Quarterly report
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Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________ FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2026 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File No. 001-12257 ______________________________ MERCURY GENERAL CORPORATION (Exact name of registrant as specified in its charter) ________________________________ California 95-2211612 (State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) 4484 Wilshire Boulevard Los Angeles,California 90010 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (323) 937-1060 _______________________________ Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered Common Stock MCY New York Stock Exchange Common Stock MCY New York Stock Exchange Texas Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in the Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ At October 29, 2026, the registrant had issued and outstanding an aggregate of 55,388,627 shares of its Common Stock.
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Table of Contents MERCURY GENERAL CORPORATION INDEX TO FORM 10-Q Page PART I - FINANCIAL INFORMATION Item 1 Financial Statements 3 Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 3 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025 4 Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2026 and 2025 5 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 6 Notes to Consolidated Financial Statements 7 Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3 Quantitative and Qualitative Disclosures about Market Risks 45 Item 4 Controls and Procedures 47 PART II - OTHER INFORMATION Item 1 Legal Proceedings 48 Item 1A Risk Factors 48 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 48 Item 3 Defaults upon Senior Securities 48 Item 4 Mine Safety Disclosures 48 Item 5 Other Information 48 Item 6 Exhibits 49 SIGNATURES 50 2
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Table of Contents PART I - FINANCIAL INFORMATION Item 1. Financial Statements MERCURY GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) September 30, 2026 December 31, 2025 (unaudited) ASSETS Investments, at fair value: Fixed maturity securities (amortized cost $6,268,600; $5,449,726) $ 6,013,700 $ 5,430,251 Equity securities (cost $897,915; $728,460) 989,325 812,787 Short-term investments (cost $226,648; $336,978) 226,672 336,992 Total investments 7,229,697 6,580,030 Cash 1,305,215 1,315,574 Receivables: Premiums 856,234 751,554 Allowance for credit losses on premiums receivable (5,400) (6,000) Premiums receivable, net of allowance for credit losses 850,834 745,554 Accrued investment income 81,382 73,004 Other 80,496 86,508 Total receivables 1,012,712 905,066 Reinsurance recoverables (net of allowance for credit losses $3; $39) 45,392 109,672 Deferred policy acquisition costs 391,878 359,724 Fixed assets (net of accumulated depreciation $392,790; $345,930) 148,538 146,880 Operating lease right-of-use assets 18,472 12,125 Deferred income taxes 87,604 30,637 Goodwill 42,796 42,796 Other intangible assets, net 6,185 6,827 Other assets 60,562 51,338 Total assets $ 10,349,051 $ 9,560,669 LIABILITIES AND SHAREHOLDERS’ EQUITY Loss and loss adjustment expense reserves $ 3,754,561 $ 3,633,338 Unearned premiums 2,505,959 2,255,935 Notes payable 569,005 574,527 Accounts payable and accrued expenses 474,649 448,703 Operating lease liabilities 17,953 12,328 Current income taxes 344 30,770 Other liabilities 221,826 187,793 Total liabilities 7,544,297 7,143,394 Commitments and contingencies Shareholders’ equity: Common stock without par value or stated value: Authorized 70,000 shares; issued and outstanding 55,389; 55,389 99,699 99,699 Retained earnings 2,705,055 2,317,576 Total shareholders’ equity 2,804,754 2,417,275 Total liabilities and shareholders’ equity $ 10,349,051 $ 9,560,669 See accompanying Notes to Consolidated Financial Statements. 3
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Table of Contents MERCURY GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Revenues: Net premiums earned $ 1,545,368 $ 1,410,400 $ 4,495,548 $ 4,060,208 Net investment income 93,339 83,970 268,738 244,208 Net realized investment (losses) gains (261,947) 84,451 (179,977) 131,251 Other 4,591 6,105 18,617 21,022 Total revenues 1,381,351 1,584,926 4,602,926 4,456,689 Expenses: Losses and loss adjustment expenses 1,016,582 882,745 2,922,813 3,043,596 Policy acquisition costs 259,312 236,164 750,142 692,765 Other operating expenses 118,165 108,518 364,970 283,996 Interest 10,168 7,181 24,893 21,562 Total expenses 1,404,227 1,234,608 4,062,818 4,041,919 (Loss) income before income taxes (22,876) 350,318 540,108 414,770 Income tax (benefit) expense (9,191) 69,915 99,871 76,223 Net (loss) income $ (13,685) $ 280,403 $ 440,237 $ 338,547 Net (loss) income per share: Basic $ (0.25) $ 5.06 $ 7.95 $ 6.11 Diluted $ (0.25) $ 5.06 $ 7.95 $ 6.11 Weighted average shares outstanding: Basic 55,389 55,389 55,389 55,389 Diluted 55,389 55,389 55,389 55,389 See accompanying Notes to Consolidated Financial Statements. 4
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Table of Contents MERCURY GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (in thousands) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 Common stock, beginning of period $ 99,699 $ 99,699 $ 99,699 $ 99,699 Common stock, end of period 99,699 99,699 99,699 99,699 Retained earnings, beginning of period 2,736,326 1,869,798 2,317,576 1,846,825 Net (loss) income (13,685) 280,403 440,237 338,547 Dividends paid to shareholders (17,586) (17,586) (52,758) (52,757) Retained earnings, end of period 2,705,055 2,132,615 2,705,055 2,132,615 Total shareholders’ equity, end of period $ 2,804,754 $ 2,232,314 $ 2,804,754 $ 2,232,314 See accompanying Notes to Consolidated Financial Statements. 5
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Table of Contents MERCURY GENERAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Nine Months Ended September 30, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 440,237 $ 338,547 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 61,354 53,720 Net realized investment losses (gains) 179,977 (131,251) Net gains on sales of fixed assets — (2,690) Loss on early extinguishment of debt 473 — Increase in premiums receivable (105,280) (81,435) Decrease (increase) in reinsurance recoverables 64,280 (147,156) Changes in current and deferred income taxes (87,393) 79,095 Increase in deferred policy acquisition costs (32,154) (27,554) Increase in loss and loss adjustment expense reserves 121,223 443,941 Increase in unearned premiums 250,024 233,701 Increase in accounts payable and accrued expenses 25,149 6,465 Other, net 12,795 33,932 Net cash provided by operating activities 930,685 799,315 CASH FLOWS FROM INVESTING ACTIVITIES Fixed maturity securities available for sale in nature: Purchases (2,073,318) (1,318,484) Sales 526,037 421,353 Calls or maturities 703,754 669,936 Equity securities available for sale in nature: Purchases (1,725,565) (1,452,843) Sales 1,601,307 1,681,568 Changes in securities payable and receivable 8,897 (19,837) Decrease (increase) in short-term investments 110,330 (189,066) Purchases of fixed assets (47,721) (44,416) Sales of fixed assets — 34,153 Other, net 15,085 4,710 Net cash used in investing activities (881,194) (212,926) CASH FLOWS FROM FINANCING ACTIVITIES Net proceeds from issuance of senior notes 518,877 — Repayment of senior notes (375,199) — Paydown of principal on credit facility (150,000) — Dividends paid to shareholders (52,758) (52,757) Payments on finance lease obligations (770) (1,314) Net cash used in financing activities (59,850) (54,071) Net (decrease) increase in cash (10,359) 532,318 Cash: Beginning of the year 1,315,574 720,257 End of period $ 1,305,215 $ 1,252,575 SUPPLEMENTAL CASH FLOW DISCLOSURE Interest paid $ 19,530 $ 25,362 Income taxes paid (refunded), net U.S. federal 186,000 (3,256) U.S. state and local California 679 67 Other 564 304 Foreign 21 8 Total income taxes paid (refunded), net $ 187,264 $ (2,877) See accompanying Notes to Consolidated Financial Statements.
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Table of Contents MERCURY GENERAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. General Consolidation and Basis of Presentation The interim consolidated financial statements include the accounts of Mercury General Corporation and its subsidiaries (referred to herein collectively as the “Company”). For the list of the Company’s subsidiaries, see Note 1. Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. In addition, the certificate of incorporation for Mercury Toronto Development Centre, Ltd. ("MTDC"), the Company's latest subsidiary, became effective in September 2026. MTDC, located in Toronto, Canada, will provide various technology support to the Company. As of September 30, 2026, MTDC did not have any assets or liabilities. These interim financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”), which differ in some respects from those filed in reports to insurance regulatory authorities. The financial data of the Company included herein are unaudited. In the opinion of management, all material adjustments of a normal recurring nature have been made to present fairly the Company’s financial position at September 30, 2026 and the results of operations and cash flows for the periods presented. All intercompany transactions and balances have been eliminated. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted from the accompanying interim consolidated financial statements and related notes. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for more complete descriptions and discussions. Operating results and cash flows for the nine months ended September 30, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. Certain prior period amounts have been reclassified to conform to the current period presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. These estimates require the Company to apply complex assumptions and judgments, and often the Company must make estimates about the effects of matters that are inherently uncertain and will likely change in subsequent periods. The most significant assumptions in the preparation of these consolidated financial statements relate to reserves for losses and loss adjustment expenses ("LAE"). Actual results could differ from those estimates. See Note 1. Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Earnings (Loss) per Share There were no potentially dilutive securities with anti-dilutive effect for the three and nine months ended September 30, 2026 and 2025. Dividends per Share The Company declared and paid a dividend per share of $0.3175 during each of the three-month periods ended September 30, 2026 and 2025, and dividends per share of $0.9525 during each of the nine-month periods ended September 30, 2026 and 2025. Deferred Policy Acquisition Costs Deferred policy acquisition costs consist of commissions paid to outside agents, premium taxes, salaries, and certain other underwriting costs that are incremental or directly related to the successful acquisition of new and renewal insurance contracts and are amortized over the life of the related policy in proportion to premiums earned. Deferred policy acquisition costs are limited to the amount that will remain after deducting from unearned premiums and anticipated investment income, the estimated losses and loss adjustment expenses, and the servicing costs that will be incurred as premiums are earned. The Company’s deferred policy acquisition costs are further limited by excluding those costs not directly related to the successful acquisition of insurance contracts. Deferred policy acquisition cost amortization was $259.3 million and $236.2 million for the three months ended September 30, 2026 and 2025, respectively, and $750.1 million and $692.8 million for the nine months ended September 30, 2026 and 2025, respectively. The Company does not defer advertising expenditures but expenses them as 7
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Table of Contents incurred. The Company recorded net advertising expense of approximately $10.3 million and $11.5 million for the three months ended September 30, 2026 and 2025, respectively, and $36.7 million and $24.4 million for the nine months ended September 30, 2026 and 2025, respectively. Reinsurance Unearned premiums and loss and loss adjustment expense reserves are stated in the accompanying consolidated financial statements before deductions for ceded reinsurance. Unearned premiums and loss and loss adjustment expense reserves that are ceded to reinsurers are carried in other assets and reinsurance recoverables, respectively, in the Company's consolidated balance sheets. Earned premiums and losses and loss adjustment expenses are stated net of deductions for ceded reinsurance. The Company is the assuming reinsurer under a Catastrophe Portfolio Participation Reinsurance Contract (the "Contract") effective through December 31, 2028. The Company reimburses up to $30 million in losses for a proportional share of a portfolio of catastrophe losses under the Contract, to the extent the actual loss ratio exceeds the threshold loss ratio of 73.5%. If the actual loss ratio is less than the threshold loss ratio, the Company is eligible to receive a certain portion of the underwriting profit. The Company is the assuming reinsurer under a Property Quota Share Reinsurance Contract ("Quota Share Contract") effective through December 31, 2026 and reimburses up to approximately $60 million in annual losses for a proportional share of losses based on the premiums ceded to the Company under the Quota Share Contract. The Company is the assuming reinsurer under a Catastrophe Quota Share Reinsurance Agreement ("Quota Share Agreement") effective through December 31, 2026. The Company reimburses up to approximately $12 million in annual losses for a proportional share of losses based on the premiums ceded to the Company under the Quota Share Agreement. The Company is the ceding party to a Catastrophe Reinsurance Treaty (the "Treaty") covering a wide range of perils that is effective through June 30, 2027. The Treaty ending June 30, 2027 provides $2,790 million of coverage on a per occurrence basis after covered catastrophe losses exceed the $200 million Company retention limit. The Treaty ending June 30, 2027 specifically excludes coverage for any Florida business and for California earthquake losses on fixed property policies, such as homeowners, but does cover losses from fires following an earthquake. The Treaty ending June 30, 2027 provides for one full reinstatement of coverage limits with certain exceptions. The effect of reinsurance on property and casualty premiums written and earned was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (Amounts in thousands) Premiums Written Direct $ 1,691,407 $ 1,554,908 $ 4,874,308 $ 4,470,544 Ceded (61,958) (63,467) (187,107) (224,202) Assumed 494 589 38,482 26,084 Net $ 1,629,943 $ 1,492,030 $ 4,725,683 $ 4,272,426 Premiums Earned Direct $ 1,589,815 $ 1,459,263 $ 4,631,453 $ 4,242,795 Ceded (61,601) (63,243) (186,831) (224,342) Assumed 9,862 6,941 29,003 19,608 Net $ 1,538,076 $ 1,402,961 $ 4,473,625 $ 4,038,061 The Company recognized ceded premiums earned of approximately $61.6 million and $63.2 million for the three months ended September 30, 2026 and 2025, respectively, and $186.8 million and $224.3 million for the nine months ended September 30, 2026 and 2025, respectively, which are included in net premiums earned in its consolidated statements of operations. The Company recognized ceded losses and loss adjustment expenses of approximately $5.4 million and $(28.0) thousand for the three months ended September 30, 2026 and 2025, respectively, and $5.8 million and $1,292.9 million for the nine months ended September 30, 2026 and 2025, respectively, which are included in losses and loss adjustment expenses in its consolidated statements of operations. The large ceded losses and loss adjustment expenses for the nine months ended September 30, 2025 is due to the Palisades and Eaton wildfires that occurred in the first quarter of 2025. The negative ceded losses and loss adjustment expenses for the three months ended September 30, 2025 is primarily the result of favorable development on prior years' catastrophe losses that were ceded to the Company's reinsurers. 8
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Table of Contents The Company's insurance subsidiaries, as primary insurers, are required to pay losses to the extent reinsurers are unable to discharge their obligations under the reinsurance agreements. Revenue from Contracts with Customers (Topic 606) The Company's revenue from contracts with customers is commission income earned from third-party insurers by its 100% owned insurance agencies, which amounted to approximately $7.6 million and $7.7 million, with related expenses of $4.0 million and $3.9 million, for the three months ended September 30, 2026 and 2025, respectively, and $23.5 million and $21.6 million, with related expenses of $12.6 million and $11.1 million, for the nine months ended September 30, 2026 and 2025, respectively. All of the commission income, net of related expenses, is included in other revenues in the Company's consolidated statements of operations, and in other income of the Property and Casualty business segment in the Company's segment reporting (see Note 13. Segment Information). As of September 30, 2026 and December 31, 2025, the Company had no contract assets and contract liabilities, and no remaining performance obligations associated with unrecognized revenues. Allowance for Credit Losses Financial Instruments - Credit Losses (Topic 326) uses the "expected loss" methodology for recognizing credit losses for financial assets that are not accounted for at fair value through net income. The Company's investment portfolio, excluding accrued investment income, was not affected by Topic 326 as it applies the fair value option to all of its investments. The Company's estimated allowance amounts for credit losses are normally related to premiums receivable and reinsurance recoverables. In developing an estimate of expected credit losses, the Company elected the practical expedient provided in Topic 326 to assume that current conditions as of the balance sheet date do not change for the remaining life of premiums receivable and reinsurance recoverables. Premiums Receivable The majority of the Company's premiums receivable are short-term in nature and are due within a year, consistent with the policy term of its insurance policies sold. Generally, premiums are collected prior to providing risk coverage, minimizing the Company's exposure to credit risk. In estimating an allowance for uncollectible premiums receivable, the Company assesses customer balances and write-offs by state, line of business, and the year the premiums were written. The estimated allowance is based on historical write-off percentages adjusted for the effects of current trends and reasonable and supportable forecasts, as well as expected recoveries of amounts written off. The following table presents a summary of changes in allowance for credit losses on premiums receivable: Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (Amounts in thousands) Beginning balance $ 5,800 $ 6,300 $ 6,000 $ 6,400 Provision during the period for expected credit losses 343 703 1,469 1,752 Write-off amounts during the period (1,088) (866) (3,046) (2,615) Recoveries during the period of amounts previously written off 345 263 977 863 Ending balance $ 5,400 $ 6,400 $ 5,400 $ 6,400 Reinsurance Recoverables Reinsurance recoverables are balances due to the Company from its reinsurers for paid and unpaid losses and loss adjustment expenses. Generally, the Company uses a default analysis to estimate uncollectible reinsurance recoverables. The primary components of the default analysis are reinsurance recoverable balances by reinsurer, net of collateral and any liabilities held by the Company subject to a right of offset, and future default factors used to estimate the probability that the reinsurer may be unable to meet its future obligations in full. The determination of the future default factor is based on a historical default factor published by a major rating agency applicable to the particular financial strength rating class. 9
