Fitch Ratings upgraded Mercury General Corporation’s outlook to Positive from Stable while affirming the insurer’s Insurer Financial Strength rating at A- and Long-Term Issuer Default Rating at BBB.
The rating action reflects Mercury General’s improved capitalization, driven by sustained retained earnings growth over recent years. Statutory surplus rose to $2.8 billion at the end of the first half of 2026, up from $1.7 billion at year-end 2023. Operating leverage declined to 2.2 times in 1H26, compared with 2.7 times at the close of 2023.
Underwriting performance strengthened, with the company reporting a GAAP combined ratio of 89.6% for 1H26, compared with 96.3% for fiscal 2025. The 2025 figure included 9.2 percentage points of catastrophe losses, primarily from historic California wildfires.
Mercury General’s catastrophe reinsurance program, renewed on July 1, 2026, now provides coverage up to $2.79 billion, an increase from $2.14 billion in the prior program. The retention limit remains fixed at $200 million, and the program continues to offer one full reinstatement of coverage.
In California, the insurer implemented a 6.9% rate increase for homeowners’ business in July 2026. A separate filing for a roughly 6% rate increase in the state’s private passenger automobile segment has been submitted, with an effective date targeted for July 2027.
