AM Best has reaffirmed the Financial Strength Rating (FSR) of A (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICRs) of “a” (Excellent) for the members of Mercury Casualty Group (Mercury). Concurrently, AM Best has also reaffirmed the Long-Term ICR of “bbb” (Good) for the publicly traded ultimate parent, Mercury General Corporation (MGC) (Los Angeles, CA) [NYSE: MCY]. Furthermore, AM Best has affirmed the Long-Term Issue Credit Rating of “bbb” (Good) for MGC’s $375 million, 4.4% senior unsecured notes, due 2027. The outlook for these Credit Ratings (ratings) remains stable.
The ratings of Mercury reflect its strong balance sheet strength, characterized by very strong risk-adjusted capitalization as measured by Best’s Capital Adequacy Ratio (BCAR), and a generally well-balanced investment portfolio. Financial flexibility is enhanced through the group’s publicly traded parent, MGC. Despite facing challenges in underwriting performance over the past two years, primarily due to increased claim frequency and severity exacerbated by catastrophe losses, Mercury has implemented strategic initiatives to restore profitability, including rate adjustments. AM Best anticipates gradual improvement in the group’s earnings in 2024.
The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been reaffirmed with stable outlooks 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 published on AM Best’s website. For all rating information and disclosures, including the office responsible for issuing each rating, please refer to AM Best’s Recent Rating Activity web page. For additional details 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, with operations in over 100 countries and regional offices worldwide.