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Table of Contents The following table presents a summary of changes in allowance for credit losses on reinsurance recoverables: Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (Amounts in thousands) Beginning balance $ 1 $ 559 $ 39 $ — Provision during the period for expected credit losses 2 (293) (36) 266 Write-off amounts during the period — — — — Recoveries during the period of amounts previously written off — — — — Ending balance $ 3 $ 266 $ 3 $ 266 The allowance for credit losses on reinsurance recoverables for the three and nine months ended September 30, 2025 is largely related to losses ceded associated with the Palisades and Eaton wildfires that occurred in the first quarter of 2025. Accrued Interest Receivables The Company made certain accounting policy elections for its accrued interest receivables allowed under Topic 326: a) an election to present accrued interest receivable balances separately from the associated financial assets on the balance sheet, and b) an election not to measure an allowance for credit losses on accrued interest receivable amounts and instead write off uncollectible accrued interest amounts in a timely manner by reversing interest income. The Company's accrued interest receivable balances are included in accrued investment income receivable in its consolidated balance sheets. There were no accrued interest receivable amounts considered uncollectible or written off during the nine months ended September 30, 2026 and 2025. 2. Recently Issued Accounting Standards In September 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) 2025-06, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)—Targeted Improvements to the Accounting for Internal-Use Software." ASU 2025-06 is intended to improve the operability of Subtopic 350-40 by removing all references to software development project stages so that the guidance is neutral to different software development methods. An entity is required to start capitalizing software costs when both of the following occur: (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform the function intended. Furthermore, ASU 2025-06 supersedes the website development costs guidance and incorporates the recognition requirements for website-specific development costs from Subtopic 350-50 into Subtopic 350-40. ASU 2025-06 is effective for annual and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)—Disaggregation of Income Statement Expenses." ASU 2024-03 is intended to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. Although the amendments in ASU 2024-03 do not change or remove current expense disclosure requirements, they affect where this information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is evaluating the presentational effect that ASU 2024-03 will have on its notes to consolidated financial statements. 3. Financial Instruments Financial instruments recorded in the consolidated balance sheets include investments, notes receivable, other receivables, options sold, accounts payable, and unsecured notes payable. Due to their short-term maturities, the carrying values of other receivables and accounts payable approximate their fair values. All investments are carried at fair value in the consolidated balance sheets. 10
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Table of Contents The following table presents the fair values of financial instruments: September 30, 2026 December 31, 2025 (Amounts in thousands) Assets Investments $ 7,229,697 $ 6,580,030 Note receivable 9,820 9,993 Liabilities Options sold 715 254 Notes payable 551,506 573,740 Investments Interest and dividend income on investment holdings are recognized on an accrual basis at each measurement date and are included in net investment income in the Company’s consolidated statements of operations. The cost of investments sold is determined on a first-in and first-out method and realized gains and losses are included in net realized investment gains or losses in the Company's consolidated statements of operations. In the normal course of investing activities, the Company either forms or enters into relationships with variable interest entities ("VIEs"). A VIE is an entity that either has investors that lack certain essential characteristics of a controlling financial interest, such as simple majority kick- out rights, or lacks sufficient funds to finance its own activities without financial support provided by other entities. The Company performs ongoing qualitative assessments of the VIEs to determine whether the Company has a controlling financial interest in the VIE and therefore is the primary beneficiary. The Company is deemed to have a controlling financial interest when it has both the ability to direct the activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses or right to receive benefits from the VIE that could potentially be significant to the VIE. Based on the Company's assessment, if it determines it is the primary beneficiary, the Company consolidates the VIE in its consolidated financial statements. From time to time, the Company forms special purpose investment vehicles to facilitate its investment activities involving derivative instruments such as total return swaps, or limited partnerships such as private equity funds. These special purpose investment vehicles are consolidated VIEs as the Company has determined it is the primary beneficiary of such VIEs. Creditors have no recourse against the Company in the event of default by these VIEs. The Company had no implied or unfunded commitments to these VIEs at September 30, 2026 and December 31, 2025. The Company's financial or other support provided to these VIEs and its loss exposure are limited to its collateral and original investment. The Company invests, directly or indirectly through its consolidated VIEs, in limited partnerships or limited liability companies such as private equity funds. These investments are non-consolidated VIEs as the Company has determined it is not the primary beneficiary of such VIEs. The Company's maximum exposure to loss with respect to these VIEs is limited to the total carrying value that is included in equity securities in the Company's consolidated balance sheets. At September 30, 2026 and December 31, 2025, the Company had approximately $8 million and $4 million, respectively, in unfunded commitments to these VIEs. Notes Receivable In September 2024, the Company completed the sale of an office building located in Brea, California for a total sale price of $31.5 million. $21.4 million of the total sale price was received in the form of a promissory note. The note receivable was secured by the property sold, and bore interest at an annual rate of 7.0%. The term of the note receivable was four years and interest was paid in quarterly installments. The Company received the full principal payment of the note receivable and accrued interest in September 2025. In March 2023, the Company completed the sale of an office building located in Clearwater, Florida, for a total sale price of approximately $19.6 million. $9.8 million of the total sale price was received in the form of a promissory note. The note receivable is secured by the property sold, and bears interest at an annual rate of 7.0%. The term of the note receivable is four years and interest is paid in monthly installments. Interest earned on the notes receivable is recognized in other revenues in the Company's consolidated statements of operations. The Company elected to apply the fair value option to the notes receivable at the time they were first recognized. The fair values of the notes receivable are included in other assets in the Company's consolidated balance sheets, while the 11
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Table of Contents changes in fair value of the notes receivable are included in net realized investment gains or losses in the Company's consolidated statements of operations. Options Sold The Company writes covered call options through listed and over-the-counter exchanges. When the Company writes an option, an amount equal to the premium received by the Company is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Company as realized gains from investments on the expiration date. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Company has realized a gain or loss. The Company, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. Liabilities for covered call options are included in other liabilities in the Company's consolidated balance sheets. Notes Payable At September 30, 2026, the Company had $525 million of unsecured notes and $50 million drawn under the unsecured credit facility. $525 million of unsecured notes were issued on June 12, 2026 and mature on June 15, 2036. At December 31, 2025, the Company had $375 million of unsecured notes and $200 million drawn under the unsecured credit facility. $375 million of unsecured notes were redeemed on July 13, 2026. The fair values of the Company’s unsecured notes and amounts drawn under the unsecured credit facility at September 30, 2026 and December 31, 2025 were obtained from a third-party pricing service. See Note 11. Notes Payable for additional information. For additional disclosures regarding methods and assumptions used in estimating fair values, see Note 5. Fair Value Measurements. 4. Fair Value Option The Company applies the fair value option to all fixed maturity and equity investment securities, short-term investments, and notes receivable. The primary reasons for electing the fair value option were simplification and cost-benefit considerations as well as the expansion of the use of fair value measurement by the Company consistent with the long-term measurement objectives of the FASB for accounting for financial instruments. Gains or losses due to changes in fair value of such financial instruments measured at fair value are included in net realized investment gains or losses in the Company’s consolidated statements of operations. The following table presents gains (losses) recognized due to changes in fair value of such financial instruments : Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (Amounts in thousands) Fixed maturity securities $ (241,342) $ 38,734 $ (235,425) $ 47,718 Equity securities (21,873) 26,615 7,083 19,106 Short-term investments 5 4 10 (6) Total investment (losses) gains $ (263,210) $ 65,353 $ (228,332) $ 66,818 Notes receivable (50) (387) (173) 213 Total (losses) gains $ (263,260) $ 64,966 $ (228,505) $ 67,031 5. Fair Value Measurements The Company employs a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date using the exit price. Accordingly, when market observable data are not readily available, the Company’s own assumptions are used to reflect those that market participants would be presumed to use in pricing the asset or liability at the measurement date. 12
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Table of Contents Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the level of judgment associated with inputs used to measure their fair values and the level of market price observability, as follows: Level 1 Unadjusted quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Level 2 Pricing inputs are other than quoted prices in active markets, which are based on the following: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in non-active markets; or • Either directly or indirectly observable inputs as of the reporting date. Level 3 Pricing inputs are unobservable and significant to the overall fair value measurement, and the determination of fair value requires significant management judgment or estimation. In certain cases, inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. Thus, a Level 3 fair value measurement may include inputs that are observable (Level 1 or Level 2) and unobservable (Level 3). The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and consideration of factors specific to the asset or liability. The Company uses prices and inputs that are current as of the measurement date, including during periods of market disruption. In periods of market disruption, the ability to observe prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified from Level 1 to Level 2, or from Level 2 to Level 3. The Company recognizes transfers between levels at either the actual date of the event or a change in circumstances that caused the transfer. Summary of Significant Valuation Techniques for Financial Assets and Financial Liabilities The Company’s fair value measurements are based on the market approach, which utilizes market transaction data for the same or similar instruments. The Company obtained unadjusted fair values on 98.4% of its investment portfolio at fair value from an independent pricing service at September 30, 2026. Level 1 measurements - Fair values of financial assets and financial liabilities are obtained from an independent pricing service, and are based on unadjusted quoted prices for identical assets or liabilities in active markets. Additional pricing services and closing exchange values are used as a comparison to ensure that reasonable fair values are used in pricing the investment portfolio. U.S. government bonds/Short-term bonds: Valued using unadjusted quoted market prices for identical assets in active markets. Common stock: Comprised of actively traded, exchange listed U.S. and international equity securities and valued based on unadjusted quoted prices for identical assets in active markets. Money market instruments: Valued based on unadjusted quoted prices for identical assets in active markets. Options sold: Comprised of free-standing exchange listed derivatives that are actively traded and valued based on unadjusted quoted prices for identical instruments in active markets. Level 2 measurements - Fair values of financial assets and financial liabilities are obtained from an independent pricing service or outside brokers, and are based on prices for similar assets or liabilities in active markets or valuation models whose inputs are observable, directly or indirectly, for substantially the full term of the asset or liability. Additional pricing services are used as a comparison to ensure reliable fair values are used in pricing the investment portfolio. Municipal securities: Valued based on models or matrices using inputs such as quoted prices for identical or similar assets in active markets. Mortgage-backed securities: Comprised of securities that are collateralized by residential and commercial mortgage loans valued based on models or matrices using multiple observable inputs, such as benchmark yields, reported trades and broker/dealer quotes, for identical or similar assets in active markets. The Company had holdings of $18.4 million and $11.2 million at fair value in commercial mortgage-backed securities at September 30, 2026 and December 31, 2025, respectively. Corporate securities/Short-term bonds: Valued based on a multi-dimensional model using multiple observable inputs, such as benchmark yields, reported trades, broker/dealer quotes and issue spreads, for identical or similar assets in active markets. 13
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Table of Contents Non-redeemable preferred stock: Valued based on observable inputs, such as underlying and common stock of same issuer and appropriate spread over a comparable U.S. Treasury security, for identical or similar assets in active markets. Collateralized loan obligations ("CLOs"): Valued based on underlying debt instruments and the appropriate benchmark spread for similar assets in active markets. Other asset-backed securities: Comprised of securities that are collateralized by non-mortgage assets, such as automobile loans, valued based on models or matrices using multiple observable inputs, such as benchmark yields, reported trades and broker/dealer quotes, for identical or similar assets in active markets. Notes receivable: Valued based on observable inputs, such as benchmark yields, and considering any premium or discount for the differential between the stated interest rate and market interest rates, based on quoted market prices of similar instruments. Level 3 measurements - Fair values of financial assets and financial liabilities are based on inputs that are both unobservable and significant to the overall fair value measurement, including any items in which the evaluated prices obtained elsewhere are deemed to be of a distressed trading level. Private equity investment: Private equity investment, excluding private equity funds measured at net asset value ("NAV"), is valued considering purchase price, estimates of liquidation value, the existence of restrictions on transferability of the securities, prices received in recent significant private placements of securities of the same issuer, prices of securities of comparable companies engaged in similar businesses, and changes in the financial condition and prospects of the issuer. Fair value measurement using NAV practical expedient - The fair value of the Company's investment in private equity funds measured at NAV is determined using NAV as advised by the external fund managers and the third party administrators. The NAV of the Company's limited partnership or limited liability company interest in such a fund is based on the manager's and the administrator's valuation of the underlying holdings in accordance with the fund's governing documents and GAAP. In accordance with applicable accounting guidance, private equity funds measured at fair value using the NAV practical expedient are not classified in the fair value hierarchy. At September 30, 2026, the Company had capital invested in five such funds: the strategy of four such funds with a combined fair value of approximately $98.2 million at September 30, 2026 is to provide current income to investors by investing mainly in secured loans, CLOs or CLO issuers (including CLO equity and CLO mezzanine tranches), and equity interests in vehicles established to purchase and warehouse loans; the strategy of the other such fund with a fair value of approximately $8.7 million at September 30, 2026 is to achieve long-term capital appreciation through privately-negotiated venture capital investments in seed- and early-stage portfolio companies with technology-enabled business models. The Company had approximately $8 million in unfunded commitments at September 30, 2026 with respect to the private equity funds measured at NAV. The underlying assets of the funds are expected to be liquidated over the period of approximately one year to six years from September 30, 2026. In addition, the Company does not have the ability to redeem or withdraw from the funds, or to sell, assign, pledge or transfer its investment, without the consent from the General Partner or Managers of the funds. The Company will receive distributions based on the liquidation of the underlying assets and the interest proceeds from the underlying assets for all the funds. The Company’s financial instruments at fair value are reflected in the consolidated balance sheets on a trade-date basis. Related unrealized gains or losses are recognized in net realized investment gains or losses in the consolidated statements of operations. Fair value measurements are not adjusted for transaction costs. 14
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Table of Contents The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis, and indicate the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair values: September 30, 2026 Level 1 Level 2 Level 3 Total (Amounts in thousands) Assets Fixed maturity securities: U.S. government bonds $ 14,245 $ — $ — $ 14,245 Municipal securities — 3,879,530 — 3,879,530 Mortgage-backed securities — 638,176 — 638,176 Corporate securities — 682,711 — 682,711 Collateralized loan obligations — 744,254 — 744,254 Other asset-backed securities — 54,784 — 54,784 Total fixed maturity securities 14,245 5,999,455 — 6,013,700 Equity securities: Common stock 839,529 — — 839,529 Non-redeemable preferred stock — 37,732 — 37,732 Private equity investment — — 5,103 5,103 Private equity funds measured at net asset value 106,961 Total equity securities 839,529 37,732 5,103 989,325 Short-term investments: Money market instruments 226,647 — — 226,647 Other 25 — — 25 Total short-term investments 226,672 — — 226,672 Other assets: Note receivable — 9,820 — 9,820 Total assets at fair value $ 1,080,446 $ 6,047,007 $ 5,103 $ 7,239,517 Liabilities Other liabilities: Options sold $ 715 $ — $ — $ 715 Total liabilities at fair value $ 715 $ — $ — $ 715 (1) 15
