Guy Baron's questions to Mercury General Corp (MCY) leadership • Q4 2024
Question
Guy Baron of Springview inquired about the sustainability of the strong Q4 operating earnings, whether the California Department of Insurance now allows for adequate rate actions, and for details on the proceeds from the 2018 subrogation rights sale relative to initial recovery estimates.
Answer
CEO Gabriel Tirador responded that while Q4's 91.4% combined ratio was strong, he expects it to move closer to the company's 96% target over time. He affirmed his belief that the California DOI now understands the need for rate adequacy, citing new regulations. CFO Theodore Stalick addressed subrogation by providing context on historical utility-caused fire recoveries, which range from 55% to 70%, and noted strong interest in purchasing the rights for the recent Eaton fire, rather than detailing the 2018 sale.