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AM Best Affirms Credit Ratings of Mercury General Corporation and Its Subsidiaries

AM Best has affirmed 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 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 also has affirmed the Long-Term Issue Credit Rating of “bbb” (Good) of MGC’s $375 million, 4.4% senior unsecured notes, due 2027. The outlook of these Credit Ratings (ratings) is stable. (Please see below for a detailed list of Mercury’s member companies.)

The ratings of Mercury reflect its 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 very strong balance sheet strength assessment reflects Mercury’s strongest level of risk-adjusted capitalization, as measured by Best’s Capital Adequacy Ratio (BCAR) and generally risk-balanced investment portfolio, which benefited from the higher interest rate environment in 2023. Financial flexibility is provided through the group’s publicly traded parent MGC. Mercury’s operating performance in the past two years has deteriorated due to weakened underwriting performance; this resulted from increased claim frequency and severity caused largely by catastrophe losses incurred in its geographic footprint. These were exacerbated by Mercury’s business concentration in California, where the regulatory environment has been challenging in recent years, particularly with respect to the company’s and other insurers’ difficulty in achieving rate increases in the private passenger auto (PPA) line of business, which comprises most of Mercury’s underwritten portfolio. As of Jan. 31, 2024, Mercury has received a significant rate increase of 20.7% for California PPA, effective Feb. 25, 2024. The increase is in addition to two rate increases of 6.99% each, already approved in 2023.

AM Best notes that detailed strategic initiatives Mercury has implemented to restore underwriting profitability, which include rate and non-rate actions, should strengthen its prospective underwriting performance. AM Best expects that the group’s earnings to gradually improve in 2024.

The FSR of A (Excellent) and the Long-Term ICRs of “a” (Excellent) have been affirmed 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 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

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.


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