NYSE$MCY
Mercury General Corporation · Q1 2023 earnings
Q1 2023 earnings · · Investor relations
Briefing
Mercury General reported a net loss for Q1 2023, impacted by catastrophe losses and inflationary pressures, but saw higher net investment income.
Mercury General Corporation reported a net loss of $45.3 million for the first quarter of 2023, compared to a net loss of $196.9 million for the same period in 2022. The company's combined ratio was 115.8%, and catastrophe losses, net of reinsurance, amounted to $98 million. Net investment income increased to $52 million.
- Net loss was $(45.3) million, or $(0.82) per diluted share.
- Operating loss was $(84) million, or $(1.52) per diluted share.
- Net premiums earned increased by 4.4% to $1,004.7 million.
- Combined ratio was 115.8%, driven by catastrophe losses and inflationary pressures.
Headline financials
Revenue & EPS history
Mercury General · Revenue · Quarterly
$1.11B
Revenue by segment
Mercury General · $1.06B total across 3 segments · Q1 2023
- Net premiums earned$1B+4.4%95.0%
- Net investment income$52M+68.1%4.9%
- Other$894K-66.2%0.1%
Forward guidance
Mercury General is implementing rate and non-rate actions to improve underwriting results, though these increases take time to earn in.
Tailwinds
- Rate increases implemented in Q1 2023 for California Personal Auto (6.9%), California Commercial Auto (13.0%), Personal Auto Outside of California (3.2%), and Homeowners Outside of California (8.1%).
- Additional rate increases effective or scheduled for Q2 2023 for California Personal Auto (6.99%), California Homeowners (12.6%), California Commercial Auto (14.9%), Personal Auto Outside of California (4.0%), and Homeowners Outside of California (1.6%).
- Favorable development of approximately $15 million on prior accident years' loss and loss adjustment expense reserves, primarily attributable to lower than estimated losses and loss adjustment expenses in the homeowners line of insurance business.
- Higher net investment income before and after income taxes for the three months ended March 31, 2023 compared to the corresponding period in 2022 resulted largely from higher average yield combined with higher average invested assets.
- Average annual yield on investments after income taxes for the three months ended March 31, 2023 increased compared to the corresponding period in 2022, 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 market interest rates, as well as higher yields on investments based on floating interest rates.
Headwinds
- Net loss of $(45.3) million, or $(0.82) per diluted share.
- Operating loss of $(84) million, or $(1.52) per diluted share.
- Combined ratio of 115.8%.
- Catastrophe losses, net of reinsurance, of $98 million, primarily from winter storms and rainstorms in California, Texas, and Oklahoma.
- Unfavorable development of approximately $53 million on prior accident years' loss and loss adjustment expense reserves for the three months ended March 31, 2022, primarily attributable to higher than estimated losses and loss adjustment expenses in the automobile and commercial property lines of insurance business.
Historical earnings impact
How earnings announcements have historically affected this stock's price.
