Mercury General Corporation Announces Second Quarter Results and Declares Quarterly Dividend
Mercury General (NYSE: MCY) reported its Q2 2024 financial results, showing significant improvements. Net income reached $62.6 million, compared to a loss of $41.5 million in Q2 2023. Net premiums earned increased by 19.5% to $1.24 billion, while net premiums written grew 21.5% to $1.36 billion. The company's combined ratio improved to 98.9% from 110.1% in the previous year.
Mercury General experienced higher catastrophe losses of $125 million, up 35.9% from Q2 2023. Net investment income increased to $69 million before taxes, with an average annual yield of 4.5%. The Board of Directors declared a quarterly dividend of $0.3175 per share, payable on September 26, 2024.
Mercury General (NYSE: MCY) ha riportato i risultati finanziari per il secondo trimestre del 2024, evidenziando notevoli miglioramenti. Il reddito netto ha raggiunto i 62,6 milioni di dollari, rispetto a una perdita di 41,5 milioni di dollari nel secondo trimestre del 2023. I premi netti guadagnati sono aumentati del 19,5% a 1,24 miliardi di dollari, mentre I premi netti scritti sono cresciuti del 21,5% a 1,36 miliardi di dollari. Il rapporto combinato dell'azienda è migliorato al 98,9%, rispetto al 110,1% dell'anno precedente.
Mercury General ha subito perdite da catastrofi maggiori di 125 milioni di dollari, in crescita del 35,9% rispetto al secondo trimestre del 2023. Il reddito netto da investimenti è aumentato a 69 milioni di dollari prima delle tasse, con un rendimento annuale medio del 4,5%. Il Consiglio di Amministrazione ha dichiarato un dividendo trimestrale di 0,3175 dollari per azione, pagabile il 26 settembre 2024.
Mercury General (NYSE: MCY) informó sus resultados financieros del segundo trimestre de 2024, mostrando mejoras significativas. Los ingresos netos alcanzaron los 62.6 millones de dólares, en comparación con una pérdida de 41.5 millones de dólares en el segundo trimestre de 2023. Las primas netas devengadas aumentaron un 19.5% hasta 1.24 mil millones de dólares, mientras que las primas netas suscritas crecieron un 21.5% hasta 1.36 mil millones de dólares. La razón combinada de la compañía mejoró al 98.9% desde el 110.1% del año anterior.
Mercury General experimentó pérdidas por catástrofes más altas de 125 millones de dólares, un aumento del 35.9% respecto al segundo trimestre de 2023. Los ingresos netos por inversiones aumentaron a 69 millones de dólares antes de impuestos, con un rendimiento anual promedio del 4.5%. La Junta Directiva declaró un dividendo trimestral de 0.3175 dólares por acción, pagadero el 26 de septiembre de 2024.
머큐리 제너럴 (NYSE: MCY)은 2024년 2분기 재무 결과를 발표하며 상당한 개선을 보여주었습니다. 순이익은 6,260만 달러에 달했으며, 2023년 2분기의 4,150만 달러 손실에 비해 증가했습니다. 순보험료 수입은 19.5% 증가하여 12억 4천만 달러에 달했고, 순보험료 서면은 21.5% 증가하여 13억 6천만 달러에 이르렀습니다. 회사의 종합 비율은 지난해 110.1%에서 98.9%로 개선되었습니다.
머큐리 제너럴은 2023년 2분기 대비 35.9% 증가한 1억 2,500만 달러의 재해 손실을 겪었습니다. 세전 순투자 수익은 6,900만 달러로 증가했으며, 연평균 수익률은 4.5%입니다. 이사회는 주당 0.3175달러의 분기 배당금을 선언하였으며, 2024년 9월 26일에 지급될 예정입니다.
Mercury General (NYSE: MCY) a annoncé ses résultats financiers pour le deuxième trimestre 2024, montrant des améliorations significatives. Le revenu net a atteint 62,6 millions de dollars, contre une perte de 41,5 millions de dollars au deuxième trimestre 2023. Les primes nettes gagnées ont augmenté de 19,5% pour atteindre 1,24 milliard de dollars, tandis que les primes nettes souscrites ont crû de 21,5% pour s'établir à 1,36 milliard de dollars. Le taux combiné de l'entreprise s'est amélioré à 98,9%, contre 110,1% l'année précédente.
Mercury General a connu des pertes de catastrophes plus élevées de 125 millions de dollars, en hausse de 35,9% par rapport au deuxième trimestre 2023. Le revenu net d'investissement a augmenté à 69 millions de dollars avant impôts, avec un rendement annuel moyen de 4,5%. Le Conseil d'administration a déclaré un dividende trimestriel de 0,3175 dollar par action, payable le 26 septembre 2024.
