states, commercial automobile insurance in approximately four states, and mechanical protection insurance in various states. Its subsidiaries include Mercury Casualty Company, California Automobile Insurance Company, Orion Indemnity Company, American Mercury Insurance Company, Animas Funding LLC, and Mercury Insurance Company of Illinois.
About the author

Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
- Outlook Revision: AM Best has revised the outlook for Mercury Casualty Group from negative to stable while affirming its Financial Strength Rating of A (Excellent), indicating improvements in financial health that bolster investor confidence.
- Catastrophe Losses: Despite facing total losses of $2.2 billion from the 2025 California wildfires, Mercury reported net catastrophe losses of $380 million, demonstrating the effectiveness of its reinsurance structure in mitigating financial impacts.
- Reinsurance Program Update: Mercury renewed its catastrophe reinsurance program on July 1, 2025, increasing coverage limits to $2.14 billion from $1.29 billion, significantly enhancing its capacity to manage future risks.
- Policyholder Surplus Growth: As of December 31, 2025, Mercury reported a policyholder surplus of $2.4 billion, a $362 million increase from the previous year, reflecting ongoing improvements in capital management and profitability that strengthen its competitive position in the market.
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- Outlook Revision: AM Best has revised the outlook for Mercury Casualty Group from negative to stable while affirming its Financial Strength Rating of A (Excellent) and Long-Term Issuer Credit Ratings of 'a' (Excellent), reflecting the company's strong balance sheet and appropriate enterprise risk management.
- Catastrophe Losses: Despite recording $2.2 billion in gross catastrophe losses from the 2025 California wildfires, Mercury reported only $380 million in net catastrophe losses after reinsurance recoverables, demonstrating effective risk management in catastrophic events.
- Reinsurance Program Update: Mercury renewed its catastrophe reinsurance program on July 1, 2025, increasing coverage limits to $2.14 billion from $1.29 billion, significantly enhancing its capacity to manage future risks.
- Strategic Initiatives Impact: AM Best noted that strategic initiatives implemented by Mercury's management are continuing to improve underwriting profitability, which is expected to strengthen future underwriting performance despite uncertainties arising from the wildfires.
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- Customer Service Recognition: Mercury Insurance has been awarded a spot on USA Today's 2026 list of America's Best Customer Service providers, highlighting its ability to deliver high-quality customer experiences in the financial services sector, thereby reinforcing its market position.
- Rigorous Evaluation Standards: The ranking is based on a comprehensive assessment of companies across key service criteria, including solution orientation, professionalism, transparency, and reliability, showcasing Mercury's ongoing commitment to customer service excellence.
- Customer Feedback Driven: CEO Gabriel Tirador emphasized that this honor is driven by customer feedback, underscoring the importance of demonstrating compassion and quick responses in service, which enhances customer trust.
- Community Responsibility: Mercury's service philosophy is closely tied to its role in the community, focusing on supporting families after severe weather events and helping customers understand risk and protection measures, reflecting the company's long-term commitment to its clients.
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- Customer Service Recognition: Mercury Insurance has been named in USA Today's 2026 list of America's Best Customer Service providers, highlighting its exceptional performance in customer experience within the financial services sector.
- Comprehensive Evaluation: The ranking is based on feedback from over 57,000 U.S. customers, large-scale nationwide consumer surveys, and independent validation, ensuring fairness and thoroughness in the assessment, which enhances Mercury's brand reputation.
- Reinforcement of Core Values: CEO Gabriel Tirador noted that this honor is driven by customer feedback, emphasizing the importance of trust, accountability, and continuous improvement in service, which strengthens customer loyalty to the brand.
- Community Commitment: Mercury's service philosophy is closely tied to its role in the community, focusing on supporting families after severe weather events and helping customers understand risk and protection measures, further solidifying its position in customers' minds.
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- Teen Accident Risk: According to the CDC, drivers aged 16-19 are nearly three times more likely to be involved in a fatal crash per mile driven compared to those aged 20 and older, highlighting the serious safety risks faced by young drivers.
- Importance of the First Year: Federal safety data indicates that the highest crash risk occurs during a teen's first year of independent driving, with factors such as night driving, teen passengers, and distracted driving significantly increasing the likelihood of accidents, underscoring the critical role of parental guidance during this phase.
- Positive Trend in Accident Reduction: Although over 2,800 teens aged 13-19 were killed in motor vehicle crashes in 2023, the decline in teen crash rates over time due to safer vehicles, graduated licensing programs, and increased awareness of distracted driving demonstrates the effectiveness of safety measures.
- Importance of Insurance and Preparation: Mercury Insurance emphasizes that families should focus on active coaching and appropriate insurance coverage to mitigate teen driving risks, ensuring that young drivers can achieve independence while driving safely and avoiding potential dangers.
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- Teen Crash Risk: According to CDC data, drivers aged 16-19 are nearly three times more likely to be involved in a fatal crash per mile driven compared to those aged 20 and older, highlighting the urgent need for effective safety measures to mitigate accident rates among young drivers.
- Importance of the First Year: Federal safety data indicates that the highest crash risk occurs during a teen's first year of independent driving, with factors such as night driving, peer passengers, and distracted driving significantly increasing risk, while seat belts, graduated licensing laws, and supervised practice can effectively reduce it.
- Effective Risk Reduction Strategies: Mercury Insurance advises families to focus on preparation rather than panic by logging supervised driving time in various conditions, creating a written driving agreement, and limiting teen passengers to foster safe driving habits and confidence.
- Importance of Insurance Planning: It is crucial to promptly add teens to insurance policies and revisit liability limits to protect family assets after they obtain their licenses, while also inquiring about discounts for good students and driver training to ensure comprehensive coverage at a lower cost.
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