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Table of Contents December 31, 2025 Level 1 Level 2 Level 3 Total (Amounts in thousands) Assets Fixed maturity securities: U.S. government bonds $ 21,546 $ — $ — $ 21,546 Municipal securities — 3,538,473 — 3,538,473 Mortgage-backed securities — 297,381 — 297,381 Corporate securities — 751,602 — 751,602 Collateralized loan obligations — 722,794 — 722,794 Other asset-backed securities — 98,455 — 98,455 Total fixed maturity securities 21,546 5,408,705 — 5,430,251 Equity securities: Common stock 679,594 — — 679,594 Non-redeemable preferred stock — 38,761 — 38,761 Private equity funds measured at net asset value 94,432 Total equity securities 679,594 38,761 — 812,787 Short-term investments: Short-term bonds — 34,000 — 34,000 Money market instruments 302,978 — — 302,978 Other 14 — — 14 Total short-term investments 302,992 34,000 — 336,992 Other assets: Note receivable — 9,993 — 9,993 Total assets at fair value $ 1,004,132 $ 5,491,459 $ — $ 6,590,023 Liabilities Other liabilities: Options sold $ 254 $ — $ — $ 254 Total liabilities at fair value $ 254 $ — $ — $ 254 __________ The fair value is measured using the NAV practical expedient; therefore, it is not categorized within the fair value hierarchy. The fair value amount is presented in this table to permit reconciliation of the fair value hierarchy to the amounts presented in the Company's consolidated balance sheets. The following table presents a summary of changes in fair value of Level 3 financial assets and financial liabilities: Private Equity Investment Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (Amounts in thousands) Beginning balance $ 5,000 $ — $ — $ — Net realized gains or losses included in earnings 103 — 103 — Purchase — — 5,000 — Sales/settlements — — — — Ending balance $ 5,103 $ — $ 5,103 $ — The amount of total gains or losses for the period included in earningsattributable to assets still held at September 30 $ 103 $ — $ 103 $ — There were no transfers between Levels 1, 2, and 3 of the fair value hierarchy during the nine months ended September 30, 2026 and 2025. (1) (1) 16
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Table of Contents At September 30, 2026, there were no material assets or liabilities measured at fair value on a nonrecurring basis. Financial Instruments Disclosed, But Not Carried, at Fair Value The following tables present the carrying value and fair value of the Company’s financial instruments disclosed, but not carried, at fair value, and the level within the fair value hierarchy at which such instruments are categorized: September 30, 2026 Carrying Value Fair Value Level 1 Level 2 Level 3 (Amounts in thousands) Liabilities Notes payable: Unsecured notes $ 519,005 $ 501,144 $ — $ 501,144 $ — Unsecured credit facility 50,000 50,362 — 50,362 — Total $ 569,005 $ 551,506 $ — $ 551,506 $ — December 31, 2025 Carrying Value Fair Value Level 1 Level 2 Level 3 (Amounts in thousands) Liabilities Notes payable: Unsecured notes $ 374,527 $ 374,625 $ — $ 374,625 $ — Unsecured credit facility 200,000 199,115 — 199,115 — Total $ 574,527 $ 573,740 $ — $ 573,740 $ — Unsecured Notes The fair values of the Company’s unsecured notes at September 30, 2026 and December 31, 2025 were based on the spreads above the risk- free yield curve. These spreads are generally obtained from the new issue market, secondary trading and broker-dealer quotes. See Note 11. Notes Payable for additional information on unsecured notes. Unsecured Credit Facility The fair values of the amounts drawn under the Company's unsecured credit facility at September 30, 2026 and December 31, 2025 were based on the unadjusted quoted price for similar notes in active markets. See Note 11. Notes Payable for additional information on the unsecured credit facility. 6. Derivative Financial Instruments The Company is exposed to certain risks relating to its ongoing business operations. The primary risk managed by using derivative instruments is equity price risk. Equity contracts (options sold) on various equity securities are intended to manage the price risk associated with forecasted purchases or sales of such securities. From time to time, the Company also enters into derivative contracts to enhance returns on its investment portfolio. The following tables present the location and amounts of derivative fair values in the consolidated balance sheets and derivative gains or losses in the consolidated statements of operations: Derivatives September 30, 2026 December 31, 2025 (Amount in thousands) Options sold - Other liabilities $ 715 $ 254 Total $ 715 $ 254 17
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Table of Contents Gains Recognized in Net (Loss) Income Three Months Ended September 30, Nine Months Ended September 30, 2026 2025 2026 2025 (Amounts in thousands) Options sold - Net realized investment (losses) gains $ 6,134 $ 2,616 $ 14,623 $ 4,324 Total $ 6,134 $ 2,616 $ 14,623 $ 4,324 Most options sold consist of covered calls. The Company writes covered calls on underlying equity positions held as an enhanced income strategy that is permitted for the Company’s insurance subsidiaries under statutory regulations. The Company manages the risk associated with covered calls through strict capital limitations and asset diversification throughout various industries. See Note 5. Fair Value Measurements for additional disclosures regarding options sold. 7. Goodwill and Other Intangible Assets Goodwill There were no changes in the carrying amount of goodwill during the three and nine months ended September 30, 2026 and 2025. No accumulated goodwill impairment losses existed at September 30, 2026 and December 31, 2025. Goodwill is reviewed annually for impairment and more frequently if potential impairment indicators exist. No impairment indicators were identified during the three and nine months ended September 30, 2026 and 2025. All of the Company's goodwill is associated with the Property and Casualty business segment. See Note 13. Segment Information for additional information on the reportable business segment. Other Intangible Assets The following table presents the components of other intangible assets: Gross CarryingAmount AccumulatedAmortization Net CarryingAmount Useful Lives (Amounts in thousands) (in years) As of September 30, 2026: Customer relationships $ 55,107 $ (54,332) $ 775 10 Trade names 15,400 (11,390) 4,010 24 Technology 4,300 (4,300) — 10 Insurance license 1,400 — 1,400 Indefinite Total other intangible assets, net $ 76,207 $ (70,022) $ 6,185 As of December 31, 2025: Customer relationships $ 55,107 $ (54,172) $ 935 10 Trade names 15,400 (10,908) 4,492 24 Technology 4,300 (4,300) — 10 Insurance license 1,400 — 1,400 Indefinite Total other intangible assets, net $ 76,207 $ (69,380) $ 6,827 Other intangible assets are reviewed annually for impairment and more frequently if potential impairment indicators exist. No impairment indicators were identified during the three and nine months ended September 30, 2026 and 2025. Other intangible assets with definite useful lives are amortized on a straight-line basis over their useful lives. Amortization expense for other intangible assets was $0.2 million for each of the three-month periods ended September 30, 2026 and 2025, and $0.6 million for each of the nine-month periods ended September 30, 2026 and 2025. 18
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Table of Contents The following table presents the estimated future amortization expense related to other intangible assets as of September 30, 2026: Year Amortization Expense (Amounts in thousands) Remainder of 2026 $ 214 2027 856 2028 856 2029 811 2030 765 Thereafter 1,283 Total $ 4,785 8. Share-Based Compensation In February 2024, the Board adopted the 2024 Long-Term Incentive Plan (the “LTIP”) to provide certain key employees with the right to receive cash awards providing an opportunity to participate in the appreciation of the Company’s value and in order to retain these key employees and reward them for contributing to the success of the Company. Participants in the LTIP may be granted a number of notional interests, or phantom stock units ("PSUs"). Each PSU represents the right to receive payment of the value of a share of the Company’s common stock upon vesting. PSUs may be granted subject to vesting conditions, which may include service-based and/or performance-based vesting conditions tied to corporate and/or individual achievement objectives. An employee must remain employed through the date of payment of an award to be eligible for any payout under the LTIP, with the exception of certain termination and resignation of executives as described in further details below. PSUs are settled in cash upon vesting and accounted for as liability-based awards. Performance-based PSUs During the nine months ended September 30, 2026, the Company granted a total "target" award of 98,253 performance-based PSUs. The payout value of the performance-based PSUs granted under the LTIP will be determined based on the achievement of specific, pre-established corporate performance objectives, and in part on individual performance, during the applicable three-year performance period (the "Performance Cycle"). The maximum payout level for the performance-based PSUs is 150% of the “target” award. The following table presents the summary of the performance-based PSU grants as of September 30, 2026: Grant year 2026 2025 2024 Three-year performance period ending December 31, 2028 2027 2026 Vesting shares, target (net of forfeited) 95,950 155,571 169,236 Vesting shares, maximum (net of forfeited) 143,925 233,357 253,854 These performance-based PSUs vest at the end of the Performance Cycle beginning with the year of the grant, and then only if, and to the extent that, the Company’s performance during the Performance Cycle achieves the threshold established by the Compensation Committee of the Board. Each annual performance result is based on the Company’s annual market share growth and its annual combined ratio. The vested number of performance-based PSUs for each grantee is based on the average of the Company's three annual performance results combined with the individual's performance during the Performance Cycle. The cash payout amount for each unit of the vested performance-based PSUs is equal to the average closing price per share of the Company’s common stock for the 30 calendar days preceding the determination of the final number of vested PSUs for each grantee at the end of the Performance Cycle for the 2024 grants, and the average closing price per share of the Company’s common stock for the five trading days following the Company’s public release of its financial results for the final calendar year in the Performance Cycle for the 2025 and 2026 grants. Liabilities for the expected cash payout and associated compensation expenses are recognized based on management’s best estimate of the number of the performance-based PSUs expected to be vested resulting from the probable outcome of the performance-based vesting conditions, combined with the market price of the Company's common stock at the end of each reporting period. If the performance-based vesting conditions are not expected to be met for the Performance Cycle, no compensation cost will be recognized and any recognized compensation cost will be reversed. As of September 30, 2026, 49,742 of the total performance-based PSUs granted under the LTIP were forfeited because the recipients were no longer 19
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Table of Contents employed by the Company. Restricted PSUs The Company, from time to time, grants restricted PSUs to certain key employees, typically to retain such key employees. The Company granted 84,127 restricted PSUs during the nine months ended September 30, 2026, and a total of 200,281 restricted PSUs since the start of the LTIP as of September 30, 2026, 15,540 of which were forfeited because the recipients were no longer employed by the Company. The restricted PSUs vest in three equal annual installments on each of the first three anniversaries of the grant date. The payout value of the restricted PSUs granted under the LTIP is determined based on the closing price per share of the Company's common stock at each vesting date, and is paid at the end of each annual vesting period. Commencing with the performance-based and restricted PSUs granted to all employees in 2026, the following conditions apply in the event of a change in control: a) the cash payout amount for each unit of the vested performance-based and restricted PSUs will be equal to the average closing price per share of the Company’s common stock for the five trading days preceding the change in control; b) the number of earned performance-based PSUs will be determined on the date of the change in control based on actual performance for completed annual performance periods and at target for incomplete performance periods, and the resulting earned performance-based PSUs will remain eligible to vest based on continued service through the last day of the three year performance period. In addition, commencing with the performance-based and restricted PSUs granted to executives in 2026, the following conditions apply in the event of an executive’s termination without cause, resignation for good reason or termination due to death or disability: a) with respect to such performance-based PSUs, if such termination occurs prior to a change in control or more than eighteen months following a change in control, an executive will vest in a prorated number of earned performance-based PSUs based on the portion of the three year performance period that has elapsed prior to the date of termination plus twelve months and be paid at that time, and if such termination occurs within eighteen months following a change in control, an executive will vest in all of the earned performance-based PSUs on the date of termination and be paid at that time; b) with respect to such restricted PSUs, if such termination occurs prior to a change in control or more than eighteen months following a change in control, any restricted PSUs that would have otherwise vested during the twelve months following the date of termination will vest upon such termination and be paid at that time, and if such termination occurs within eighteen months following a change in control, an executive will vest in all of the restricted PSUs on the date of termination and be paid at that time. The Company recorded share-based compensation expense of approximately $4.2 million and $6.1 million for the three months ended September 30, 2026 and 2025, respectively, and $16.5 million and $8.7 million for the nine months ended September 30, 2026 and 2025, respectively, associated with the performance-based and restricted PSUs, which are mostly included in other operating expenses in its consolidated statements of operations. The Company recorded approximately $32.2 million and $18.5 million of accrued share-based compensation liability associated with the performance-based and restricted PSUs at September 30, 2026 and December 31, 2025, respectively, which are included in other liabilities in its consolidated balance sheets. A total of 8,069 and 28,384 restricted PSUs were vested during the three and nine months ended September 30, 2026, respectively. 9. Income Taxes For financial statement purposes, the Company recognizes tax benefits related to positions taken, or expected to be taken, on a tax return only if the positions are “more-likely-than-not” sustainable. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its consolidated financial statements. There was no change in the total amount of unrecognized tax benefits related to tax uncertainties during the nine months ended September 30, 2026. The Company and its subsidiaries file income tax returns with the Internal Revenue Service and the taxing authorities of various states. Tax years that remain subject to examination by major taxing jurisdictions are 2023 through 2025 for federal taxes and 2022 through 2025 for state taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting basis and the respective tax basis of the Company’s assets and liabilities, and expected benefits of utilizing net operating loss, capital loss, and tax-credit carryforwards. The Company assesses the likelihood that its deferred tax assets will be realized and, to the extent management does not believe these assets are more likely than not to be realized, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to 20
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Table of Contents taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or laws is recognized in net income (loss) in the period that includes the enactment date. At September 30, 2026, the Company’s deferred income taxes were in a net asset position, which included a combination of ordinary and capital deferred tax expenses or benefits. In assessing the Company’s ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon generating sufficient taxable income of the appropriate character within the carryback and carryforward periods available under the tax law. Management considers the reversal of deferred tax liabilities, projected future taxable income of an appropriate nature, and tax planning strategies in making this assessment. The Company believes that through projected future taxable income of an appropriate nature, the use of prudent tax planning strategies, and the generation of capital gains, sufficient income will be realized in order to maximize the full benefits of its deferred tax assets. Although realization is not assured, management believes that it is more likely than not that the Company’s deferred tax assets will be realized. 10. Loss and Loss Adjustment Expense Reserves The following table presents the activity in loss and loss adjustment expense reserves: Nine Months Ended September 30, 2026 2025 (Amounts in thousands) Gross reserves, beginning of period $ 3,633,338 $ 3,152,031 Reinsurance recoverables on unpaid losses, beginning of period (34,008) (28,645) Net reserves, beginning of period 3,599,330 3,123,386 Incurred losses and loss adjustment expenses related to: Current year 3,025,214 3,117,788 Prior years (102,401) (74,192) Total incurred losses and loss adjustment expenses 2,922,813 3,043,596 Loss and loss adjustment expense payments related to: Current year 1,349,424 1,476,133 Prior years 1,456,645 1,183,627 Total payments 2,806,069 2,659,760 Net reserves, end of period 3,716,074 3,507,222 Reinsurance recoverables on unpaid losses, end of period 38,487 88,750 Gross reserves, end of period $ 3,754,561 $ 3,595,972 The decrease in the provision for insured events of prior years during the nine months ended September 30, 2026 of $102.4 million 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. The decrease in the provision for insured events of prior years during the nine months ended September 30, 2025 of $74.2 million was primarily attributable to lower than estimated losses and loss adjustment expenses in the automobile and homeowners lines of insurance business. For the nine months ended September 30, 2026 and 2025, the Company incurred catastrophe losses net of reinsurance of approximately $191 million and $489 million, respectively. 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. The Company experienced unfavorable development of approximately $65 million and favorable development of approximately $18 million on prior years' catastrophe losses for the nine months ended September 30, 2026 and 2025, respectively. 21