Mercury General (NYSE: MCY) hat seine finanziellen Ergebnisse für das zweite Quartal 2024 veröffentlicht und signifikante Verbesserungen gezeigt. Der Nettogewinn erreichte 62,6 Millionen US-Dollar im Vergleich zu einem Verlust von 41,5 Millionen US-Dollar im zweiten Quartal 2023. Die verdienten Netto-Prämien stiegen um 19,5% auf 1,24 Milliarden US-Dollar, während die geschriebenen Netto-Prämien um 21,5% auf 1,36 Milliarden US-Dollar wuchsen. Die kombinierte Quote des Unternehmens verbesserte sich von 110,1% im Vorjahr auf 98,9%.
Mercury General verzeichnete höhere Katastrophenschäden von 125 Millionen US-Dollar, ein Anstieg von 35,9% im Vergleich zum zweiten Quartal 2023. Der Nettoanlageertrag stieg vor Steuern auf 69 Millionen US-Dollar mit einer durchschnittlichen Jahresrendite von 4,5%. Der Vorstand erklärte eine vierteljährliche Dividende von 0,3175 US-Dollar je Aktie, fällig am 26. September 2024.
- Net income improved to $62.6 million from a loss of $41.5 million in Q2 2023
- Net premiums earned increased by 19.5% to $1.24 billion
- Net premiums written grew 21.5% to $1.36 billion
- Combined ratio improved to 98.9% from 110.1% in Q2 2023
- Net investment income increased to $69 million before taxes
- Average annual yield on investments before taxes increased to 4.5%
- Catastrophe losses increased by 35.9% to $125 million
- Unfavorable development of $14 million on prior accident years' loss and loss adjustment expense reserves
Insights
Mercury General 's Q2 2024 results reveal a significant turnaround in financial performance, with notable improvements across key metrics. Net income swung from a loss of
The company's top-line growth is impressive, with net premiums earned increasing by
However, investors should note the increase in catastrophe losses, which rose by
The investment portfolio's performance has been solid, with net investment income rising by
The declaration of a quarterly dividend of
Mercury General's Q2 results highlight a significant improvement in underwriting performance, a critical factor for insurance companies. The combined ratio of
The substantial increase in net premiums written (
However, the unfavorable development of
The increase in catastrophe losses is notable but not alarming given the industry-wide challenges posed by extreme weather events. Mercury's ability to maintain profitability despite these losses demonstrates resilience in its underwriting and risk management practices.
The company's shift from unfavorable to favorable development in the private passenger automobile line is a positive sign, indicating improved pricing or risk selection in this key segment. However, the ongoing challenges in commercial automobile and property lines warrant close attention and potentially strategic adjustments.
Overall, Mercury General's results reflect a company successfully navigating a complex insurance landscape, with improved underwriting discipline and strong premium growth positioning it well for future profitability.
Consolidated Highlights | |||||||||||||||
Three Months Ended June 30, | Change | Six Months Ended June 30, | Change | ||||||||||||
2024 | 2023 | $ | % | 2024 | 2023 | $ | % | ||||||||
(000's except per-share amounts and ratios) | |||||||||||||||
Net premiums earned | $ 1,236,024 | $ 1,034,469 | $ 201,555 | 19.5 | $ 2,402,703 | $ 2,039,173 | $ 363,530 | 17.8 | |||||||
Net premiums written (1) | $ 1,355,460 | $ 1,115,345 | $ 240,115 | 21.5 | $ 2,640,444 | $ 2,125,546 | $ 514,898 | 24.2 | |||||||
Net realized investment gains (losses), net of tax (2) | $ 2,290 | $ (15,625) | NM | $ 32,461 | $ 23,091 | $ 9,370 | 40.6 | ||||||||
Net income (loss) | $ 62,568 | $ (41,543) | $ 104,111 | NM | $ 136,030 | $ (86,831) | $ 222,861 | NM | |||||||
Net income (loss) per diluted share | $ 1.13 | $ (0.75) | $ 1.88 | NM | $ 2.46 | $ (1.57) | $ 4.03 | NM | |||||||
Operating income (loss) (1) | $ 60,278 | $ (25,918) | NM | $ 103,569 | $ 213,491 | NM | |||||||||
Operating income (loss) per diluted share (1) | $ 1.09 | $ (0.47) | $ 1.56 | NM | $ 1.87 | $ (1.99) | $ 3.86 | NM | |||||||
Catastrophe losses net of reinsurance (3) | $ 125,000 | $ 92,000 | 35.9 | $ 197,000 | $ 190,000 | $ 7,000 | 3.7 | ||||||||
Combined ratio (4) | 98.9 % | 110.1 % | — | (11.2) pts | 99.9 % | 112.9 % | — | (13.0) pts | |||||||
NM = Not Meaningful | |
(1) | These measures are not based on |
(2) | Net realized investment gains (losses) before tax were |
