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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

AM Best Revises Outlooks to Negative for Mercury General Corporation and Its Subsidiaries

AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a” (Excellent) for the members of Mercury Casualty Group (Mercury). Concurrently, AM Best has revised the outlook to negative from stable and affirmed the Long-Term ICR of “bbb” (Good) of the organization’s publicly traded ultimate parent, Mercury General Corporation (MGC) (Los Angeles, CA) [NYSE: MCY]. AM Best has also revised the outlook to negative from stable and affirmed the Long-Term Issue Credit Rating of “bbb” (Good) of MGC’s $375 million, 4.4% senior unsecured notes, due 2027. (Please see below for a detailed list of Mercury’s member companies.)

These Credit Ratings (ratings) reflect Mercury’s balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.

The outlooks have been revised to negative due to uncertainty of Mercury’s net ultimate losses as well as uncertainty surrounding future reinsurance structure and costs stemming from the recent California wildfires that started on Jan. 7, 2025. Mercury has exposure to the Palisades and Eaton fires, with gross catastrophe losses estimated at $1.6 billion to $2.0 billion before reinsurance, subrogation, FAIR Plan assessments and recoupment of FAIR Plan assessments. Mercury’s reinsurance program provides for catastrophe reinsurance limits of $1.29 billion on a per occurrence with a retention of $150 million and reinstatement premium of $101 million.

The rating affirmations reflect AM Best’s expectation that Mercury’s capital position will withstand the impact of the wildfires after the company makes the full determination of its ultimate losses.

The outlooks are expected to remain negative until such time that AM Best can with certainty establish the impact of the ultimate net losses from the California wildfires on Mercury’s capital, profitability, and future reinsurance costs.

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed with the outlooks revised to negative from stable for the following members of Mercury Casualty Group:

  • Mercury Casualty Company
  • Mercury Insurance Company
  • California Automobile Insurance Company
  • California General Underwriters Insurance Company, Inc.
  • Mercury Indemnity Company of Georgia
  • Mercury Insurance Company of Georgia
  • Mercury Insurance Company of Illinois
  • Mercury Indemnity Company of America
  • Orion Indemnity Company
  • American Mercury Insurance Company
  • American Mercury Lloyds Insurance Company
  • Mercury County Mutual Insurance Company

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2025 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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