California's third-largest home insurer seeks to hike rates
The filing asks regulators to approve a statewide increase of 6.9%, according to the company. The full details of the filing were not available online as of Friday afternoon.
In a statement, Mercury said the increase was necessary to compensate for the insurer's exposure to wildfire risk and inflation that drives up the cost of paying claims. Each homeowners' exact rate change will depend on their wildfires risk — some may see increases that are lower than the average, or even decreases; others' rates will rise above the average.
The company said it would also be offering new discounts for wildfire mitigation work, such as installing ember-resistant vents or clearing out brush, which could reduce customers' wildfire portion of their premiums by as much as a third.
Mercury is the first company to submit for a rate increase under the Sustainable Insurance Strategy, a package of reforms spearheaded by Insurance Commissioner Ricardo Lara aimed at making insurance more available in California. The reforms allow insurance companies to begin using forward-looking models of wildfire risk to influence premiums and to pass along some of the cost of reinsurance — insurance for insurers — to customers.
These reforms were widely expected to lead to rate increases, but also come with a requirement for companies to write more policies in high wildfire-risk areas if they don't do so already.
Last year, Mercury confirmed to the Chronicle that it would be among the companies that would be required to write more policies under the new regulations. In anticipation of the reforms being finalized, it announced plans to insure more than 200 homes in Paradise (Butte County), the site of the 2018 Camp Fire.
Over the past few years, Los Angeles-based Mercury has scaled up its presence in California's home insurance line, rising from the seventh largest home insurer in 2021 to the third largest in 2024 behind State Farm General and Farmers Insurance Group.
Over that same period, Mercury has raised home insurance rates four times — a 6.9% increase in 2021 followed by a 12.6% increase in 2023, a 7% increase in 2024 and another 12% increase that went into effect this March.
It's common to see insurance companies request rate hikes of 6.9%. That's because under Proposition 103, the 1988 voter initiative that established California's system for reviewing rate hike requests, consumer groups can request a mandatory hearing for requests of 7% and above.
Mercury CEO Gabriel Tirador said in a statement that he believed Lara's reforms would successfully stabilize California's home insurance market.
'Our filing is the first step toward Mercury's goal of expanding insurance options for California homeowners and underscores our 60-year commitment to California customers and agents,' Tirador wrote. 'As other companies scaled back their California operations, Mercury stepped up to provide more options for our agents and customers, and we are committed to continuing our efforts to help protect our California neighbors well into the future.'
Its filing makes use of a wildfire catastrophe model made by Verisk, one of three such models recently approved for use by the department. The department will now review whether Mercury's usage of the model reliably supports its request for a 6.9% increase.
It's the first of many new filings expected now that wildfire models have been approved for use. Not all companies will be required to write new policies under the regulations — some that already insure a significant number of homes in high-risk areas will only be asked to maintain that presence. But Farmers Insurance Group, California's second largest home insurer, has joined Mercury in writing more new policies to prepare for the reforms.
Last year, Allstate Insurance, the eighth largest home insurer as of 2024, signaled it planned to begin writing new policies for the first time since late 2022 once it could begin raising rates under the reforms. It has not set a date for this to happen, however. Officials hope private insurers writing more policies will reverse the rapid growth of the California FAIR Plan, the state's insurer of last resort.