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Table of Contents In January 2025, the Palisades and Eaton wildfires caused widespread damage in parts of Southern California. The following table presents the components of net losses and loss adjustment expenses from the Palisades and Eaton wildfires as of September 30, 2026 and December 31, 2025 and for the nine months ended September 30, 2026: As ofSeptember 30, 2026 As ofDecember 31, 2025 For the Nine MonthsEnded September 30,2026 (Amounts in thousands) Gross losses and loss adjustment expenses $ 2,293,719 $ 2,191,752 $ 101,967 Subrogation recoverable - Eaton fire (562,039) (537,506) (24,533) Subrogation recovered and recoverable - Palisades fire (50,371) (48,026) (2,345) Reinsurance recovered and recoverable (1,293,500) (1,293,500) — Net catastrophe losses and loss adjustment expenses on Eaton and Palisades firesbefore FAIR Plan $ 387,809 $ 312,720 $ 75,089 — Company's share of FAIR Plan losses and loss adjustment expenses $ 93,625 $ 92,717 $ 908 Recoupable portion of FAIR Plan losses and loss adjustment expenses (25,000) (25,000) — Net FAIR Plan losses and loss adjustment expenses $ 68,625 $ 67,717 $ 908 — Net losses and loss adjustment expenses on Eaton and Palisades fires $ 456,434 $ 380,437 $ 75,997 __________ The Company is actively pursuing subrogation against Southern California Edison ("SCE") on the Eaton fire. The Company recorded approximately $562 million in estimated subrogation recoveries, or approximately 55% of its estimated ultimate losses on the Eaton fire, as an offset against loss and loss adjustment expense reserves in its consolidated balance sheet at September 30, 2026. Although SCE has not admitted that its equipment caused the Eaton fire, significant evidence indicates that SCE's equipment was the cause of the Eaton fire. In September 2025, SCE disclosed that it is probable that SCE will incur material losses from the Eaton fire and entered into a negotiated agreement without litigation with one insurance company to pay 52% of the losses incurred. In February 2026, Edison International, parent company of SCE, commented that SCE has settled two subrogation claims on the Eaton fire with insurance companies for an average of 55% of the losses incurred. In addition, in August 2026, the County of Los Angeles Fire Department released initial and supplemental investigative reports following its joint investigation of the origin of the Eaton fire with CAL FIRE, which identified SCE's equipment as the cause of the Eaton fire. In June 2025, the Company sold its subrogation rights on the Palisades fire to a third party for a guaranteed percentage of losses incurred plus a share in the amount recovered above a certain threshold (“Upside Recovery’). The recovery amount from the guaranteed percentage of losses is approximately $50 million, with $36 million received as of September 30, 2026. The remaining balance of approximately $14 million at September 30, 2026 will be settled each quarter based on the amount of claims payments the Company makes subsequent to the previous settlement date. The Company did not record an amount for the potential Upside Recovery. The Company’s catastrophe reinsurance program for the treaty year ended June 30, 2025 provided approximately $1,290 million of limits on a per occurrence basis after covered catastrophe losses exceed the Company’s retention of $150 million. The $1,290 million of limits used for the Palisades and Eaton wildfires was reduced by $6.5 million for ineligible parametric coverage. The Company also utilized $10 million from a separate property excess of loss reinsurance treaty making the total reinsurance used for the Palisades and Eaton wildfires approximately $1,294 million, which was fully billed and recovered as of September 30, 2026, with the exception of approximately $6 million remaining on the catastrophe bond that will be billed over the next few quarters. The Company is a member of the California FAIR Plan, the state's fire insurer of last resort. To the extent the FAIR Plan has losses exceeding its capital and reinsurance coverage, the FAIR Plan can assess its member companies for the shortfall based on each company’s California market share. The Company's share of the FAIR Plan losses from the Palisades and Eaton wildfires was approximately $94 million, which was recorded as part of the Company's losses and loss adjustment expenses from the Palisades and Eaton wildfires. The FAIR Plan assessed the Company $50 million to strengthen the FAIR Plan's capital position following the Palisades and Eaton wildfires in the first quarter of 2025. The California Department of Insurance ("DOI") allows for recoupment of 50% or $25 million of the $50 million assessment via a temporary surcharge to the Company's policyholders. The Company has received approval from the California DOI to recoup the $25 million, which partially offset the Company's share of the FAIR Plan's losses of $94 million. As of September 30, 2026, the Company has recouped approximately $13 million from its policyholders. The increases in these losses and loss adjustment expenses during the nine months ended September 30, 2026 largely (6) (1) *** (2) *** (3) (6) (4) (5) (6) (1) (2) (3) (4) (5) (6) 22
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Table of Contents resulted from higher than estimated losses on partial loss claims. *** Accounting Standards Codification (“ASC”) 944-40-30-2 through 3 and Statement of Statutory Accounting Principles (“SSAP”) No. 55 paragraph 15 require salvage and subrogation recoverables to be deducted from the liability for unpaid claims; therefore, loss and loss adjustment expense reserves on the Company's consolidated balance sheets is shown net of estimated salvage and subrogation recoverables, and losses and loss adjustment expenses on its consolidated statements of operations is shown net of salvage and subrogation. The Company applies this accounting method for salvage and subrogation in a consistent manner for both GAAP and statutory reporting purposes. 11. Notes Payable The following table presents information about the Company's notes payable: Lender Contractual InterestRate Contractual MaturityDate September 30, 2026 December 31, 2025 (Amounts in thousands) Senior unsecured notes Publicly traded 4.40% March 15, 2027 $ — $ 375,000 Senior unsecured notes Publicly traded 6.25% June 15, 2036 525,000 — Total senior unsecured notes $ 525,000 $ 375,000 Unsecured credit facility Bank of America,Wells Fargo Bank,BMO Bank, U.S.Bank and RaymondJames Bank Term SOFR plus100.0-150.0 basispoints June 24, 2031 50,000 200,000 Total principal amount 575,000 575,000 Less unamortized discount and debtissuance costs 5,995 473 Total debt $ 569,005 $ 574,527 __________ On March 8, 2017, the Company completed a public debt offering issuing $375 million of senior notes. The notes were unsecured, senior obligations of the Company with a 4.4% annual coupon payable on March 15 and September 15 of each year commencing September 15, 2017. The Company used the proceeds from the notes to pay off amounts outstanding under the existing loan and credit facilities and for general corporate purposes. The Company incurred debt issuance costs of approximately $3.4 million, inclusive of underwriters' fees. The notes were issued at a slight discount of 99.847% of par, resulting in the effective annualized interest rate, including debt issuance costs, of approximately 4.45%. On July 13, 2026, the Company redeemed these $375 million senior notes by exercising a redemption option given to the Company under the First Supplemental Indenture for the notes, dated as of March 8, 2017, and recognized a loss of approximately $0.5 million on the early extinguishment of the debt, which is included in interest expense for the three and nine months ended September 30, 2026 in its consolidated statements of operations. On June 12, 2026, the Company completed a public debt offering issuing $525 million of senior notes. These $525 million senior notes are unsecured, senior obligations of the Company with a 6.25% annual coupon payable on June 15 and December 15 of each year commencing December 15, 2026. On June 15, 2026, the Company repaid $150 million of the amounts outstanding under the unsecured credit facility using the proceeds from these $525 million senior notes. On July 13, 2026, the Company used the proceeds from these $525 million senior notes to redeem the outstanding $375 million senior notes in full, as further described above. The Company incurred debt issuance costs of approximately $4.9 million, inclusive of underwriters' fees. These $525 million senior notes were issued at a slight discount of 99.764% of par, resulting in the effective annualized interest rate, including debt issuance costs, of approximately 6.32%. On June 24, 2026, the Company entered into a $250 million unsecured revolving credit facility, which replaces the Company’s existing credit facility dated as of March 31, 2021. The interest rates on borrowings under the credit facility are based on the Company's debt to total capital ratio and range from Term SOFR plus 100.0 basis points when the ratio is under 15% to Term SOFR plus 150.0 basis points when the ratio is greater than or equal to 30%. Commitment fees for the undrawn portions of the credit facility range from 10.0 basis points when the ratio is under 15% to 22.5 basis points when the ratio is greater than or equal to 30%. The debt to total capital ratio is expressed as a percentage of (a) consolidated debt to (b) consolidated shareholders' equity plus consolidated debt. The Company had previously drawn $200 million under the credit facility and contributed $150 million of the total amount drawn to the surplus of its consolidated insurance subsidiaries in 2023, and used the remainder for general corporate purposes. On June 15, 2026, the Company repaid $150 million of the $200 million outstanding borrowings under the credit facility. As of (1) (2) (3) (4) (1) (2) (3) 23
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Table of Contents September 30, 2026, the Company had a total of $50 million in borrowings under the credit facility on a three-month revolving basis at an annual interest rate of approximately 4.90%, with $200 million available to be drawn. The unamortized discount and debt issuance costs are associated with the publicly traded $525 million and $375 million senior unsecured notes at September 30, 2026 and December 31, 2025, respectively. These are amortized to interest expense over the life of the notes, and the unamortized balance is presented in the Company's consolidated balance sheets as a direct deduction from the carrying amount of the debt. The unamortized costs of approximately $1.1 million associated with entering into the $250 million unsecured revolving credit facility are included in other assets in the Company's consolidated balance sheets and amortized to interest expense over the term of the credit facility. 12. Contingencies The Company is, from time to time, named as a defendant in various lawsuits or regulatory actions incidental to its insurance business. The majority of lawsuits brought against the Company relate to insurance claims that arise in the normal course of business and are reserved for through the reserving process. For a discussion of the Company’s reserving methods, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company establishes reserves for non-insurance claims related lawsuits, regulatory actions, and other contingencies when the Company believes a loss is probable and is able to estimate its potential exposure. For loss contingencies believed to be reasonably possible, the Company also discloses the nature of the loss contingency and an estimate of the possible loss, range of loss, or a statement that such an estimatecannot be made. In addition, the Company accrues for anticipated legal defense costs associated with such lawsuits and regulatory actions. While actual losses may differ from the amounts recorded and the ultimate outcome of the Company's pending actions is generally not yet determinable, the Company does not believe that the ultimate resolution of currently pending legal or regulatory proceedings, either individually or in the aggregate, will have a material adverse effect on its financial condition or cash flows. In all cases, the Company vigorously defends itself unless a reasonable settlement appears appropriate. For a discussion of any additional regulatory or legal matters, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. 13. Segment Information The Company is primarily engaged in writing personal automobile insurance and provides related property and casualty insurance products to its customers through 12 subsidiaries in 11 states, principally in California. The Company has one reportable business segment - the Property and Casualty business segment. The Company’s Chief Operating Decision Maker ("CODM") consists of chairman of the board of directors and chief executive officer. The CODM reviews operating results based on pre-tax underwriting results which is calculated as net premiums earned less (a) losses and loss adjustment expenses and (b) underwriting expenses (policy acquisition costs and other operating expenses). The CODM evaluates operating results by line of insurance business that is further segregated by state to obtain a more disaggregated view of the Company’s operations. These operating results provide the CODM with significant information in making key operating decisions that include making price adjustments, hiring additional resources, and redeploying resources to a different line of insurance business or a different state. The lines of insurance business largely consist of private passenger automobile insurance, homeowners insurance, commercial automobile insurance, commercial property insurance, and automobile mechanical protection warranties. The Company manages its business operations under one reportable business segment and one non-reportable business segment based on lines of insurance business. In identifying its reportable and non-reportable business segments, the Company considered the financial information provided to its CODM. After considering various factors, including the development and utilization of financial data provided to the CODM, the Company concluded that identifying its operating segments by line of insurance business was consistent with the objectives of ASC 280-10. Certain operating segments have been aggregated based on similar characteristics, including the nature of products and services provided, the method used to deliver those products and services, types of customers, and the nature of the regulatory environment, to arrive at the Company’s reportable business segment (Property and Casualty Lines) and its non-reportable business segment (Other Lines). Expenses are allocated based on certain assumptions that are primarily related to premiums and losses. The Company’s net investment income, net realized investment gains or losses, other income, and interest expense are excluded in evaluating pre-tax underwriting profit. The Company does not allocate its assets, including investments, or income taxes in evaluating pre-tax underwriting profit. (4) 24
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Table of Contents Property and Casualty Lines The Property and Casualty Lines business segment offers several insurance products to the Company’s individual customers and small business customers. The major insurance products (lines of insurance business) are: private passenger automobile, which is the Company’s primary business, and related insurance products such as homeowners, commercial automobile and commercial property. These related insurance products are primarily sold to the Company’s individual customers and small business customers, which increases retention of the Company’s private passenger automobile client base. The insurance products comprising the Property and Casualty Lines business segment are sold through the same distribution channels, mainly through independent and 100% owned insurance agents, and go through a similar underwriting process. Other Lines The Other Lines business segment represents an operating segment that does not meet the quantitative thresholds required to be considered a reportable segment. This operating segment offers automobile mechanical protection warranties which are primarily sold through automobile dealerships and credit unions. The following tables present the Company's operating results by reportable segment: Three Months Ended September 30, 2026 2025 Property &Casualty Other Total Property &Casualty Other Total (Amounts in millions) Net premiums earned $ 1,538.1 $ 7.3 $ 1,545.4 $ 1,403.0 $ 7.4 $ 1,410.4 Less: Losses 853.2 3.3 856.5 735.3 3.8 739.1 Loss adjustment expenses 159.5 0.6 160.1 143.2 0.5 143.7 Losses and loss adjustment expenses 1,012.7 3.9 1,016.6 878.5 4.3 882.8 Policy acquisition costs 256.6 2.7 259.3 231.8 4.4 236.2 Other operating expenses 117.3 0.9 118.2 107.6 0.9 108.5 Underwriting gain (loss) 151.5 (0.2) 151.3 185.1 (2.2) 182.9 Investment income 93.3 84.0 Net realized investment (losses) gains (261.9) 84.5 Other income 4.6 6.1 Interest expense (10.2) (7.2) Pre-tax (loss) income $ (22.9) $ 350.3 Net (loss) income $ (13.7) $ 280.4 25
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Table of Contents Nine Months Ended September 30, 2026 2025 Property &Casualty Other Total Property &Casualty Other Total (Amounts in millions) Net premiums earned $ 4,473.6 $ 21.9 $ 4,495.5 $ 4,038.1 $ 22.1 $ 4,060.2 Less: Losses 2,469.4 10.6 2,480.0 2,594.2 11.4 2,605.6 Loss adjustment expenses 441.3 1.5 442.8 436.5 1.5 438.0 Losses and loss adjustment expenses 2,910.7 12.1 2,922.8 3,030.7 12.9 3,043.6 Policy acquisition costs 741.8 8.3 750.1 682.6 10.2 692.8 Other operating expenses 362.5 2.5 365.0 281.7 2.3 284.0 Underwriting gain (loss) 458.6 (1.0) 457.6 43.1 (3.3) 39.8 Investment income 268.7 244.2 Net realized investment (losses) gains (180.0) 131.3 Other income 18.7 21.1 Interest expense (24.9) (21.6) Pre-tax income $ 540.1 $ 414.8 Net income $ 440.2 $ 338.5 The following tables present the Company’s net premiums earned and direct premiums written by reportable segment and line of insurance business: Three Months Ended September 30, 2026 2025 Property &Casualty Other Total Property &Casualty Other Total (Amounts in millions) Private passenger automobile $ 935.2 $ — $ 935.2 $ 900.0 $ — $ 900.0 Homeowners 410.8 — 410.8 334.2 — 334.2 Commercial automobile 107.1 — 107.1 96.1 — 96.1 Other 85.0 7.3 92.3 72.7 7.4 80.1 Net premiums earned $ 1,538.1 $ 7.3 $ 1,545.4 $ 1,403.0 $ 7.4 $ 1,410.4 Private passenger automobile $ 967.2 $ — $ 967.2 $ 919.9 $ — $ 919.9 Homeowners 511.1 — 511.1 446.6 — 446.6 Commercial automobile 107.0 — 107.0 91.8 — 91.8 Other 106.1 6.2 112.3 96.6 6.8 103.4 Direct premiums written $ 1,691.4 $ 6.2 $ 1,697.6 $ 1,554.9 $ 6.8 $ 1,561.7 26
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Table of Contents Nine Months Ended September 30, 2026 2025 Property &Casualty Other Total Property &Casualty Other Total (Amounts in millions) Private passenger automobile $ 2,751.4 $ — $ 2,751.4 $ 2,646.0 $ — $ 2,646.0 Homeowners 1,162.2 — 1,162.2 907.1 — 907.1 Commercial automobile 306.9 — 306.9 287.3 — 287.3 Other 253.1 21.9 275.0 197.7 22.1 219.8 Net premiums earned $ 4,473.6 $ 21.9 $ 4,495.5 $ 4,038.1 $ 22.1 $ 4,060.2 Private passenger automobile $ 2,821.1 $ — $ 2,821.1 $ 2,707.9 $ — $ 2,707.9 Homeowners 1,428.9 — 1,428.9 1,225.3 — 1,225.3 Commercial automobile 336.0 — 336.0 292.2 — 292.2 Other 288.3 19.6 307.9 245.1 21.7 266.8 Direct premiums written $ 4,874.3 $ 19.6 $ 4,893.9 $ 4,470.5 $ 21.7 $ 4,492.2 27