(3) | The majority of 2024 catastrophe losses resulted from tornadoes, hailstorms and convective storms in |
(4) | The Company experienced unfavorable development of approximately |
Investment Results | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
(000's except average annual yield) | |||||||
Average invested assets at cost (1) | $ 5,536,170 | $ 5,045,828 | $ 5,450,760 | $ 5,033,723 | |||
Net investment income (2) (3) | |||||||
Before income taxes | $ 68,970 | $ 58,350 | $ 133,989 | $ 110,323 | |||
After income taxes | $ 57,966 | $ 49,819 | $ 112,814 | $ 94,613 | |||
Average annual yield on investments (2) (3) | |||||||
Before income taxes | 4.5 % | 4.4 % | 4.5 % | 4.2 % | |||
After income taxes | 3.8 % | 3.8 % | 3.8 % | 3.6 % | |||
(1) | Fixed maturities and short-term bonds at amortized cost; equities and other short-term investments at cost. Average invested assets at cost are based on the monthly amortized cost of the invested assets excluding cash for each period. |
(2) | Net investment income includes interest income earned on cash of approximately |
(3) | Higher net investment income before and after income taxes for the three months ended June 30, 2024 compared to the corresponding period in 2023 resulted largely from higher average invested assets and cash. Higher net investment income before and after income taxes for the six months ended June 30, 2024 compared to the corresponding period in 2023 resulted largely from higher average yield combined with higher average invested assets and cash. Average annual yield on investments before and after income taxes for the six months ended June 30, 2024 increased compared to the corresponding period in 2023, primarily due to the maturity and replacement of lower yielding investments purchased when market interest rates were lower with higher yielding investments, as a result of increasing overall market interest rates, as well as higher yields on investments based on floating interest rates. |
The Board of Directors declared a quarterly dividend of
Mercury General Corporation and its subsidiaries are a multiple line insurance organization offering predominantly personal automobile and homeowners insurance through a network of independent producers and direct-to-consumer sales in many states. For more information, visit the Company's website at www.mercuryinsurance.com.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. Certain statements contained in this report are forward-looking statements based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: 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; the possibility that actual loss experience may vary adversely from the actuarial estimates made to determine the Company's loss reserves in general; the Company's ability to obtain and the timing of the approval of premium rate changes for insurance policies issued in the states where it operates; legislation adverse to the automobile insurance industry or business generally that may be enacted in the states where the Company operates; the Company's success in managing its business in non-
MERCURY GENERAL CORPORATION AND SUBSIDIARIES SUMMARY OF OPERATING RESULTS (000's except per-share amounts and ratios) (unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Revenues: | |||||||
Net premiums earned | $ 1,236,024 | $ 1,034,469 | $ 2,402,703 | $ 2,039,173 | |||
Net investment income | 68,970 | 58,350 | 133,989 | 110,323 | |||
Net realized investment gains (losses) | 2,899 | (19,778) | 41,090 | 29,229 | |||
Other | (2,899) | 10,186 | 1,298 | 11,081 | |||
Total revenues | 1,304,994 | 1,083,227 | 2,579,080 | 2,189,806 | |||
Expenses: | |||||||
Losses and loss adjustment expenses | 936,714 | 897,810 | 1,840,679 | 1,827,339 | |||
Policy acquisition costs | 203,682 | 172,737 | 399,722 | 337,245 | |||
Other operating expenses | 81,702 | 68,341 | 158,790 | 138,031 | |||
Interest | 7,799 | 5,549 | 15,572 | 10,479 | |||
Total expenses | 1,229,897 | 1,144,437 | 2,414,763 | 2,313,094 | |||
Income (loss) before income taxes | 75,097 | (61,210) | 164,317 | (123,288) | |||
Income tax expense (benefit) | 12,529 | (19,667) | 28,287 | (36,457) | |||
Net income (loss) | $ 62,568 | $ (41,543) | $ 136,030 | $ (86,831) | |||
Basic average shares outstanding | 55,371 | 55,371 | 55,371 | 55,371 | |||
Diluted average shares outstanding | 55,375 | 55,371 | 55,373 | 55,371 | |||
Basic Per Share Data | |||||||
Net income (loss) | $ 1.13 | $ (0.75) | $ 2.46 | $ (1.57) | |||
