Mercury General Corporation (MCY)
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Mercury General insures cars and homes mostly in California — and in January 2025 it was hit by the largest loss in its history: the Palisades and Eaton wildfires, roughly $2.2 billion in gross losses. The company still closed the year with a record net income of $541.1 million. We read the annual report (10-K) for fiscal year 2025: reinsurance, about $586 million of subrogation and a 96.3 percent combined ratio turned the catastrophe into a profit year — while the stock shows up at a trailing P/E around 10 and a return on equity near 25 percent in our Joshua growth scanner (data as of July 17, 2026). Not investment advice — just the question of how much of a record profit survives once a subrogation promise and a spent reinsurance airbag are counted in.
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Basics
Performance
Valuation
Profitability
Balance Sheet & Safety
Growth
Dividend
Quality & Screener
AI Rating
NeutralGeprüft am 17.07.2026 gegen die Geschäftsberichte (10-K) für die Geschäftsjahre 2025 (eingereicht 17.02.2026) und 2024 (11.02.2025) sowie die Quartalsberichte (10-Q) zum 31.03.2026 und 30.09.2025: In den ausgewerteten SEC-Filings von Mercury General findet sich kein wesentlicher KI-Bezug. „Artificial intelligence“ taucht ausschließlich in zwei Kontexten auf — erstens als generische Cybersecurity-Floskel im Risikoteil des 10-K 2025 („the use of artificial intelligence, including by computer hackers“), also als eine von vielen Angriffstechniken gegen die IT-Systeme, und zweitens in der Biografie des Chief Technology Officer, der „deep expertise in technology, data, and artificial intelligence“ mitbringt. Keine der Fundstellen belegt eine KI-Umsatzquelle (kein „verkauft“), einen dokumentierten operativen KI-Einsatz im Geschäftsmodell (kein „nutzt“) oder ein konkretes, aufs eigene Modell bezogenes KI-Geschäftsrisiko (kein „bedroht“ — die Cybersecurity-Nennung bleibt Boilerplate). Ein tech-naher Nebenaspekt (Technologie-Tochter Mercury Shanghai, ein 2023 eingestellter Chief Data & Analytics Officer) deutet auf Daten-/Analytics-Kompetenz hin, wird in den Filings aber nicht als KI-Einsatz beschrieben. Das erwähnte Risiko rund um „driverless cars and usage-based insurance“ betrifft die Autonomie/Telematik des Kfz-Geschäfts, nicht KI im Sinne des Kriterienkatalogs. Nach der Vorrang-Regel (verkauft > bedroht > nutzt > neutral) bleibt es damit belegbar bei „neutral“.
View the full file — quotes, sources, reviewed filings
„These risks include the risk of a cyber incident, which has generally increased as the number, intensity and sophistication of attempted attacks by threat actors have increased globally, especially given the use of more advanced hacking tools and techniques and the use of artificial intelligence, including by computer hackers, state-sponsored actors, information service interruptions and cyber terrorists, opportunistic hackers and hacktivists."
Zu diesen Risiken gehört die Gefahr eines Cyber-Vorfalls, die weltweit generell zugenommen hat, da Zahl, Intensität und Raffinesse der Angriffsversuche gestiegen sind — insbesondere angesichts fortschrittlicherer Hacking-Werkzeuge und -Techniken sowie des Einsatzes künstlicher Intelligenz, auch durch Computer-Hacker, staatlich gesteuerte Akteure und Cyber-Terroristen.
„Mr. Pang has over 20 years' experience in the technology industry. He has served in Chief Technology Officer and Chief Data Officer roles in several public companies and has deep expertise in technology, data, and artificial intelligence."
Herr Pang verfügt über mehr als 20 Jahre Erfahrung in der Technologiebranche. Er war bei mehreren börsennotierten Unternehmen als Chief Technology Officer und Chief Data Officer tätig und besitzt tiefgehende Expertise in Technologie, Daten und künstlicher Intelligenz.
Filings Reviewed: 10-K 2026-02-17 · 10-K 2025-02-11 · 10-Q 2026-05-05 · 10-Q 2025-11-04
Rated on July 17, 2026 · How the Rating Is Built
Highlighted are things our editorial team noticed: green = stands out as strong, red = deserves a closer look. No single metric is a verdict on its own — always read it in context.
Quarterly Figures
| Quarter | EPS (Earnings Per Share) | EPS YoY (%) | Sales ($M) | Sales YoY (%) | Net Margin (%) | OCF ($M) | FCF ($M) |
|---|---|---|---|---|---|---|---|
| 2024: Q4 | 1.82 | -47.20 | 1,366 | -0.60 | 7.40 | 248 | 236 |
| 2025: Q1 | -1.96 | -247.40 | 1,394 | 9.40 | -7.80 | -69 | -82 |
| 2025: Q2 | 3.01 | 166.00 | 1,478 | 13.20 | 11.30 | 372 | 357 |
| 2025: Q3 | 5.06 | 21.40 | 1,585 | 3.60 | 17.70 | 496 | 480 |
| 2025: Q4 | 3.66 | 100.40 | 1,536 | 12.40 | 13.20 | 288 | 274 |
| 2026: Q1 | 3.44 | – | 1,540 | 10.50 | 12.40 | 326 | 309 |
- EPS (Earnings Per Share):
- Quarterly profit divided by the total share count — how much of the profit works out to a single share.