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Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. Certain statements contained in this report are forward-looking statements based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that future developments affecting the Company will be those anticipated by the Company. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve significant risks and uncertainties (some of which are beyond the control of the Company) and are subject to change based upon various factors, including but not limited to the following risks and uncertainties: changes in the demand for the Company’s insurance products, inflation and general economic conditions, including general market risks associated with the Company’s investment portfolio; the accuracy and adequacy of the Company’s pricing methodologies; catastrophes in the markets served by the Company; uncertainties related to estimates, assumptions and projections generally; the possibility that actual loss experience may vary adversely from the actuarial estimates made to determine the Company’s loss reserves in general, including subrogation recovery estimates; the Company’s ability to obtain and the timing of the approval of premium rate changes for insurance policies issued in the states where it operates; legislation adverse to the automobile or homeowners insurance industry or business generally that may be enacted in the states where the Company operates; the Company’s success in managing its business in non-California states; the presence of competitors with greater financial resources and the impact of competitive pricing and marketing efforts; the Company's ability to successfully allocate the resources used in the states with reduced or exited operations to its operations in other states; changes in driving patterns and loss trends; acts of war and terrorist activities; effects of changing climate conditions; pandemics, epidemics, widespread health emergencies, or outbreaks of infectious diseases; court decisions and trends in litigation and health care and auto repair costs; changes in global trade policies, including trade barriers or restrictions; and legal, cybersecurity, regulatory and litigation risks. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For a more detailed discussion of some of the foregoing risks and uncertainties, see the Company’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the "SEC") on February 17, 2026. OVERVIEW A. General The operating results of property and casualty insurance companies are subject to significant quarter-to-quarter and year-to-year fluctuations due to the effect of competition on pricing, the frequency and severity of losses, the effect of weather and natural disasters on losses, general economic conditions, the general regulatory environment in states in which an insurer operates, state regulation of insurance including premium rates, changes in fair value of investments, and other factors such as changes in tax laws. The property and casualty insurance industry has been highly cyclical, with periods of high premium rates and shortages of underwriting capacity followed by periods of severe price competition and excess capacity. These cycles can have a significant impact on the Company’s ability to grow and retain business. This section discusses some of the relevant factors that management considers in evaluating the Company’s performance, prospects, and risks. It is not all-inclusive and is meant to be read in conjunction with the entirety of management’s discussion and analysis, the Company’s consolidated financial statements and notes thereto, and all other items contained within this Quarterly Report on Form 10-Q. B. Business The Company is primarily engaged in writing personal automobile insurance through 12 insurance subsidiaries (“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, pricing and claims handling processes that, together with its agent relationships, provide the Company with competitive advantages. 28
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Table of Contents The following tables present direct premiums written, by state and line of insurance business, for the nine months ended September 30, 2026 and 2025: Nine Months Ended September 30, 2026 (Dollars in thousands) PrivatePassenger Automobile Homeowners CommercialAutomobile Other Lines Total California $ 2,461,042 $ 1,032,289 $ 272,404 $ 295,821 $ 4,061,556 83.0 % Texas 98,051 185,955 43,751 3,592 331,349 6.8 % Other states 262,016 210,653 19,832 8,514 501,015 10.2 % Total $ 2,821,109 $ 1,428,897 $ 335,987 $ 307,927 $ 4,893,920 100.0 % 57.6 % 29.2 % 6.9 % 6.3 % 100.0 % Nine Months Ended September 30, 2025 (Dollars in thousands) PrivatePassenger Automobile Homeowners CommercialAutomobile Other Lines Total California $ 2,316,816 $ 869,239 $ 224,075 $ 253,850 $ 3,663,980 81.5 % Texas 93,924 173,162 44,429 5,304 316,819 7.1 % Other states 297,122 182,872 23,654 7,720 511,368 11.4 % Total $ 2,707,862 $ 1,225,273 $ 292,158 $ 266,874 $ 4,492,167 100.0 % 60.3 % 27.3 % 6.5 % 5.9 % 100.0 % ______________ No individual state accounted for more than 5% of total direct premiums written. No individual line of insurance business accounted for more than 5% of total direct premiums written. C. Regulatory and Legal Matters The DOI in each state in which the Company operates is responsible for conducting periodic financial, market conduct, and rating and underwriting examinations of the Insurance Companies in their states. Market conduct examinations typically review compliance with insurance statutes and regulations with respect to rating, underwriting, claims handling, billing, and other practices. The following table presents a summary of recent and upcoming examination: State Exam Type Exam Period Covered Status CA, FL,GA, IL,OK, TX Coordinated Multi-state Financial 2022-2025 Examination began in the second quarter of 2026. During the course of and at the conclusion of the examinations, the examining DOI generally reports findings to the Company. No material findings have been communicated to the Company related to the coordinated financial examination noted above. In late 2024, as part of the California insurance commissioner’s “Sustainable Insurance Strategy,” the California DOI issued two regulations that may impact how insurers price and write certain of their California property insurance policies: one allowing insurers to incorporate catastrophe modeling into rate-making with a requirement for them to align their share of insured properties in distressed wildfire-prone areas of the state to at least 85% of their state-wide market share or to increase their share by 5% in a two-year period; and the other allowing insurers to incorporate reinsurance costs into rate-making for certain specific catastrophe perils and wildfire exposures when meeting the same requirement governing the use of catastrophe modeling. The California insurance commissioner has also implemented changes to the California FAIR Plan, expanding coverage offerings and changing the assessment and recoupment processes in order to enhance market stability: the FAIR Plan’s member insurers may now request the California insurance commissioner’s prior approval to collect temporary supplemental fees from their own policyholders in order to recoup up to 50% of amounts assessed up to $1 billion in aggregate assessments in the industry and 100% of all amounts assessed over that $1 billion threshold for each of personal and (2) (1) (2) (1) (1) (2) 29
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Table of Contents commercial lines of insurance business, and 100% of all amounts assessed over $2 billion in aggregate assessments in the industry for the combined personal and commercial lines of insurance business. In December 2025, the California DOI approved the Company's rate application, which incorporates catastrophe modeling and reinsurance costs into its ratemaking in accordance with the new regulations. The new rating plan became effective in July 2026 and the Company will adhere to the market-share requirements. In January 2025, the California DOI approved a 12% rate increase on the California homeowners line of insurance business. This rate increase became effective in March 2025. In December 2025, the California DOI approved a 6.9% rate increase on the California homeowners line of insurance business. This rate increase became effective in July 2026. The California homeowners line of insurance business represented approximately 18% of the Company's total net premiums earned for the nine months ended September 30, 2026. In addition, the Company filed an application with the California DOI in August 2026 for a rate increase of approximately 5.7% on the California private passenger automobile line of insurance business with a July 2027 effective date. The California private passenger automobile line of insurance business represented approximately 52% of the Company's total net premiums earned for the nine months ended September 30, 2026. The Company is, from time to time, named as a defendant in various lawsuits or regulatory actions incidental to its insurance business. The majority of lawsuits brought against the Company relate to insurance claims that arise in the normal course of business and are reserved for through the reserving process. For a discussion of the Company’s reserving methods, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company establishes reserves for non-insurance claims related lawsuits, regulatory actions, and other contingencies when the Company believes a loss is probable and is able to estimate its potential exposure. For loss contingencies believed to be reasonably possible, the Company also discloses the nature of the loss contingency and an estimate of the possible loss, range of loss, or a statement that such an estimate cannot be made. In addition, the Company accrues for anticipated legal defense costs associated with such lawsuits and regulatory actions. While actual losses may differ from the amounts recorded and the ultimate outcome of the Company's pending actions is generally not yet determinable, the Company does not believe that the ultimate resolution of currently pending legal or regulatory proceedings, either individually or in the aggregate, will have a material adverse effect on its financial condition or cash flows. In all cases, the Company vigorously defends itself unless a reasonable settlement appears appropriate. For a discussion of any additional regulatory or legal matters, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. D. Critical Accounting Estimates Loss and Loss Adjustment Expense Reserves ("Loss Reserves") Preparation of the Company’s consolidated financial statements requires management’s judgment and estimates. The most significant is the estimate of loss reserves. Estimating loss reserves is a difficult process as many factors can ultimately affect the final settlement of a claim and, therefore, the loss reserve that is required. A key assumption in estimating loss reserves is the degree to which the historical data used to analyze reserves will be predictive of ultimate claim costs on incurred claims. Changes in the regulatory and legal environments, results of litigation, medical costs, the cost of repair materials, and labor rates, among other factors, can impact this assumption. In addition, time can be a critical part of reserving determinations since the longer the span between the incidence of a loss and the payment or settlement of a claim, the more variable the ultimate settlement amount could be. Accordingly, short-tail claims, such as property damage claims, tend to be more reasonably predictable than long-tail liability claims. The Company calculates a loss reserve point estimate rather than a range. There is inherent uncertainty with estimates and this is particularly true with loss reserve estimates. This uncertainty comes from many factors which may include changes in claims reporting and settlement patterns, changes in the regulatory and legal environments, uncertainty over inflation rates, and uncertainty for unknown items. The Company does not make specific provisions for these uncertainties, rather it considers them in establishing its loss reserve by reviewing historical patterns and trends and projecting these out to current loss reserves. The underlying factors and assumptions that serve as the basis for preparing the loss reserve estimate include paid and incurred loss development factors, expected average costs per claim, inflation trends, expected loss ratios, industry data, and other relevant information. The Company also engages independent actuarial consultants to review the Company’s loss reserves and to provide the annual actuarial opinions under statutory accounting principles as required by state regulation. The Company analyzes loss reserves quarterly primarily using the incurred loss method, paid loss method, and average severity method coupled with the 30
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Table of Contents claim count development method, as described below. When deciding among methods to use, the Company evaluates the credibility of each method based on the maturity of the data available and the claims settlement practices for each particular line of insurance business or coverage within a line of insurance business. The Company may also evaluate qualitative factors such as known changes in laws or legal rulings that could affect claims handling or other external environmental factors or internal factors that could affect the settlement of claims. When establishing the loss reserve, the Company will generally analyze the results from all of the methods used rather than relying on a single method. While these methods are designed to determine the ultimate losses on claims under the Company’s policies, there is inherent uncertainty in all actuarial models since they use historical data to project outcomes. The Company believes that the techniques it uses provide a reasonable basis in estimating loss reserves. • The incurred loss method analyzes historical incurred case loss (case reserves plus paid losses) development to estimate ultimate losses. The Company applies development factors against current case incurred losses by accident period to calculate ultimate expected losses. The Company believes that the incurred loss method provides a reasonable basis for evaluating ultimate losses, particularly in the Company’s larger, more established lines of insurance business which have a long operating history. • The paid loss method analyzes historical payment patterns to estimate the amount of losses yet to be paid. • The average severity method analyzes historical loss payments and/or incurred losses divided by closed claims and/or total claims to calculate an estimated average cost per claim. From this, the expected ultimate average cost per claim can be estimated. The average severity method coupled with the claim count development method provide meaningful information regarding inflation and frequency trends that the Company believes is useful in establishing loss reserves. The claim count development method analyzes historical claim count development to estimate future incurred claim count development for current claims. The Company applies these development factors against current claim counts by accident period to calculate ultimate expected claim counts. The Company analyzes catastrophe losses separately from non-catastrophe losses. The Company classifies certain losses as catastrophe losses based on catastrophe events designated by Property Claim Services, a unit of Insurance Services Office, Inc. For catastrophe losses, the Company generally determines claim counts based on claims reported and development expectations from previous catastrophes and applies an average expected loss per claim based on loss reserves established by adjusters and average losses on previous similar catastrophes. For catastrophe losses that are considered “total losses” where the entire dwelling was destroyed, the Company primarily estimates losses based on the expected amounts to be paid out on the policy limits. Homeowners policies have multiple coverages, including dwelling, additional replacement costs, additional living expenses, and personal property, and on a typical total loss, many, but not all, of the various coverage limits are exhausted. It can take up to five years or longer for total loss claims to close, and the Company will reevaluate its total loss estimates periodically based on many factors, including estimated costs to rebuild if a decision was made to rebuild, actual rebuilding costs incurred, estimated time to rebuild, value of personal belongings destroyed, expected duration for the homeowner to be displaced, and demand surge. In addition, subrogation may play an important role in the catastrophe loss estimate. For additional discussion on subrogation, see disclosures on the Palisades and Eaton wildfires in Note 10. Loss and Loss Adjustment Expense Reserves, of the Notes to Consolidated Financial Statements. At September 30, 2026 and December 31, 2025, the Company recorded its point estimate of approximately $3.75 billion and $3.63 billion ($3.72 billion and $3.60 billion, net of reinsurance), respectively, in loss reserves, which included approximately $2.33 billion and $2.12 billion ($2.33 billion and $2.12 billion, net of reinsurance), respectively, of incurred but not reported loss reserves (“IBNR”). IBNR includes estimates, based upon past experience, of ultimate developed costs, which may differ from case estimates, unreported claims that occurred on or prior to September 30, 2026 and December 31, 2025, and estimated future payments for reopened claims. Management believes that the liability for loss reserves is adequate to cover the ultimate net cost of losses and loss adjustment expenses incurred to date; however, since the provisions are necessarily based upon estimates, the ultimate liability may be more or less than such provisions. The Company evaluates its loss reserves quarterly. When management determines that the estimated ultimate claim cost requires a decrease for previously reported accident years, favorable development occurs and a reduction in losses and loss adjustment expenses is reported in the current period. If the estimated ultimate claim cost requires an increase for previously reported accident years, unfavorable development occurs and an increase in losses and loss adjustment expenses is reported in the current period. For a further discussion of the Company’s reserving methods, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. 31
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Table of Contents RESULTS OF OPERATIONS Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025 Revenues Net premiums earned and net premiums written for the three months ended September 30, 2026 increased 9.6% and 9.2%, respectively, from the corresponding period in 2025. The increases in net premiums earned and net premiums written were primarily due to a rate increase in the California homeowners line of insurance business and increases in the number of policies written in the California automobile and homeowners lines of insurance business. Net premiums earned included ceded premiums earned of $61.6 million and $63.2 million for the three months ended September 30, 2026 and 2025, respectively. Net premiums written included ceded premiums written of $62.0 million and $63.5 million for the three months ended September 30, 2026 and 2025, respectively. The decreases in ceded premiums earned and ceded premiums written resulted mostly from a decrease in the annual reinsurance premium under the Treaty ending June 30, 2027 compared to the Treaty ended June 30, 2026 due to lower reinsurance rates reflecting increased capacity in the overall reinsurance market. Net premiums earned, a GAAP measure, represents the portion of net premiums written that is recognized as revenue in the financial statements for the periods presented and earned on a pro-rata basis over the term of the policies. Net premiums written is a non-GAAP financial measure which represents the premiums charged on policies issued during a fiscal period, net of any applicable reinsurance. Net premiums written is a statutory measure designed to determine production levels. The following is a reconciliation of net premiums earned to net premiums written: Three Months Ended September 30, 2026 2025 (Amounts in thousands) Net premiums earned $ 1,545,368 $ 1,410,400 Change in net unearned premiums 90,765 88,461 Net premiums written $ 1,636,133 $ 1,498,861 Expenses Loss and expense ratios are used to interpret the underwriting experience of property and casualty insurance companies. The following table presents the Insurance Companies’ loss, expense, and combined ratios determined in accordance with GAAP: Three Months Ended September 30, 2026 2025 Loss ratio 65.8 % 62.6 % Expense ratio 24.4 % 24.4 % Combined ratio 90.2 % 87.0 % Loss ratio is calculated by dividing losses and loss adjustment expenses by net premiums earned. The loss ratio for the third quarter of 2026 and 2025 was affected by favorable development of approximately $58 million and $27 million, respectively, on prior accident years' loss and loss adjustment expense reserves. The favorable development for the third quarters of 2026 and 2025 was primarily attributable to lower than estimated losses and loss adjustment expenses in the automobile line of insurance business. In addition, the 2026 loss ratio was negatively impacted by approximately $19 million of catastrophe losses net of reinsurance, excluding unfavorable development of approximately $4 million on prior years' catastrophe losses, primarily due to storms in Oklahoma and Texas. The 2025 loss ratio was negatively impacted by approximately $33 million of catastrophe losses, excluding favorable development of approximately $4 million on prior years' catastrophe losses, primarily due to an increase in estimated net losses and loss adjustment expenses on the Palisades and Eaton wildfires in the third quarter of 2025. Excluding the effects of estimated prior accident years’ loss development and catastrophe losses, the loss ratio was 68.3% 32