Net realized investment gains (losses), net of tax | $ 0.04 | $ (0.28) | $ 0.59 | $ 0.42 | |||
Diluted Per Share Data | |||||||
Net income (loss) | $ 1.13 | $ (0.75) | $ 2.46 | $ (1.57) | |||
Net realized investment gains (losses), net of tax | $ 0.04 | $ (0.28) | $ 0.59 | $ 0.42 | |||
Operating Ratios-GAAP Basis | |||||||
Loss ratio | 75.8 % | 86.8 % | 76.6 % | 89.6 % | |||
Expense ratio | 23.1 % | 23.3 % | 23.3 % | 23.3 % | |||
Combined ratio | 98.9 % | 110.1 % | 99.9 % | 112.9 % | |||
MERCURY GENERAL CORPORATION AND SUBSIDIARIES CONDENSED BALANCE SHEETS AND OTHER INFORMATION (000's except per-share amounts and ratios) | |||
June 30, 2024 | December 31, 2023 | ||
(unaudited) | |||
ASSETS | |||
Investments, at fair value: | |||
Fixed maturity securities (amortized cost | $ 4,661,761 | $ 4,319,336 | |
Equity securities (cost | 815,924 | 730,693 | |
Short-term investments (cost | 147,865 | 178,491 | |
Total investments | 5,625,550 | 5,228,520 | |
Cash | 609,333 | 550,903 | |
Receivables: | |||
Premiums | 711,491 | 607,025 | |
Allowance for credit losses on premiums receivable | (6,000) | (5,300) | |
Premiums receivable, net of allowance for credit losses | 705,491 | 601,725 | |
Accrued investment income | 64,414 | 59,128 | |
Other | 33,662 | 25,603 | |
Total receivables | 803,567 | 686,456 | |
Reinsurance recoverables (net of allowance for credit losses | 29,759 | 31,947 | |
Deferred policy acquisition costs | 326,859 | 293,844 | |
Fixed assets, net | 133,972 | 151,183 | |
Operating lease right-of-use assets | 14,220 | 14,406 | |
Current income taxes | — | 4,081 | |
Deferred income taxes | 34,753 | 33,013 | |
Goodwill | 42,796 | 42,796 | |
Other intangible assets, net | 8,129 | 8,333 | |
Other assets | 98,142 | 57,915 | |
Total assets | $ 7,727,080 | $ 7,103,397 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Loss and loss adjustment expense reserves | $ 2,976,403 | $ 2,785,702 | |
Unearned premiums | 1,974,134 | 1,735,660 | |
Notes payable | 573,928 | 573,729 | |
Accounts payable and accrued expenses | 203,612 | 175,219 | |
Operating lease liabilities | 14,211 | 14,231 | |
Current income taxes | 1,469 | — | |
Other liabilities | 334,308 | 270,711 | |
Shareholders' equity | 1,649,015 | 1,548,145 | |
Total liabilities and shareholders' equity | $ 7,727,080 | $ 7,103,397 | |
OTHER INFORMATION | |||
Common stock shares outstanding | 55,371 | 55,371 | |
Book value per share | $ 29.78 | $ 27.96 | |
Statutory surplus (a) | |||
Net premiums written to surplus ratio (a) | 2.91 | 2.68 | |
Debt to total capital ratio (b) | 25.9 % | 27.1 % | |
Portfolio duration (including all short-term instruments) (a) (c) | 2.9 years | 3.0 years | |
Policies-in-force (company-wide "PIF") (a) | |||
Personal Auto PIF | 1,023 | 1,032 | |
Homeowners PIF | 806 | 760 | |
Commercial Auto PIF | 42 | 42 | |
(a) | Unaudited. |
(b) | Debt to Debt plus Shareholders' Equity (Debt at face value). |
(c) | Modified duration reflecting anticipated early calls. |
SUPPLEMENTAL SCHEDULES | |||||||
(000's except per-share amounts and ratios) (unaudited) | |||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Reconciliations of Comparable GAAP Measures to Operating Measures (a) | |||||||
Net premiums earned | $ 1,236,024 | $ 1,034,469 | $ 2,402,703 | $ 2,039,173 | |||
Change in net unearned premiums | 119,436 | 80,876 | 237,741 | 86,373 | |||
Net premiums written | $ 1,355,460 | $ 1,115,345 | $ 2,640,444 | $ 2,125,546 | |||
Incurred losses and loss adjustment expenses | $ 936,714 | $ 897,810 | $ 1,840,679 | $ 1,827,339 | |||
Change in net loss and loss adjustment expense reserves | (117,221) | (45,081) | (192,639) | (132,753) | |||
Paid losses and loss adjustment expenses | $ 819,493 | $ 852,729 | $ 1,648,040 | $ 1,694,586 | |||
Net income (loss) | $ 62,568 | $ (41,543) | $ 136,030 | $ (86,831) | |||
Less: Net realized investment gains (losses) | 2,899 | (19,778) | 41,090 | 29,229 | |||
Tax on net realized investment gains (losses)(b) | 609 | (4,153) | 8,629 | 6,138 | |||
Net realized investment gains (losses), net of tax | 2,290 | (15,625) | 32,461 | 23,091 | |||
Operating income (loss) | $ 60,278 | $ (25,918) | $ 103,569 | $ (109,922) | |||
Per diluted share: | |||||||
Net income (loss) | $ 1.13 | $ (0.75) | $ 2.46 | $ (1.57) | |||
Less: Net realized investment gains (losses), net of tax | 0.04 | (0.28) | 0.59 | 0.42 | |||
Operating income (loss) | $ 1.09 | $ (0.47) | $ 1.87 | $ (1.99) | |||
Combined ratio | 99.9 % | 112.9 % | |||||
Effect of estimated prior periods' loss development | (0.3) % | 1.0 % | |||||