- YoY (Year over Year):
- Change versus the same quarter a year ago — this is how you compare without seasonal distortion (e.g. the holiday shopping season).
- Sales:
- All revenue for the quarter, before any costs are deducted — the top line of the income statement.
- Net Margin:
- What percentage of sales is left over as profit in the end. Negative means the company is posting a loss.
- OCF (Operating Cash Flow):
- The cash that actually flows into the till from the core business during the quarter — harder to dress up than book profit.
- FCF (Free Cash Flow):
- Operating cash flow minus capital expenditures — the money that's genuinely free to use, say for paying down debt, buybacks, or dividends.
Assessment: Opportunities & Risks
$6.58 billion in investments (82.5% fixed maturity), $1.32 billion in cash, $2.42 billion in equity (up 24 percent year over year, book value about $43.60 per share), debt of only 19.2 percent of total capital and $1,087 million in operating cash flow (12/31/2025) — a capital cushion that carried the largest fire loss in company history with ease.
The combined ratio turned from 109.5 percent (2022, record loss) through 105.8 percent (2023) to 96.3–96.5 percent (2024/2025); the pure loss ratio ex-catastrophes was 64.0 percent in 2025. Approved rate increases (auto +22.5 percent, homeowners repeatedly) made the core business clearly profitable again (10-K FY 2025).
$2.2 billion of gross losses became roughly $380 million net thanks to reinsurance and subrogation — risk management that held. But the reinsurance airbag (roughly $1.29 billion) was fully deployed in 2025 and reloaded for about $101 million of reinstatement premium; a second major fire soon after would meet higher retentions (10-K FY 2025, Item 7 / Note 12).
Roughly 86 percent of auto premiums in a single, especially catastrophe- and regulation-prone state; results hang on California DOI approvals. The new "Sustainable Insurance Strategy" allows adequate prices only in exchange for the requirement to hold at least 85 percent of market share in wildfire zones (from July 2026) — pricing freedom traded for more fire risk.
A trailing P/E around 10, price-to-book about 2.2 and a return on equity near 25 percent sound cheap — but the 2025 record profit includes $131 million of realized investment gains and a $538 million subrogation that is still pending. On top, the Joseph family controls more than 50 percent, so minority shareholders can be outvoted (data as of July 17, 2026; 10-K FY 2025, Item 1A).
Mercury General is a rock-solidly financed, family-controlled auto and property insurer that passed a real stress test in 2025: $2.2 billion of wildfire gross losses became roughly $380 million net thanks to reinsurance and subrogation, and the year ended with a record net income of $541.1 million and a combined ratio below 100 percent. But the record character hangs on a $538 million subrogation estimate against Southern California Edison, the reinsurance cover was spent for 2025, and the whole bet sits in a single fire-prone state. At a trailing P/E around 10 and a return on equity near 25 percent, the market is paying quality at a reasonable price — including those four question marks. Not investment advice.
- MCY reached our research list via the Joshua growth scanner (rank 18 of 74, data as of July 17, 2026); the confluence of trend hits (Stan Weinstein stage 2, Power Trend) and value/quality hits (P/E ranking, Buffett owner-earnings, QARP) is rare for a stock up about 66 percent over twelve months.
- Insurer metrics follow their own logic: what matters is the combined ratio (below 100 percent = an underwriting profit), book value and the investment result, not the classic P/E alone. The reported 2025 record profit includes one-off effects ($531 million of catastrophe losses, $586 million of subrogation, $131 million of realized gains).
- Price and valuation figures are dated to July 17, 2026 (price about $97, market value roughly $5.4 billion); analyses are evergreen, daily prices are not a buy argument. Mercury's fiscal year ends December 31.
About the Company
Mercury General Corporation befasst sich gemeinsam mit ihren Tochtergesellschaften mit dem Abschluss von Kfz-Versicherungen für Privatpersonen in den USA. Sie zeichnet außerdem Hausrat-, Gewerbe-Kfz-, Gewerbeimmobilien-, Maschinenschutz- und Umbrella-Versicherungsprodukte.
| Employees | 4,380 |
|---|---|
| Headquarters | Los Angeles, CA |
| Website | mercuryinsurance.com |
| IPO Date | 26. Mar 1990 |
| Next Earnings | 4. Aug 2026 |
Management
| Name | Title | Birth Year |
|---|---|---|
| George Victor Joseph | Executive Chairman of the Board | 1922 |
| Gabriel Tirador | CEO & Director | 1965 |
| Victor George Joseph | President, COO & Director | 1987 |
| Theodore Robert Stalick CPA | Senior VP & CFO | 1963 |
| Wilson Pang B.E. | VP & CTO | 1977 |
| Christopher Wadewitz Graves | VP & Chief Investment Officer | 1966 |
| Erik Dahl Thompson | VP & Chief Marketing Officer | 1969 |
| Nick Colby | VP & Chief Sales Officer | 1985 |
| Jenny D. Chan | VP & Chief Human Resources Officer | 1974 |
| Brandt N. Minnich | VP & Chief Sales Development Officer | 1967 |
Executives per the latest required filings; titles kept in their original language. Source: fundamental data.
Chart
Interactive price chart (TradingView).
Data as of: July 20, 2026 · Source: fundamental data & SEC filings (annual and quarterly reports, 10-K/10-Q)
Note: pure fact-based analysis, not investment advice and not a solicitation to buy or sell. All figures without guarantee.