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Table of Contents and 62.2% for the third quarter of 2026 and 2025, respectively. The increase in the loss ratio was primarily due to an increase in loss severity in the private passenger automobile line of insurance business, partially offset by a rate increase in the California homeowners line of insurance business. Expense ratio is calculated by dividing the sum of policy acquisition costs and other operating expenses by net premiums earned. The expense ratio for the three months ended September 30, 2026 did not change from the corresponding period in 2025. Combined ratio is equal to loss ratio plus expense ratio and is the key measure of underwriting performance traditionally used in the property and casualty insurance industry. A combined ratio under 100% generally reflects profitable underwriting results, and a combined ratio over 100% generally reflects unprofitable underwriting results. Income tax (benefit) expense was $(9.2) million and $69.9 million for the three months ended September 30, 2026 and 2025, respectively. The decrease in income tax expense was primarily due to a $373.2 million decrease in total pre-tax income. The Company’s effective income tax rate can be affected by several factors. These generally relate to large changes in the composition of fully taxable income, including net realized investment gains or losses, tax-exempt investment income, non-deductible expenses, and periodically, non-routine tax items such as adjustments to unrecognized tax benefits related to tax uncertainties. Income tax benefit of $9.2 million on pre-tax loss of $22.9 million, including tax-exempt investment income of $37.9 million, resulted in an effective tax rate of 40.2%, above the statutory tax rate of 21%, for the three months ended September 30, 2026, and income tax expense of $69.9 million on pre-tax income of $350.3 million, including tax-exempt investment income of $26.5 million, resulted in an effective tax rate of 20.0%, below the statutory tax rate, for the corresponding period in 2025. Investments The following table presents the investment results of the Company: Three Months Ended September 30, 2026 2025 (Dollars in thousands) Average invested assets at cost $ 7,227,738 $ 6,135,816 Net investment income Before income taxes $ 93,339 $ 83,970 After income taxes $ 79,987 $ 70,745 Average annual yield on investments Before income taxes 4.5 % 4.6 % After income taxes 3.9 % 4.0 % Net realized investment (losses) gains $ (261,947) $ 84,451 __________ 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. Net investment income includes approximately $12.0 million and $12.9 million of interest income earned on cash (approximately $9.5 million and $10.2 million after tax) for the three months ended September 30, 2026 and 2025, respectively. Average annual yield on investments does not include interest income earned on cash. Higher net investment income before and after income taxes for the three months ended September 30, 2026 compared to the corresponding period in 2025 resulted largely from higher average invested assets, partially offset by decreases in average annual yield on investments and interest income earned on cash before and after taxes. Average annual yield on investments before income taxes decreased, primarily due to an increase in tax-exempt investments with lower pre-tax yields combined with lower yields on floating rate investments resulting from lower short-term market interest rates, partially offset by higher yields on long-term investments. Average annual yield on investments after incometaxes decreased, primarily due to lower yields on floating rate investments resulting from lower short-term market interest rates, partially offset by higher yields on long-term investments. (1) (2) (3) (2) (3) (1) (2) (3) 33
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Table of Contents The following tables present the components of net realized investment gains or losses included in net (loss) income: Three Months Ended September 30, 2026 Gains (Losses) Recognized in Net Loss Sales Changes in fair value Total (Amounts in thousands) Net realized investment gains (losses) Fixed maturity securities $ (2,038) $ (241,342) $ (243,380) Equity securities (2,783) (21,873) (24,656) Short-term investments — 5 5 Note receivable — (50) (50) Options sold 5,738 396 6,134 Total $ 917 $ (262,864) $ (261,947) Three Months Ended September 30, 2025 Gains (Losses) Recognized in Net Income Sales Changes in fair value Total (Amounts in thousands) Net realized investment gains (losses) Fixed maturity securities $ 390 $ 38,734 $ 39,124 Equity securities 16,479 26,615 43,094 Short-term investments — 4 4 Notes receivable — (387) (387) Options sold 2,207 409 2,616 Total $ 19,076 $ 65,375 $ 84,451 __________ The changes in fair value of the investment portfolio and notes receivable resulted from application of the fair value option. The decrease in fair value of fixed maturity securities for the third quarter of 2026 primarily resulted from increases in overall market interest rates. The increase in fair value of fixed maturity securities for the third quarter of 2025 primarily resulted from decreases in overall market interest rates. The decrease in fair value of equity securities for the third quarter of 2026 primarily resulted from the decline in equity markets associated with the Company's equity securities. The increase in fair value of equity securities for the third quarter of 2025 primarily resulted from the overall improvement in equity markets Net (Loss) Income Three Months Ended September 30, 2026 2025 (Amounts in thousands, except per share data) Net (loss) income $ (13,685) $ 280,403 Basic average shares outstanding 55,389 55,389 Diluted average shares outstanding 55,389 55,389 Basic Per Share Data: Net (loss) income $ (0.25) $ 5.06 Net realized investment (losses) gains, net of tax $ (3.74) $ 1.20 Diluted Per Share Data: Net (loss) income $ (0.25) $ 5.06 Net realized investment (losses) gains, net of tax $ (3.74) $ 1.20 (1) (2) (1) (3) (1) (1) (1) (2) (1) (3) (1) (1) (1) (2) (3) 34
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Table of Contents Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025 Revenues Net premiums earned and net premiums written for the nine months ended September 30, 2026 increased 10.7% and 10.5%, respectively, from the corresponding period in 2025. The increases in net premiums earned and net premiums written were primarily due to rate increases in the California homeowners line of insurance business and increases in the number of policies written in the California automobile and homeowners lines of insurance business, combined with decreases in ceded premiums earned and ceded premiums written. Net premiums earned included ceded premiums earned of $186.8 million and $224.3 million for the nine months ended September 30, 2026 and 2025, respectively. Net premiums written included ceded premiums written of $187.1 million and $224.2 million for the nine months ended September 30, 2026 and 2025, respectively. The decreases in ceded premiums earned and written resulted mostly from reinstatement premiums earned and written of $101 million in the first half of 2025 under the Treaty ended June 30, 2025 related to reinstating the fully exhausted reinsurance coverage layers following the Palisades and Eaton wildfires, partially offset by an increase in the annual reinsurance premium under the Treaty ended June 30, 2026 compared to the Treaty ended June 30, 2025 due to higher reinsurance coverage and rates and growth in the covered book of business. The following is a reconciliation of net premiums earned to net premiums written: Nine Months Ended September 30, 2026 2025 (Amounts in thousands) Net premiums earned $ 4,495,548 $ 4,060,208 Change in net unearned premiums 249,749 233,840 Net premiums written $ 4,745,297 $ 4,294,048 Expenses The following table presents the Insurance Companies’ loss, expense, and combined ratios determined in accordance with GAAP: Nine Months Ended September 30, 2026 2025 Loss ratio 65.0 % 75.0 % Expense ratio 24.8 % 24.1 % Combined ratio 89.8 % 99.0 % __________ Combined ratio for the nine months ended September 30, 2025 does not sum due to rounding. The loss ratio for the nine months ended September 30, 2026 and 2025 was affected by favorable development of approximately $102 million and $74 million, respectively, on prior accident years' loss and loss adjustment expense reserves. The favorable development for the nine months ended September 30, 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. The favorable development for the nine months ended September 30, 2025 was primarily attributable to lower than estimated losses and loss adjustment expenses in the automobile and homeowners lines of insurance business. In addition, the 2026 loss ratio was negatively impacted by approximately $126 million of catastrophe losses net of reinsurance, excluding unfavorable development of approximately $65 million on prior years' catastrophe losses largely related to the Palisades and Eaton wildfires, primarily due to storms in Oklahoma and Texas. The 2025 loss ratio was negatively impacted by approximately $507 million of catastrophe losses, excluding favorable development of approximately $18 million on prior years' catastrophe losses, primarily due to the Palisades and Eaton wildfires in California and storms in Texas and Oklahoma. (1) 35
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Table of Contents Excluding the effects of estimated prior accident years’ loss development and catastrophe losses, the loss ratio was 64.5% and 64.3% for the nine months ended September 30, 2026 and 2025, respectively. The increase in the loss ratio was primarily due to an increase in loss severity in the private passenger automobile line of insurance business, mostly offset by rate increases in the California homeowners line of insurance business and the decrease in ceded premiums earned that is discussed above. The expense ratio for the nine months ended September 30, 2026 increased from the corresponding period in 2025, which was largely attributable to increases in profitability-based accruals, partially offset by the rate increases and the decrease in ceded premiums earned that are discussed above. Income tax expense was $99.9 million and $76.2 million for the nine months ended September 30, 2026 and 2025, respectively. The increase in income tax expense was primarily due to a $125.3 million increase in total pre-tax income. Income tax expense of $99.9 million on pre-tax income of $540.1 million, including tax-exempt investment income of $104.1 million, resulted in an effective tax rate of 18.5%, below the statutory tax rate of 21%, for the nine months ended September 30, 2026, and income tax expense of $76.2 million on pre-tax income of $414.8 million, including tax-exempt investment income of $70.1 million, resulted in an effective tax rate of 18.4% for the corresponding period in 2025. Investments The following table presents the investment results of the Company: Nine Months Ended September 30, 2026 2025 (Dollars in thousands) Average invested assets at cost $ 6,924,365 $ 5,840,849 Net investment income Before income taxes $ 268,738 $ 244,208 After income taxes $ 229,469 $ 204,616 Average annual yield on investments Before income taxes 4.5 % 4.7 % After income taxes 3.9 % 4.0 % Net realized investment (losses) gains $ (179,977) $ 131,251 __________ 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. Net investment income includes approximately $35.1 million and $38.4 million of interest income earned on cash (approximately $27.7 million and $30.4 million after tax) for the nine months ended September 30, 2026 and 2025, respectively. Average annual yield on investments does not include interest income earned on cash. Higher net investment income before and after income taxes for the nine months ended September 30, 2026 compared to the corresponding period in 2025 resulted largely from higher average invested assets, partially offset by decreases in average annual yield on investments and interest income earned on cash before and after taxes. Average annual yield on investments before income taxes decreased, primarily due to an increase in tax-exempt investments with lower pre-tax yields combined with lower yields on floating rate investments resulting from lower short-term market interest rates. Average annual yield on investments after income taxes decreased, primarily due to lower yields on floatingrate investments resulting from lower short-term market interest rates. (1) (2) (3) (2) (3) (1) (2) (3) 36
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Table of Contents The following tables present the components of net realized investment gains or losses included in net income: Nine Months Ended September 30, 2026 Gains (Losses) Recognized in Net Income Sales Changes in fair value Total (Amounts in thousands) Net realized investment gains (losses) Fixed maturity securities $ (11,292) $ (235,425) $ (246,717) Equity securities 45,197 7,083 52,280 Short-term investments — 10 10 Note receivable — (173) (173) Options sold 14,344 279 14,623 Total $ 48,249 $ (228,226) $ (179,977) Nine Months Ended September 30, 2025 Gains (Losses) Recognized in Net Income Sales Changes in fair value Total (Amounts in thousands) Net realized investment gains (losses) Fixed maturity securities $ (16,775) $ 47,718 $ 30,943 Equity securities 76,671 19,106 95,777 Short-term investments — (6) (6) Notes receivable — 213 213 Options sold 4,907 (583) 4,324 Total $ 64,803 $ 66,448 $ 131,251 __________ The changes in fair value of the investment portfolio and notes receivable resulted from application of the fair value option. The decrease in fair value of fixed maturity securities for the nine months ended September 30, 2026 primarily resulted from increases in overall market interest rates. The increase in fair value of fixed maturity securities for the nine months ended September 30, 2025 primarily resulted from decreases in overall market interest rates. The increases in fair value of equity securities for the nine months ended September 30, 2026 and 2025 primarily resulted from the overall improvement in equity markets. Net Income Nine Months Ended September 30, 2026 2025 (Amounts in thousands, except per share data) Net income $ 440,237 $ 338,547 Basic average shares outstanding 55,389 55,389 Diluted average shares outstanding 55,389 55,389 Basic Per Share Data: Net income $ 7.95 $ 6.11 Net realized investment (losses) gains, net of tax $ (2.57) $ 1.87 Diluted Per Share Data: Net income $ 7.95 $ 6.11 Net realized investment (losses) gains, net of tax $ (2.57) $ 1.87 (1) (2) (1) (3) (1) (1) (1) (2) (1) (3) (1) (1) (1) (2) (3) 37
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Table of Contents LIQUIDITY AND CAPITAL RESOURCES A. Cash Flows The Company has generated positive cash flow from operations in each full year since the public offering of its common stock in November 1985. The Company does not attempt to match the duration and timing of asset maturities with those of liabilities; rather, it manages its portfolio with a view towards maximizing total return with an emphasis on after-tax income. With combined cash and short-term investments of $1,531.9 million at September 30, 2026, the Company believes its cash flow from future operations is adequate to satisfy its liquidity requirements. Investment maturities are also available to meet the Company’s liquidity needs. However, the Company operates in a rapidly evolving and often unpredictable business environment that may change the timing or amount of expected future cash receipts and expenditures. Accordingly, there can be no assurance that the Company’s sources of funds will be sufficient to meet its liquidity needs or that the Company will not be required to raise additional funds to meet those needs or for future business expansion, through the sale of equity or debt securities or from credit facilities with lending institutions. Net cash provided by operating activities for the nine months ended September 30, 2026 was $930.7 million, an increase of $131.4 million from the corresponding period in 2025. The increase was primarily due to an increase in premium collections and a decrease in payments for losses and loss adjustment expenses, net of reinsurance, partially offset by increases in payments for income taxes and operating expenses. The Company utilized the cash provided by operating activities during the nine months ended September 30, 2026 primarily for the net purchases of investment securities and payment of dividends to its shareholders. The following table presents the estimated fair value of fixed maturity securities at September 30, 2026 by contractual maturity in the next five years: Fixed Maturity Securities (Amounts in thousands) Due in one year or less $ 216,637 Due after one year through two years 129,522 Due after two years through three years 173,130 Due after three years through four years 276,081 Due after four years through five years 116,984 Total due within five years $ 912,354 B. Reinsurance For California homeowners policies, the Company has reduced its catastrophe exposure from earthquakes by placing earthquake risks directly with the California Earthquake Authority ("CEA"). However, the Company continues to have catastrophe exposure to fires following an earthquake. The Company is the assuming reinsurer under a Catastrophe Portfolio Participation Reinsurance Contract (the "Contract") effective through December 31, 2028. The Company reimburses a group of affiliates of a ceding company for a proportional share of a portfolio of catastrophe losses based on the premiums ceded to the Company under the Contract, to the extent the actual loss ratio exceeds the threshold loss ratio of 73.5%. The total assumed premium under the Contract is $15.0 million for each of the 12-month periods ending December 31, 2025 through 2028. The total possible amount of losses for the Company under the Contract is $30.0 million for each of the 12-month periods ending December 31, 2025 through 2028. The Company recognized incurred losses of approximately $(2.5) million and $(0.8) million for the nine months ended September 30, 2026 and 2025, respectively, under the Contract. The negative incurred losses for the nine months ended September 30, 2026 and 2025 resulted primarily from favorable development on prior years' catastrophe losses that were ceded to the Company under the Contract. The Company is the assuming reinsurer under a Property Quota Share Reinsurance Contract ("Quota Share Contract") effective through December 31, 2026 and reimburses ceding companies for a proportional share of losses based on the premiums ceded to the Company under the Quota Share Contract. The total annual assumed premium under the Quota Share Contract is approximately $17 million and $11 million for the 12 months ending December 31, 2026 and 2025, respectively. The total annual possible amount of losses that can be ceded to the Company under the Quota Share Contract is approximately $60 million and $32 million for the 12 months ending December 31, 2026 and 2025, respectively. The Company recognized 38