Combined ratio-accident period basis | 99.6 % | 113.9 % | |||||
(a) | See "Information Regarding GAAP and Non-GAAP Measures" on page 7. |
(b) | Based on federal statutory rate of |
Information Regarding GAAP and Non-GAAP Measures
The Company has presented information within this document containing operating measures which in management's opinion provide investors with useful, industry specific information to help them evaluate, and perform meaningful comparisons of, the Company's performance, but that may not be presented in accordance with GAAP. These measures are not intended to replace, and should be read in conjunction with, the GAAP financial results.
Net income (loss) is the GAAP measure that is most directly comparable to operating income (loss). Operating income (loss) is net income (loss) excluding realized investment gains and losses, net of tax. Operating income (loss) is used by management along with the other components of net income (loss) to assess the Company's performance. Management uses operating income (loss) as an important measure to evaluate the results of the Company's insurance business. Management believes that operating income (loss) provides investors with a valuable measure of the Company's ongoing performance as it reveals trends in the Company's insurance business that may be obscured by the effect of net realized investment gains and losses. Realized investment gains and losses may vary significantly between periods and are generally driven by external economic developments such as capital market conditions. Accordingly, operating income (loss) highlights the results from ongoing operations and the underlying profitability of the Company's core insurance business. Operating income (loss), which is provided as supplemental information and should not be considered as a substitute for net income (loss), does not reflect the overall profitability of the Company's business. It should be read in conjunction with the GAAP financial results. See "Supplemental Schedules" above for a reconciliation of net income (loss) to operating income (loss).
Net premiums earned, the most directly comparable GAAP measure to net premiums written, represents the portion of premiums written that is recognized as revenue in the financial statements for the periods presented and earned on a pro-rata basis over the term of the policies. Net premiums written is a statutory financial measure which represents the premiums charged on policies issued during a fiscal period less any applicable reinsurance. Net premiums written is designed to determine production levels and is meant as supplemental information and not intended to replace net premiums earned. Such information should be read in conjunction with the GAAP financial results. See "Supplemental Schedules" above for a reconciliation of net premiums earned to net premiums written.
Incurred losses and loss adjustment expenses is the most directly comparable GAAP measure to paid losses and loss adjustment expenses. Paid losses and loss adjustment expenses excludes the effects of changes in the loss reserve accounts. Paid losses and loss adjustment expenses is provided as supplemental information and is not intended to replace incurred losses and loss adjustment expenses. It should be read in conjunction with the GAAP financial results. See "Supplemental Schedules" above for a reconciliation of incurred losses and loss adjustment expenses to paid losses and loss adjustment expenses.
Combined ratio is the most directly comparable measure to combined ratio-accident period basis. Combined ratio-accident period basis is computed as the difference between two GAAP operating ratios: the combined ratio and prior accident periods' loss development ratio. Management believes that combined ratio-accident period basis is useful to investors and it is used to reveal the trends in the Company's results of operations that may be obscured by development on prior accident periods' loss reserves. Combined ratio-accident period basis is meant as supplemental information and is not intended to replace the GAAP combined ratio. It should be read in conjunction with the GAAP financial results. See "Supplemental Schedules" above for a reconciliation of GAAP combined ratio to combined ratio-accident period basis.
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SOURCE Mercury General Corporation
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