LOS ANGELES , Nov. 3, 2026 /PRNewswire/ -- Mercury General Corporation (NYSE: MCY ) reported today for the third quarter of 2026: Consolidated Highlights Three Months Ended September 30, Change Nine Months Ended September 30, Change 2026 2025 $ % 2026 2025 $ % (000's except per-share amounts and ratios) Net premiums earned (2) $ 1,545,368 $ 1,410,400 $ 134,968 9.6 $ 4,495,548 $ 4,060,208 $ 435,340 10.7 Net premiums written (1) (2) $ 1,636,133 $ 1,498,861 $ 137,272 9.2 $ 4,745,297 $ 4,294,048 $ 451,249 10.5 Direct premiums written (1) $ 1,697,598 $ 1,561,739 $ 135,859 8.7 $ 4,893,922 $ 4,492,167 $ 401,755 8.9 Net realized investment (losses) gains, net of tax (3) $ (206,938) $ 66,716 $(273,654) (410.2) $ (142,182) $ 103,688 $ (245,870) (237.1) Net (loss) income $ (13,685) $ 280,403 $(294,088) (104.9) $ 440,237 $ 338,547 $ 101,690 30.0 Net (loss) income per diluted share $ (0.25) $ 5.06 $ (5.31) (104.9) $ 7.95 $ 6.11 $ 1.84 30.1 Operating income (1) $ 193,253 $ 213,687 $ (20,434) (9.6) $ 582,419 $ 234,859 $ 347,560 148.0 Operating income per diluted share (1) $ 3.49 $ 3.86 $ (0.37) (9.6) $ 10.52 $ 4.24 $ 6.28 148.1 Catastrophe losses net of reinsurance (4) $ 23,000 $ 29,000 $ (6,000) (20.7) $ 191,000 $ 489,000 $ (298,000) (60.9) Combined ratio (5) 90.2 % 87.0 % — 3.2 pts 89.8 % 99.0 % — (9.2) pts (1) These measures are not based on U.S. generally accepted accounting principles ("GAAP"), are defined in "Information Regarding GAAP and Non-GAAP Measures" and are reconciled to the most directly comparable GAAP measures in "Supplemental Schedules." (2) Both net premiums earned and net premiums written for the nine months ended September 30, 2025 include $101 million of increased ceded premiums due to the reinstatement premiums paid and recorded in the first half of 2025 to reinstate the fully exhausted reinsurance coverage layers of its catastrophe reinsurance treaty ended June 30, 2025 following the Palisades and Eaton wildfires in January 2025. (3) Net realized investment (losses) gains before tax was $(262) million and $84 million for the three months ended September 30, 2026 and 2025, respectively, and $(180) million and $131 million for the nine months ended September 30, 2026 and 2025, respectively. Net realized investment losses for the three and nine months ended September 30, 2026 resulted largely from the decreases in fair value of the Company's investments during the third quarter of 2026 primarily caused by large increases in overall market interest rates. The changes in fair value of the Company's investments are recorded as part of net realized investment gains or losses in its consolidated statements of operations due to the adoption of the fair value option under GAAP. (4) The majority of 2026 catastrophe losses resulted from storms in Oklahoma and Texas and adverse reserve development on the Palisades and Eaton wildfires. The majority of 2025 catastrophe losses resulted from the Palisades and Eaton wildfires in California and storms in Texas and Oklahoma. (5) The Company experienced favorable development of approximately $58 million and $27 million on prior accident years' loss and loss adjustment expense reserves for the three months ended September 30, 2026 and 2025, respectively, and favorable development of approximately $102 million and $74 million on prior accident years' loss and loss adjustment expense reserves for the nine months ended September 30, 2026 and 2025, respectively. The year-to-date favorable development in 2026 was primarily attributable to lower than estimated losses and loss adjustment expenses in the automobile line of insurance business, partially offset by adverse development on the homeowners line of insurance business primarily related to the Palisades and Eaton wildfires. The year-to-date favorable development in 2025 was primarily attributable to lower than estimated losses and loss adjustment expenses in the automobile and homeowners lines of insurance business. Investment Results Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (000 ' s except average annual yield) Average invested assets at cost (1) $ 7,227,738 $ 6,135,816 $ 6,924,365 $ 5,840,849 Net investment income (2) (3) Before income taxes $ 93,339 $ 83,970 $ 268,738 $ 244,208 After income taxes $ 79,987 $ 70,745 $ 229,469 $ 204,616 Average annual yield on investments (2) (3) Before income taxes 4.5 % 4.6 % 4.5 % 4.7 % After income taxes 3.9 % 4.0 % 3.9 % 4.0 % (1) Fixed maturities and short-term bonds at amortized cost; equities and other short-term investments at cost. Average invested assets at cost are based on the monthly amortized cost of the invested assets excluding cash for each period. (2) Net investment income includes interest income earned on cash of approximately $12.0 million and $12.9 million ($9.5 million and $10.2 million after tax) for the three months ended September 30, 2026 and 2025, respectively, and approximately $35.1 million and $38.4 million ($27