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Table of Contents incurred losses of approximately $10.3 million and $6.2 million for the nine months ended September 30, 2026 and 2025, respectively, under the Quota Share Contract. The Company is the assuming reinsurer under a Catastrophe Quota Share Reinsurance Agreement ("Quota Share Agreement") effective through December 31, 2026 and reimburses ceding companies for a proportional share of losses based on the premiums ceded to the Company under the Quota Share Agreement. The total assumed premium under the Quota Share Agreement is approximately $5 million for the 12 months ending December 31, 2026. The total possible amount of losses for the Company under the Quota Share Agreement is approximately $12 million for the 12 months ending December 31, 2026. The Company recognized incurred losses of approximately $2.9 million for nine months ended September 30, 2026 under the Quota Share Agreement. The Quota Share Agreement commenced on January 1, 2026. The Company is the ceding party to a Catastrophe Reinsurance Treaty (the "Treaty") covering a wide range of perils that is effective through June 30, 2027. For the 12 months ending June 30, 2027 and 2026, the Treaty provides approximately $2,790 million and $2,140 million of coverage, respectively, on a per occurrence basis after covered catastrophe losses exceed the Company retention limit of $200 million. The Treaty ending June 30, 2027 and 2026 each excludes coverage for any Florida business and for California earthquake losses on fixed property policies such as homeowners, but does cover losses from fires following an earthquake. The Treaty ending June 30, 2027 and 2026 each includes additional restrictions as noted below. Coverage terms and conditions also vary among various participants in different layers of coverage. Coverage on individual catastrophes provided for the 12 months ending June 30, 2027 under the Treaty is presented below in various layers: Catastrophe Losses and LAE In Excess of Up to Percentage ofCoverage (Amounts in millions) Retained $ — $ 200 — % Layer of Coverage 200 400 95.0 Layer of Coverage 400 1,600 100.0 Layer of Coverage 1,600 1,750 100.0 Layer of Coverage 1,750 2,000 100.0 Layer of Coverage 2,000 3,000 100.0 __________ Layer of Coverage represents multiple actual treaty layers that are grouped for presentation purposes. The coverage of this layer is provided by a catastrophe bond that is in effect from July 15, 2025 through July 14, 2028. This layer is not subject to reinstatement. 60% of this layer is provided by a catastrophe bond that is in effect from July 1, 2026 through June 30, 2029, with the remaining provided by traditional reinsurers at equivalent terms. This layer is not subject to reinstatement. Coverage on individual catastrophes provided for the 12 months ended June 30, 2026 under the Treaty is presented below in various layers: Catastrophe Losses and LAE In Excess of Up to Percentage ofCoverage (Amounts in millions) Retained $ — $ 200 — % Layer of Coverage 200 300 90.0 Layer of Coverage 300 1,600 100.0 Layer of Coverage 1,600 1,750 100.0 Layer of Coverage 1,750 2,350 100.0 __________ 10% of this layer is not subject to reinstatement. The percent of coverage of 90% noted for this layer is for the first catastrophe event. In the event of the second catastrophe, the percent of coverage for this layer is 80%. Layer of Coverage represents multiple actual treaty layers that are grouped for presentation purposes. The coverage of this layer is provided by a catastrophe bond that is in effect from July 15, 2025 through July 14, 2028. This layer is not subject to reinstatement. (1) (2) (3) (1) (1) (2) (3) (1) (2) (3) (2) (1) (2) (3) 39
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Table of Contents The table below presents the combined total reinsurance premiums under the Treaty (annual premiums and reinstatement premiums) for the 12 months ending June 30, 2027 and 2026, respectively: Treaty Annual Premium ReinstatementPremium Total CombinedPremium (Amounts in millions) For the 12 months ending June 30, 2027 $ 229 $ — $ 229 For the 12 months ended June 30, 2026 $ 237 $ — $ 237 __________ The decrease in the annual premium is primarily due to decreases in reinsurance rates resulting from increases in coverage capacity in the reinsurance market. The reinstatement premium and the total combined premium for the treaty period ending June 30, 2027 are projected amounts to be paid based on the latest information available. The reinstatement premium and the total combined premium for the treaty period ended June 30, 2026 are based on actual amounts paid. The Treaty ending June 30, 2027 and 2026 each provides for one full reinstatement of coverage limits except for certain layers of coverage noted in the tables above. Reinstatement premiums are based on the amount of reinsurance benefits used by the Company at 100% of the annual premium rate, with the exception of the reinstatement restrictions noted in the tables above, up to the maximum reinstatement premium of approximately $202 million and $221 million if the full amount of benefits is used for the 12 months ending June 30, 2027 and 2026, respectively. The total amount of reinstatement premiums is recorded as ceded reinstatement premiums written at the time of the catastrophe event based on the total amount of reinsurance benefits expected to be used for the event, and such reinstatement premiums are recognized ratably over the remaining term of the Treaty as ceded reinstatement premiums earned. The catastrophe events that occurred in 2026 caused approximately $105 million in losses and loss adjustment expenses to the Company before reinsurance, resulting primarily from storms in Oklahoma and Texas. The catastrophe events that occurred in 2025 caused approximately $1,877 million in losses and loss adjustment expenses to the Company before reinsurance as of September 30, 2026, resulting primarily from the Palisades and Eaton wildfires in California and storms in Texas and Oklahoma. Catastrophe losses for the events that occurred in 2025 was reduced by approximately $612 million of subrogation recorded on the Palisades and Eaton wildfires. All of the reinsurance benefits available for the 12 months ended June 30, 2025 under the Treaty, approximately $1,290 million, were used for losses from the Palisades and Eaton wildfires in the first quarter of 2025, and limits totaling $1,238 million were reinstated. See Note 10. Loss and Loss Adjustment Expense Reserves of the Notes to Consolidated Financial Statements for additional information. None of the 2025 catastrophe events, other than the Palisades and Eaton wildfires, individually resulted in losses in excess of the Company’s per-occurrence retention limit of $200 million and $150 million under the Treaty for the 12 months ended June 30, 2026 and 2025, respectively. The Company carries a commercial umbrella reinsurance treaty and a per-risk property reinsurance treaty, and seeks facultative arrangements for large property risks. In addition, the Company has other reinsurance in force that is not material to the consolidated financial statements. If any reinsurers are unable to perform their obligations under a reinsurance treaty, the Company will be required, as primary insurer, to discharge all obligations to its policyholders in their entirety. C. Invested Assets Portfolio Composition An important component of the Company’s financial results is the return on its investment portfolio. The Company’s investment strategy emphasizes safety of principal and consistent income generation, within a total return framework. The investment strategy has historically focused on maximizing after-tax yield with a primary emphasis on maintaining a well-diversified, investment grade, fixed income portfolio to support the underlying liabilities and achieve return on capital and profitable growth. The Company believes that investment yield is maximized by selecting assets that perform favorably on a long-term basis and by disposing of certain assets to enhance after-tax yield and minimize the potential effect of downgrades and defaults. The Company believes that this strategy enables the optimal investment performance necessary to sustain investment income over time. The Company’s portfolio management approach utilizes a market risk and consistent asset allocation strategy as the primary basis for the allocation of interest sensitive, liquid and credit assets as well as for determining overall below investment grade exposure and diversification requirements. Within the ranges set by the asset allocation strategy, tactical investment decisions are made in consideration of prevailing market conditions. (1) (2) (2) (1) (2) 40
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Table of Contents The following table presents the composition of the total investment portfolio of the Company at September 30, 2026: Cost Fair Value (Amounts in thousands) Fixed maturity securities: U.S. government bonds $ 14,926 $ 14,245 Municipal securities 4,063,106 3,879,530 Mortgage-backed securities 665,870 638,176 Corporate securities 699,634 682,711 Collateralized loan obligations 757,858 744,254 Other asset-backed securities 67,206 54,784 6,268,600 6,013,700 Equity securities: Common stock 698,609 839,529 Non-redeemable preferred stock 52,206 37,732 Private equity investment 5,000 5,103 Private equity funds measured at net asset value 142,100 106,961 897,915 989,325 Short-term investments 226,648 226,672 Total investments $ 7,393,163 $ 7,229,697 ______________ Fixed maturities and short-term bonds at amortized cost; equities and other short-term investments at cost. The fair value is measured using the NAV practical expedient. See Note 5. Fair Value Measurements of the Notes to Consolidated Financial Statements for additional information. At September 30, 2026, 46.2% of the Company’s total investment portfolio at fair value and 55.6% of its total fixed maturity securities at fair value were invested in tax-exempt state and municipal bonds. Equity holdings consist of non-redeemable preferred stocks, common stocks on which dividend income is partially tax-sheltered by the 50% corporate dividend received deduction, private equity funds, and private equity investment which is a direct investment in a private company. At September 30, 2026, all of the Company's short-term investments consisted of highly rated short-duration securities redeemable on a daily or weekly basis. Fixed Maturity Securities and Short-Term Investments Fixed maturity securities include debt securities, which are mostly long-term bonds and other debt with maturities of at least one year from purchase, and which may have fixed or variable principal payment schedules, may be held for indefinite periods of time, and may be used as a part of the Company’s asset/liability strategy or sold in response to changes in interest rates, anticipated prepayments, risk/reward characteristics, liquidity needs, tax planning considerations, or other economic factors. Short-term instruments include money market accounts, options, and short-term bonds that are highly rated short duration securities and redeemable within one year. A primary exposure for the fixed maturity securities is interest rate risk. The longer the duration, the more sensitive the asset is to market interest rate fluctuations. As assets with longer maturity dates tend to produce higher current yields, the Company’s historical investment philosophy has resulted in a portfolio with a moderate duration. The Company's portfolio is heavily weighted in investment grade tax-exempt municipal bonds. Fixed maturity securities purchased by the Company typically have call options attached, which further reduce the duration of the asset as interest rates decline. The holdings that are heavily weighted with high coupon issues, are expected to be called prior to maturity. Modified duration measures the length of time it takes, on average, to receive the present value of all the cash flows produced by a bond, including reinvestment of interest. As it measures four factors (maturity, coupon rate, yield and call terms) which determine sensitivity to changes in interest rates, modified duration is considered a better indicator of price volatility than simple maturity alone. (1) (2) (1) (2) 41
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Table of Contents The following table presents the maturities and durations of the Company's fixed maturity securities: September 30, 2026 December 31, 2025 (in years) Fixed Maturity Securities Nominal average maturity excluding short-term investments 17.2 14.7 including short-term investments 16.6 13.8 Call-adjusted average maturity excluding short-term investments 13.1 4.8 including short-term investments 12.6 4.5 Modified duration reflecting anticipated early calls excluding short-term investments 6.4 4.6 including short-term investments 6.2 4.4 ______________ The large increases in call-adjusted average maturity and modified duration reflecting anticipated early calls are driven mainly by the rise in interest rates during September 2026. Higher interest rates lowered the likelihood that issuers would exercise call options on the Company’s substantial holdings of callable tax-exempt municipal bonds and also slowed expected prepayments on its agency and private- label mortgage-backed securities, causing a greater share of both the municipal and mortgage-backed securities to be modeled further out the maturity curve rather than to earlier redemption or prepayment dates. While the Company continues to monitor rate-driven changes in call and prepayment expectations, the extension in call-adjusted maturity and duration is a direct result of this shift in anticipated early cash flows across the fixed maturity portfolio. Another exposure related to the fixed maturity securities is credit risk, which is managed by maintaining a weighted-average portfolio credit quality rating of AA- and, A+, at fair value, at September 30, 2026 and December 31, 2025, respectively. The Company's municipal bond holdings, of which 86.2% were tax exempt, represented 55.6% of its fixed maturity securities portfolio at September 30, 2026, at fair value, and are broadly diversified geographically. See Part I-Item 3. Quantitative and Qualitative Disclosures About Market Risks for a breakdown of municipal bond holdings by state. To calculate the weighted-average credit quality ratings disclosed throughout this Quarterly Report on Form 10-Q, individual securities were weighted based on fair value and credit quality ratings assigned by nationally recognized securities rating organizations. Taxable holdings consist principally of investment grade issues. At September 30, 2026, fixed maturity securities holdings rated below investment grade and non-rated bonds totaled $8.8 million and $28.1 million, respectively, at fair value, and represented 0.1% and 0.5%, respectively, of total fixed maturity securities. At December 31, 2025, fixed maturity securities holdings rated below investment grade and non- rated bonds totaled $10.1 million and $50.6 million, respectively, at fair value, and represented 0.2% and 0.9%, respectively, of total fixed maturity securities. The overall credit ratings for the Company’s fixed maturity securities portfolio were relatively stable during the nine months ended September 30, 2026, with 96.4% of fixed maturity securities at fair value experiencing no change in their overall rating. 2.9% and 0.7% of fixed maturity securities at fair value experienced upgrades and downgrades, respectively, during the nine months ended September 30, 2026. (1) (1) (1) 42
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Table of Contents The following table presents the credit quality ratings of the Company’s fixed maturity securities by security type at fair value: September 30, 2026 (Dollars in thousands) Security Type AAA AA A BBB Non-Rated/Other Total FairValue U.S. government bonds: Treasuries $ 14,245 $ — $ — $ — $ — $ 14,245 Total 14,245 — — — — 14,245 100.0 % — % — % — % — % 100.0 % Municipal securities: Insured 84,436 307,598 81,901 7,072 1,000 482,007 Uninsured 272,165 1,623,900 1,374,132 117,678 9,648 3,397,523 Total 356,601 1,931,498 1,456,033 124,750 10,648 3,879,530 9.2 % 49.8 % 37.5 % 3.2 % 0.3 % 100.0 % Mortgage-backed securities: Commercial 18,403 — — — — 18,403 Agencies — 68,509 — — — 68,509 Non-agencies: Prime 324,256 225,932 — — 236 550,424 Alt-A — 341 71 — 428 840 Total 342,659 294,782 71 — 664 638,176 53.7 % 46.2 % — % — % 0.1 % 100.0 % Corporate securities: Basic Materials — — — 4,104 — 4,104 Communications — — — 3,669 — 3,669 Consumer, cyclical — — 16,506 12,902 — 29,408 Consumer, non-cyclical — 14,665 71,358 4,844 — 90,867 Energy — 6,267 — 33,053 — 39,320 Financial — 118,411 351,978 16,248 — 486,637 Industrial — — 5,911 10,717 — 16,628 Technology — — 1,729 — — 1,729 Utilities — — — 10,349 — 10,349 Total — 139,343 447,482 95,886 — 682,711 — % 20.4 % 65.6 % 14.0 % — % 100.0 % Collateralized loan obligations: Corporate 103,698 217,991 399,420 — 23,145 744,254 Total 103,698 217,991 399,420 — 23,145 744,254 13.9 % 29.3 % 53.7 % — % 3.1 % 100.0 % Other asset-backed securities 2,597 9,237 21,632 18,824 2,494 54,784 4.7 % 16.9 % 39.5 % 34.3 % 4.6 % 100.0 % Total $ 819,800 $ 2,592,851 $ 2,324,638 $ 239,460 $ 36,951 $ 6,013,700 13.6 % 43.1 % 38.7 % 4.0 % 0.6 % 100.0 % _____________ Intermediate ratings are included at each level (e.g., AA includes AA+, AA and AA-). U.S. Government Bonds The Company had $14.2 million and $21.5 million, or 0.2% and 0.4% of its fixed maturity securities portfolio, at fair value, in U.S. government bonds at September 30, 2026 and December 31, 2025, respectively. Moody's and Fitch ratings for (1) (1) (1) (1) (1) (1) (1) 43
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Table of Contents U.S. government-issued debt were Aa1 and AA+, respectively, at September 30, 2026 and December 31, 2025. The modified duration of the U.S. government bonds portfolio reflecting anticipated early calls was 4.2 years and 2.9 years at September 30, 2026 and December 31, 2025, respectively. Municipal Securities The Company had $3.88 billion and $3.54 billion, or 64.5% and 65.2% of its fixed maturity securities portfolio, at fair value, in municipal securities at September 30, 2026 and December 31, 2025, respectively. At each of September 30, 2026 and December 31, 2025, the weighted- average rating of the Company’s total municipal securities was AA-. 13.8% and 18.9% of the Company's municipal securities, at fair value, were subject to federal taxes at September 30, 2026 and December 31, 2025, respectively. The modified duration of the municipal securities portfolio reflecting anticipated early calls was 7.1 years and 4.9 years at September 30, 2026 and December 31, 2025, respectively. At September 30, 2026 and December 31, 2025, $482.0 million and $456.8 million, respectively, of the Company's municipal securities, at fair value, were insured. The Company considers the strength of the underlying credit as a buffer against potential market value declines which may result from future rating downgrades of the bond insurers. In addition, the Company has a long-term time horizon for its municipal bond holdings, which generally allows it to recover the full principal amounts upon maturity and avoid forced sales prior to maturity of bonds that havedeclined in market value due to the bond insurers’ rating downgrades. Based on the uncertainty surrounding the financial condition of these insurers, it is possible that there will be future downgrades to below investment grade ratings by the rating agencies in the future, and such downgrades could impact the estimated fair value of municipal bonds. Mortgage-Backed Securities The Company had mortgage-backed securities portfolio of $638.2 million and $297.4 million, or 10.6% and 5.5% of the Company's fixed maturity securities portfolio at fair value, at September 30, 2026 and December 31, 2025, respectively. Substantially all of the Company's mortgage-backed securities portfolio at those dates was categorized as loans to “prime” residential and commercial real estate borrowers. The Company had holdings of $18.4 million and $11.2 million at fair value ($19.1 million and $11.3 million at amortized cost) in commercial mortgage-backed securities at September 30, 2026 and December 31, 2025, respectively. The weighted-average rating of the entire mortgage-backed securities portfolio was AA+ at each of September 30, 2026 and December 31, 2025. The modified duration of the mortgage-backed securities portfolio reflecting anticipated early calls was 4.1 years and 3.4 years at September 30, 2026 and December 31, 2025, respectively. Corporate Securities Corporate securities included in fixed maturity securities were as follows: September 30, 2026 December 31, 2025 (Dollars in thousands) Corporate securities at fair value $ 682,711 $ 751,602 Percentage of total fixed maturity securities portfolio 11.4 % 13.8 % Modified duration 3.7 years 2.9 years Weighted-average rating A A Collateralized Loan Obligations Collateralized loan obligations included in fixed maturity securities were as follows: September 30, 2026 December 31, 2025 (Dollars in thousands) Collateralized loan obligations at fair value $ 744,254 $ 722,794 Percentage of total fixed maturity securities portfolio 12.4 % 13.3 % Modified duration 6.2 years 5.9 years Weighted-average rating AA- AA- 44
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Table of Contents Other Asset-Backed Securities Other asset-backed securities included in fixed maturity securities were as follows: September 30, 2026 December 31, 2025 (Dollars in thousands) Other asset-backed securities at fair value $ 54,784 $ 98,455 Percentage of total fixed maturity securities portfolio 0.9 % 1.8 % Modified duration 2.2 years 0.9 years Weighted-average rating A A- Equity Securities Equity holdings of $989.3 million and $812.8 million at fair value, as of September 30, 2026 and December 31, 2025, respectively, consisted of non-redeemable preferred stocks, common stocks on which dividend income is partially tax-sheltered by the 50% corporate dividend received deduction, private equity funds, and private equity investment which is a direct investment in a private company. The Company had a net gain of $7.1 million and $19.1 million due to changes in fair value of the Company’s equity securities portfolio for the nine months ended September 30, 2026 and 2025, respectively. The primary cause for the increases in fair value of the Company’s equity securities portfolio for the nine months ended September 30, 2026 and 2025 was the overall improvement in equity markets. The Company’s common stock allocation is intended to enhance the return of and provide diversification for the total portfolio. At September 30, 2026, 13.7% of the total investment portfolio at fair value was held in equity securities, compared to 12.4% at December 31, 2025. The Company reduced its equity security holdings in January 2025 to ensure ample liquidity for losses from the Palisades and Eaton wildfires and to reduce volatility in the investment portfolio (see "Equity Price Risk" under Item 3 below). D. Debt The Company's debts at September 30, 2026 were $525 million of senior unsecured notes that are publicly traded and $50 million drawn under an unsecured credit facility. For additional information on these debts, see Note 11. Notes Payable of the Notes to Consolidated Financial Statements. The Company was in compliance with all of the financial covenants pertaining to minimum statutory surplus, debt to total capital ratio, and risk based capital ratio under the unsecured credit facility at September 30, 2026. E. Regulatory Capital Requirements Among other considerations, industry and regulatory guidelines suggest that the ratio of a property and casualty insurer’s annual net premiums written to statutory policyholders’ surplus should not exceed 3.0 to 1. Based on the combined surplus of all the Insurance Companies of $2.88 billion at September 30, 2026, and net premiums written of $6.17 billion for the twelve months ended on that date, the ratio of net premiums written to surplus was 2.14 to 1 at September 30, 2026. Item 3. Quantitative and Qualitative Disclosures About Market Risks The Company is subject to various market risk exposures primarily due to its investing and borrowing activities. Primary market risk exposures are changes in interest rates, equity prices, and credit risk. Adverse changes to these rates and prices may occur due to changes in the liquidity of a market, or to changes in market perceptions of creditworthiness and risk tolerance. The following disclosure reflects estimates of future performance and economic conditions. Actual results may differ. Overview The Company’s investment policies define the overall framework for managing market and investment risks, including accountability and controls over risk management activities, and specify the investment limits and strategies that are appropriate given the liquidity, surplus, product profile, and regulatory requirements of the subsidiaries. Executive oversight of investment activities is conducted primarily through the Company’s investment committee. The Company’s investment committee focuses on strategies to enhance after-tax yields, mitigate market risks, and optimize capital to improve profitability and returns. 45
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Table of Contents The Company manages exposures to market risk through the use of asset allocation, duration, and credit ratings. Asset allocation limits place restrictions on the total amount of funds that may be invested within an asset class. Duration limits on the fixed maturity securities portfolio place restrictions on the amount of interest rate risk that may be taken. Comprehensive day-to-day management of market risk within defined tolerance ranges occurs as portfolio managers buy and sell within their respective markets based upon the acceptable boundaries established by investment policies. Credit Risk Credit risk results from uncertainty in a counterparty’s ability to meet its obligations. Credit risk is managed by maintaining a high credit quality fixed maturity securities portfolio. The estimated weighted-average credit quality rating of the fixed maturity securities portfolio was AA- and A+, at fair value, at September 30, 2026 and December 31, 2025, respectively. The following table presents fixed maturity municipal securities by state in descending order of holdings at fair value at September 30, 2026: States Fair Value Average Rating (Amounts in thousands) Florida $ 536,911 A+ New York 367,235 AA California 360,279 AA- Texas 351,284 AA Pennsylvania 233,562 A+ Other states 2,030,259 AA- Total $ 3,879,530 At September 30, 2026, the fixed maturity municipal securities portfolio was broadly diversified among the states and the largest holdings were in populous states such as Florida and New York. These holdings were further diversified primarily among cities, counties, schools, public works, hospitals, and state general obligations. The Company seeks to minimize overall credit risk and ensure diversification by limiting exposure to any particular issuer. Taxable fixed maturity securities represented 44.4% of the Company’s total fixed maturity securities portfolio at fair value at September 30, 2026. 0.01% of the Company’s taxable fixed maturity securities at fair value, representing 0.002% of its total fixed maturity securities portfolio at fair value, were rated below investment grade at September 30, 2026. Below investment grade issues are considered “watch list” items by the Company, and their status is evaluated within the context of the Company’s overall portfolio and its investment policy on an aggregate risk management basis, as well as their ability to recover their investment on an individual issue basis. Equity Price Risk Equity price risk is the risk that the Company will incur losses due to adverse changes in equity markets. At September 30, 2026, the Company’s primary objective for common equity investments was current income. The fair value of the equity investments consisted of $839.5 million in common stocks, $37.7 million in non-redeemable preferred stocks, $5.1 million in private equity investment, and $107.0 million in private equity funds. Common stocks are typically valued for future economic prospects as perceived by the market. Common stocks represented 11.6% of total investments at fair value at September 30, 2026. Beta is a measure of a security’s systematic (non-diversifiable) risk, which is measured by the percentage change in an individual security’s return for a 1% change in the return of the market. 46
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Table of Contents Based on hypothetical reductions in the overall value of the stock market, the following table illustrates estimated reductions in the overall value of the Company’s common stock portfolio at September 30, 2026 and December 31, 2025: September 30, 2026 December 31, 2025 (Amounts in thousands, except average Beta) Average Beta 0.85 0.84 Hypothetical reduction of 25% in the overall value of the stock market $ 172,046 $ 142,205 Hypothetical reduction of 50% in the overall value of the stock market $ 344,092 $ 284,410 Interest Rate Risk Interest rate risk is the risk that the Company will incur a loss due to adverse changes in interest rates relative to the interest rate characteristics of interest bearing assets and liabilities. The Company faces interest rate risk as it invests a substantial amount of funds in interest sensitive assets and holds interest sensitive liabilities. Interest rate risk includes risks related to changes in U.S. Treasury yields and other key benchmarks, as well as changes in interest rates resulting from widening credit spreads and credit exposure to collateralized securities. The fixed maturity securities portfolio, which represented 83.2% of total investments at September 30, 2026 at fair value, is subject to interest rate risk. The change in market interest rates is inversely related to the change in the fair value of the fixed maturity securities portfolio. A common measure of the interest sensitivity of fixed maturity securities is modified duration, a calculation that utilizes maturity, coupon rate, yield and call terms to calculate an average age to receive the present value of all the cash flows produced by such assets, including reinvestment of interest. The longer the duration, the more sensitive the asset is to market interest rate fluctuations. The Company has historically invested in fixed maturity securities with a goal of maximizing after-tax yields and holding assets to the maturity or call date. Since assets with longer maturities tend to produce higher current yields, the Company’s historical investment philosophy resulted in a portfolio with a moderate duration. Fixed maturity securities purchased by the Company typically have call options attached, which further reduce the duration of the asset as interest rates decline. The modified duration of the overall fixed maturity securities portfolio reflecting anticipated early calls increased to 6.2 years at September 30, 2026 from 4.4 years at December 31, 2025, resulting primarily from higher market interest rates, which reduced the probability of early calls on callable municipal securities and slowed prepayments on the Company’s agency and private-label mortgage-backed securities, thereby extending the expected life of the portfolio. If interest rates were to rise by 100 and 200 basis points, the Company estimates that the fair value of its fixed maturity securities portfolio at September 30, 2026 would decrease by $385.5 million and $770.9 million, respectively. Conversely, if interest rates were to decrease, the fair value of the Company’s fixed maturity securities portfolio would rise, and it may cause a higher number of the Company's fixed maturity securities to be called away. The proceeds from the called fixed maturity securities would likely be reinvested at lower yields, which would result in lower overall investment income for the Company. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost benefit relationship of possible controls and procedures. As required by Securities and Exchange Commission Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the quarter covered by this Quarterly Report on Form 10-Q. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level. 47
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Table of Contents Changes in Internal Control over Financial Reporting There has been no change in the Company’s internal control over financial reporting during the Company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. The Company’s process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies which may be identified during this process. PART II - OTHER INFORMATION Item 1. Legal Proceedings The Company is, from time to time, named as a defendant in various lawsuits or regulatory actions incidental to its insurance business. The majority of lawsuits brought against the Company relate to insurance claims that arise in the normal course of business and are reserved for through the reserving process. For a discussion of the Company’s reserving methods, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The Company establishes reserves for non-insurance claims related lawsuits, regulatory actions, and other contingencies when the Company believes a loss is probable and is able to estimate its potential exposure. For loss contingencies believed to be reasonably possible, the Company also discloses the nature of the loss contingency and an estimate of the possible loss, range of loss, or a statement that such an estimate cannot be made. In addition, the Company accrues for anticipated legal defense costs associated with such lawsuits and regulatory actions. While actual losses may differ from the amounts recorded and the ultimate outcome of the Company's pending actions is generally not yet determinable, the Company does not believe that the ultimate resolution of currently pending legal or regulatory proceedings, either individually or in the aggregate, will have a material adverse effect on its financial condition or cash flows. In all cases, the Company vigorously defends itself unless a reasonable settlement appears appropriate. For a discussion of any additional legal matters, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. See also “Overview-C. Regulatory and Legal Matters” in Part I-Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q. There are no environmental proceedings arising under federal, state, or local laws or regulations to be discussed. Item 1A. Risk Factors The Company’s business, results of operations, and financial condition are subject to various risks. These risks are described elsewhere in this Quarterly Report on Form 10-Q and in the Company’s other filings with the SEC, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. The risk factors identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 have not changed in any material respect. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None. Item 3. Defaults Upon Senior Securities None. Item 4. Mine Safety Disclosures Not applicable. Item 5. Other Information During the three months ended September 30, 2026, no director or executive officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. 48
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Table of Contents Item 6. Exhibits 10.1 First Amendment to Second Amended and Restated Credit Agreement, dated as of July 31, 2026, by and among Mercury GeneralCorporation, Bank of America, N.A., as administrative agent, and the other lenders and parties party thereto. (This document wasfiled as an exhibit to Registrant’s Form 10-Q, filed with the Securities and Exchange Commission on August 4, 2026, and isincorporated herein by this reference.) 15.1 Report of Independent Registered Public Accounting Firm. 15.2 Awareness Letter of Independent Registered Public Accounting Firm. 31.1 Certification of Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification of Registrant’s Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as created by Section 906 of theSarbanes-Oxley Act of 2002. This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q and isnot being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated byreference into any filing of the Company. 32.2 Certification of Registrant’s Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as created by Section 906 of theSarbanes-Oxley Act of 2002. This certification is being furnished solely to accompany this Quarterly Report on Form 10-Q and isnot being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated byreference into any filing of the Company. 101.INS XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags areembedded within the Inline XBRL document. 101.SCH XBRL Taxonomy Extension Schema Document. 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. 101.LAB XBRL Taxonomy Extension Label Linkbase Document. 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). 49
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Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MERCURY GENERAL CORPORATION Date: November 3, 2026 By: /s/ Gabriel Tirador Gabriel Tirador Chairman of the Board and Chief Executive Officer Date: November 3, 2026 By: /s/ Theodore R. Stalick Theodore R. Stalick Senior Vice President and Chief Financial Officer 50
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Exhibit 15.1 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders Mercury General Corporation: Results of Review of Interim Financial Information We have reviewed the consolidated balance sheet of Mercury General Corporation and subsidiaries (the Company) as of September 30, 2026, the related consolidated statements of operations and shareholders' equity for the three-months and nine-months periods ended September 30, 2026 and 2025, the related consolidated statements of cash flows for the nine-month periods ended September 30, 2026 and 2025, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles. We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheet of the Company as of December 31, 2025, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the year then ended (not presented herein); and in our report dated February 17, 2026, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2025, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Basis for Review Results This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. /S/ KPMG LLP Los Angeles, California November 3, 2026
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Exhibit 15.2 Awareness Letter of Independent Registered Public Accounting Firm November 3, 2026 The Board of Directors Mercury General Corporation Re: Registration Statement No. 333-295812 With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated November 3, 2026 related to our review of interim financial information. Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act. /s/ KPMG LLP Los Angeles, California
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Exhibit 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Gabriel Tirador, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Mercury General Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: November 3, 2026 /s/ GABRIEL TIRADOR Gabriel Tirador, Chairman of the Board and Chief Executive Officer
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Exhibit 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Theodore R. Stalick, certify that: 1. I have reviewed this Quarterly Report on Form 10-Q of Mercury General Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. Date: November 3, 2026 /s/ THEODORE R. STALICK Theodore R. Stalick, Senior Vice President and Chief Financial Officer
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Exhibit 32.1 Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Pursuant to 18 U.S.C. §1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Mercury General Corporation (the “Company”) hereby certifies, to such officer’s knowledge, that: (i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 3, 2026 /s/ GABRIEL TIRADOR Gabriel Tirador, Chairman of the Board and Chief Executive Officer The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
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Exhibit 32.2 Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Pursuant to 18 U.S.C. §1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Mercury General Corporation (the “Company”) hereby certifies, to such officer’s knowledge, that: (i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: November 3, 2026 /s/ THEODORE R. STALICK Theodore R. Stalick, Senior Vice President and Chief Financial Officer The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.