Mercury General Q2 Earnings Beat on Strong Net Investment Income

Mercury General Corporation MCY reported second-quarter 2025 operating income of $2.67 per share, in contrast to the Zacks Consensus Estimate of a loss of 10 cents. The bottom line more than doubled year over year.The quarterly results of MCY were aided by higher net premiums earned, a rise in average invested assets and cash, and narrower catastrophe losses, offset by higher expenses.Operational Update of MCY          Total operating revenues in the quarter under review were $1.4 billion, which improved 11.7% year over year. This improvement was driven by higher net premiums earned, net investment income, and other income. Moreover, the top line beat the consensus mark by 0.3%.Net premiums earned climbed 10.6% year over year to $1.4 billion.Mercury General Corporation Price, Consensus and EPS Surprise Mercury General Corporation price-consensus-eps-surprise-chart | Mercury General Corporation QuoteNet investment income, before income taxes, increased 14.2% year over year to $78.8 million. The growth resulted largely from higher average yield combined with higher average invested assets and cash.Total expenses of MCY rose 3.3% year over year to $1.3 billion, primarily due to higher losses and loss adjustment expenses, policy acquisition costs, and other operating expenses. Catastrophe losses net of reinsurance were $17 million, narrower than a loss of $125 million incurred in the year-ago quarter. The catastrophe losses reduced from the subrogation recorded on the Palisades and Eaton wildfires.The combined ratio — a measure of underwriting profitability — improved 640 basis points (bps) year over year to 92.5. The loss ratio improved 700 bps to 68.8, while the expense ratio deteriorated 60 bps to 23.7.Financial Update of MCYMercury General exited the second quarter 2025 with total assets of $9.1 billion, which was 9.3% above the level at the end of December 2024. As of June 30, 2025, MCY reported a solid cash balance of $1.1 billion, reflecting an increase of 56% from the 2024-end level.Notes payable of $574.3 million inched up 0.03% from the 2024-end level. Debt-to-total capitalization as of June 30, 2025, improved 20 bps to 22.6% from the end of 2024.Shareholder equity was $1.9 billion as of June 30, 2025, up 1.2% from 2024-end.As of June 30, 2025, book value per share was $35.56, up 1.2% from the 2024-end.Mercury General’s Dividend UpdateThe board of directors of Mercury General declared a quarterly dividend of 31.75 cents per share. The dividend will be paid on Sept. 25, 2025, to shareholders of record at the close of business as of Sept. 11, 2025.MCY Zacks RankMCY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Performance of Other Property and Casualty InsurersCincinnati Financial Corporation CINF reported second-quarter 2025 operating income of $1.97 per share, which surpassed the Zacks Consensus Estimate by 41.7%. The bottom line increased 52.7% year over year. Total operating revenues in the quarter under review were $2.8 billion, which improved 15.3% year over year. However, the top line missed the consensus mark by 0.1%. Net written premiums climbed 11.1% year over year to $2.7 billion.Investment income, net of expenses, increased 17.8% year over year to $285 million and our estimate of $269.6 million. The Zacks Consensus Estimate was pegged at $279 million. In its property & casualty insurance business, CINF witnessed an underwriting income of $128 million, which increased 265.7% from the year-ago period. Our estimate was pegged at $69.4 million.Chubb Limited CB reported second-quarter 2025 core operating income of $6.14 per share, which outpaced the Zacks Consensus Estimate by 4.2%. The bottom line increased 14.1% year over year. Net premiums written improved 6.3% year over year to $14.2 billion in the quarter, which is in line with the Zacks Consensus Estimate. Our estimate was pegged at $14 billion. Net investment income was $1.5 billion, up 6.8 % year over year. The Zacks Consensus Estimate was pegged at $1.8 billion, while our estimate for the same was $1.9 billion. Revenues of $14.8 million missed the Zacks Consensus Estimate by a whisker but improved 6.9% year over year.Kinsale Capital Group KNSL delivered second-quarter 2025 net operating earnings of $4.78 per share, which outpaced the Zacks Consensus Estimate by 8.4%. The bottom line increased 27.5% year over year. Operating revenues increased 22.2% year over year to $470 million. Revenues beat the Zacks Consensus Estimate of $434 million. Net investment income increased 29.6% year over year to $46.5 million in the quarter. Our estimate was $46.8 million. Gross written premiums of $555.5 million rose 4.9% year over year. Our estimate was $623.1 million. Net written premiums climbed 6.6% year over year to $458.7 million in the quarter. Our estimate was pegged at $473.5 million.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Chubb Limited (CB): Free Stock Analysis Report Cincinnati Financial Corporation (CINF): Free Stock Analysis Report Mercury General Corporation (MCY): Free Stock Analysis Report Kinsale Capital Group, Inc. (KNSL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks