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NEW YORK - Mercury General Corporation (NYSE:MCY) saw its stock price jump 16.8% in after-hours trading on Tuesday after the insurance company reported fourth quarter earnings that significantly exceeded analyst expectations.
The Los Angeles-based insurer posted adjusted earnings per share of $2.78 for the fourth quarter, handily beating the analyst consensus estimate of $1.77. Revenue also came in above expectations at $1.35 billion, compared to estimates of $1.27 billion.
Net premiums earned rose 18.1% YoY to $1.35 billion in Q4. The company’s combined ratio, a key measure of underwriting profitability, improved to 91.4% from 98.6% in the year-ago quarter.
For the full year 2024, Mercury General reported net income of $468 million, or $8.45 per diluted share, compared to $96.3 million, or $1.74 per diluted share, in 2023.
The company also declared a quarterly dividend of $0.3175 per share, payable on March 27, 2025 to shareholders of record on March 13, 2025.
Looking ahead, Mercury General said it expects a recently approved 12% rate increase for its California homeowners insurance business to take effect in March 2025. The California homeowners segment represented about 16% of the company’s total net premiums earned in 2024.
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