Avg. return before/after earnings
Based on 20 quarterly earnings reports · overlaid with Q1 2023
-0.1%
Avg return
Earnings day
+1.6%
Avg return
5 days after
+2.0%
Avg return
30 days after
46%
31 / 68 earnings
Positive
+23.8%
Q3 2023
Best reaction
-14.2%
Q2 2022
Worst reaction
| Quarter | Report date | Reaction (Day 0) | +5 days | +30 days |
|---|---|---|---|---|
| Q1 2026 | -2.1% | +1.3% | +4.0% | |
| Q4 2025 | -9.2% | -12.9% | -9.7% | |
| Q3 2025 | +2.1% | +7.8% | +12.8% | |
| Q1 2025 | -4.0% | +2.6% | +11.0% | |
| Q4 2024 | +9.3% | +9.4% | +14.3% | |
| Q3 2024 | +5.9% | -3.3% | +16.2% | |
| Q2 2024 | +2.3% | +0.9% | +13.1% | |
| Q1 2024 | +2.2% | +3.0% | +5.4% | |
| Q4 2023 | +6.2% | +25.6% | +17.6% | |
| Q3 2023 | +23.8% | +20.1% | +22.8% | |
| Q2 2023 | -5.3% | -5.1% | -11.1% | |
| Q1 2023 | -3.7% | -2.8% | -2.3% | |
| Q4 2022 | -6.2% | -0.4% | -14.7% | |
| Q3 2022 | +14.0% | +26.8% | +24.0% | |
| Q2 2022 | -14.2% | -21.2% | -21.3% | |
| Q1 2022 | +3.4% | +1.3% | -3.8% | |
| Q4 2021 | +1.9% | +4.9% | +0.9% | |
| Q3 2021 | +2.0% | +0.1% | -6.3% | |
| Q2 2021 | -3.1% | -1.8% | -3.9% | |
| Q1 2021 | +3.8% | +4.8% | -2.3% | |
| Q4 2020 | +1.6% | +2.8% | +9.6% | |
| Q3 2020 | -0.3% | +1.2% | +9.5% | |
| Q2 2020 | +0.0% | +6.2% | +6.3% | |
| Q1 2020 | -6.4% | -9.7% | +7.2% | |
| Q4 2019 | +5.6% | +5.8% | -20.3% | |
| Q3 2019 | -10.3% | -8.9% | -7.3% | |
| Q2 2019 | -7.8% | -9.6% | -15.6% | |
| Q1 2019 | +1.3% | +6.0% | +7.3% | |
| Q4 2018 | -4.7% | +0.7% | -5.7% | |
| Q3 2018 | +20.9% | +18.6% | +9.1% | |
| Q2 2018 | +13.6% | +15.4% | +19.9% | |
| Q1 2018 | -8.3% | -8.3% | -2.4% | |
| Q4 2017 | -13.0% | -12.0% | -5.3% | |
| Q3 2017 | -0.1% | -1.0% | -2.4% | |
| Q2 2017 | +5.7% | +6.1% | +1.8% | |
| Q1 2017 | -7.0% | -7.9% | -8.9% | |
| Q4 2016 | -6.3% | -9.3% | -6.4% | |
| Q3 2016 | +11.2% | +8.7% | +15.8% | |
| Q2 2016 | -3.9% | -4.9% | -1.9% | |
| Q1 2016 | -1.0% | — | — | |
| Q4 2015 | +7.5% | — | — | |
| Q3 2015 | -3.5% | — | — | |
| Q2 2015 | -0.9% | — | — | |
| Q1 2015 | -3.5% | — | — | |
| Q4 2014 | -11.8% | — | — | |
| Q3 2014 | +3.9% | — | — | |
| Q2 2014 | +4.4% | — | — | |
| Q1 2014 | +0.8% | — | — | |
| Q4 2013 | -5.2% | — | — | |
| Q3 2013 | -4.6% | — | — | |
| Q2 2013 | -3.2% | — | — | |
| Q1 2013 | +7.7% | — | — | |
| Q4 2012 | -6.4% | — | — | |
| Q3 2012 | +1.3% | — | — | |
| Q2 2012 | -11.3% | — | — | |
| Q1 2012 | +0.0% | — | — | |
| Q4 2011 | -1.2% | — | — | |
| Q3 2011 | +4.2% | — | — | |
| Q2 2011 | -2.8% | — | — | |
| Q1 2010 | -1.4% | — | — | |
| Q1 2011 | +1.0% | — | — | |
| Q4 2008 | -0.1% | — | — | |
| Q4 2010 | -0.1% | — | — | |
| Q3 2010 | +0.1% | — | — | |
| Q3 2009 | +0.1% | — | — | |
| Q2 2009 | -0.4% | — | — | |
| Q2 2010 | -0.4% | — | — | |
| Q4 2009 | -0.4% | — | — |
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