Business Description

Mercury General Corporation ("Mercury General") and its subsidiaries (referred to herein collectively as the "Company") are primarily engaged in writing personal automobile insurance through 12 insurance subsidiaries (referred to herein collectively as the "Insurance Companies") in 11 states, principally California. The Company also writes homeowners, commercial automobile, commercial property, mechanical protection, and umbrella insurance. The Company's insurance policies are mostly sold through independent agents who receive a commission for selling policies. The Company believes that it has thorough underwriting and claims handling processes that, together with its agent relationships, provide the Company with competitive advantages. The direct premiums written for the years ended December 31, 2025, 2024 and 2023 by state and line of insurance business were: Year Ended December 31, 2025 (Dollars in thousands) Private Passenger Automobile Homeowners Commercial Automobile Other Lines (2) Total California $ 3,082,828 $ 1,170,943 $ 299,586 $ 356,431 $ 4,909,788 82.1 % Texas 122,638 214,498 57,696 6,628 401,460 6.7 % Other states (1) 385,749 245,479 30,098 9,963 671,289 11.2 % Total $ 3,591,215 $ 1,630,920 $ 387,380 $ 373,022 $ 5,982,537 100.0 % 60.0 % 27.3 % 6.5 % 6.2 % 100.0 % Year Ended December 31, 2024 (Dollars in thousands) Private Passenger Automobile Homeowners Commercial Automobile Other Lines (2) Total California $ 2,845,294 $ 970,054 $ 280,987 $ 334,293 $ 4,430,628 80.5 % Texas 127,808 190,928 62,788 6,824 388,348 7.1 % Other states (1) 422,722 206,315 43,219 9,603 681,859 12.4 % Total $ 3,395,824 $ 1,367,297 $ 386,994 $ 350,720 $ 5,500,835 100.0 % 61.7 % 24.9 % 7.0 % 6.4 % 100.0 % Year Ended December 31, 2023 (Dollars in thousands) Private Passenger Automobile Homeowners Commercial Automobile Other Lines (2) Total California $ 2,317,678 $ 813,056 $ 246,253 $ 235,735 $ 3,612,722 79.3 % Texas 123,390 147,854 53,430 5,592 $ 330,266 7.2 % Other states (1) 400,714 158,094 46,538 10,154 615,500 13.5 % Total $ 2,841,782 $ 1,119,004 $ 346,221 $ 251,481 $ 4,558,488 100.0 % 62.4 % 24.5 % 7.6 % 5.5 % 100.0 % _____________ (1) No individual state accounted for more than 5% of total direct premiums written. (2) No individual line of insurance business accounted for more than 5% of total direct premiums written. The Company offers the following types of automobile coverage: collision, property damage, bodily injury ("BI"), comprehensive, personal injury protection ("PIP"), underinsured and uninsured motorist, and other hazards. 1 The Company offers the following types of homeowners coverage: dwelling, liability, personal property, and other coverages. The following table presents the Company's published maximum limits of coverage: Insurance type Published maximum limits of coverage Private Passenger Automobile - bodily injury (BI) $500,000 per person; $500,000 per accident (1) Private Passenger Automobile (combined policy limits) $500,000 per accident Private Passenger Automobile - property damage $250,000 per accident (1) Commercial Automobile (combined policy limits) $1,000,000 per accident Homeowner property no maximum (2) (3) Homeowner liability $1,000,000 (3) Commercial property no maximum (2) Umbrella liability $5,000,000 (4) ________ (1) The majority of the Company’s automobile policies have coverage limits that are equal to or less than $100,000 per person and $300,000 per accident for BI and $50,000 per accident for property damage. (2) The Company has a per-risk reinsurance treaty covering losses of $7.5 million in excess of $7.5 million, and facultative reinsurance coverage for losses above $15 million subject to some coverage limitations for certain commercial property policies with multiple structures. (3) The majority of the Company’s homeowners policies have liability coverage limits of $300,000 or less, a replacement value of $750,000 or less, and a total insured value of $2,000,000 or less. (4) The majority of the Company’s umbrella policies have coverage limits of $1,000,000. The commercial umbrella liability is 100% reinsured. The principal executive offices of Mercury General are located in Los Angeles, California. The home office of the Insurance Companies and the information technology center are located in Brea, California.…