'Our goal is for consumers to have more options to find coverage on their own terms instead of FAIR Plan policies that cover less and cost more,' Deputy Insurance Commissioner Michael Soller said in a statement Friday. 'That will continue to be our top priority.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Wire
42 minutes ago
- Business Wire
Discover Yourself Named to Inc. 5000 for Second Time
EXCELSIOR, Minn.--(BUSINESS WIRE)--Discover Yourself, the world's largest distributor of the Insights Discovery® personality assessment, has once again been named to the Inc. 5000 list of America's Fastest-Growing Private Companies. This second-time honor places the Minnesota-based training firm alongside some of the country's most innovative and dynamic businesses. 'Being named to the Inc. 5000 is more than an award. It's proof our methods work, and that organizations everywhere are hungry for meaningful change.' Share The Inc. 5000 list is widely regarded as the hallmark of entrepreneurial success, celebrating innovation, customer impact and sustained revenue growth. Earning a spot on the list twice reflects Discover Yourself's strong performance, and its enduring ability to adapt and deliver value in a rapidly changing workplace environment. Easily the most colorful company on the Inc. 5000 list Founded by internationally recognized speaker, author and trainer Scott Schwefel, Discover Yourself transforms communication and teamwork by teaching the universal language of color. Through the Insights Discovery framework, individuals identify their unique blend of Fiery Red, Sunshine Yellow, Earth Green and Cool Blue energies, unlocking self-awareness and awareness of others. This approach enables participants to reduce misunderstandings, build stronger connections and collaborate more effectively. 'Most people who train with us have done other personality assessments but rarely use them. With ours, they start applying it immediately because every conversation, every email and every interaction gets better,' says Schwefel. Discover Yourself's programs — ranging from leadership development and sales training to executive coaching and team-building workshops — are trusted by global brands such as Caterpillar, 3M, Whirlpool, Zendesk and Workday. The company is actively expanding its reach with new online learning platforms, scalable virtual workshops and digital resources to make its programs accessible to teams anywhere in the world. Its reach spans all 50 states and more than 30 countries, powered in part by newly launched digital clones that can deliver on-demand training in 170 languages. Schwefel, one of only 60 global faculty certified to train other trainers, has personally taken 4,000 CEOs through Insights Discovery training, and has spoken to more than 2000 groups. His TED Talk has nearly four million views. He is also a popular keynote speaker worldwide. 'Being named to the Inc. 5000 is more than an award. It's proof our methods work, and that organizations everywhere are hungry for meaningful change,' comments Schwefel. Discover Yourself has grown from a two-person operation to 17 employees, who support a global network of more than 300 Insights Discovery certified facilitators. Clients reporting measurable boosts in collaboration, productivity and leadership capability. Visit Discover Yourself to take a one-minute quiz to discover where you fall in the color model. If you'd never experienced Insights Discovery and would like to learn more, contact Scott@
Yahoo
an hour ago
- Yahoo
Veshin Factory Taps LA's Lalaland to Scale Made-in-USA Production for Bio-Based Bags
As it continues its expansion into an international manufacturing enterprise, Veshin Factory has tapped one of Los Angeles' preeminent leather goods manufacturers to provide U.S. brands with an onshore option to produce handbags and accessories. A stalwart of Downtown L.A.'s Fashion District, Lalaland Production and Design has become the seventh global manufacturer to join Veshin's international network—and the production firm's first partner in the U.S. Founded by Alex Zar, the large-scale factory has produced leather wares for household name brands like Adidas, Ralph Lauren, Louis Vuitton, Cuyana, Banana Republic and Clare V. More from Sourcing Journal EU-Funded Project Makes Lignin Breakthrough in Biobased Research Material World: Biofabricate Slates Fair for London Design Week Future Fibers Expo Helps Functional Fabric Fair Understand Next-Gen According to Veshin Factory founder Joey Pringle, the strategic partnership represents a piece of a puzzle that has thus far been missing. Veshin's existing client base and partners—including both brands and next-generation material innovators—have been seeking to round out an America-based supply chain. Founded in 2020, Veshin's China-based factory has focused on the integration of bio-based animal leather alternatives, from mycelium to apple-based leathers, into the fashion value chain. But throughout the pandemic and the years of logistical, geopolitical and economic upheaval that followed, interest in both diversifying and shortening the supply chain have grown. Recently, the company began looking to factories in Colombia and Brazil as partners to support the U.S. market. But bringing production capabilities even closer to home has become a bigger objective in recent months as concerns about tariffs have more companies considering onshoring. According to Pringle, Lalaland was a natural fit given its existing connections to global brands and fashion firms and Zar's interest in broadening his material portfolio and relationships. 'He can now access a lot of areas of business that he hasn't been working in, and where we specialize,' he said. Veshin aims to help connect Lalaland with cutting-edge material innovation firms—some of which are based in the U.S.—and assist in the research and development, scaling and commercializing the products that result from the new partnerships. 'Now I can start bringing these materials to [Zar], he can start looking at them, he can start doing trials,' he said. With Zar focused on running day-to-day operations at the L.A. factory, Veshin can also help spread the word about the factory—and its new capabilities to produce mycelium-based handbags, for example—to a global audience. Veshin is growing its presence at trade shows, fashion weeks and expos throughout the world, and working to promote its partner factories. 'From my perspective, we have a lot of brands and customers who are telling us, 'Hey, we love what you're doing, but we can't do it in China, or we can't do it in Brazil,'' largely due to concerns about President Donald Trump's tariff regime. The president has expressed his intent to hit Brazil with 50-percent duties on Aug.1, while negotiations with China remain in flux. As such, 'Everyone's kind of screaming for onshoring, and we wanted to have that onshoring presence so he can facilitate those orders,' Pringle said of Zar and Lalaland. The so-called screamers include Veshin's material partners, like Illinois-based Hydefy, which manufactures mycelium-based leather (used by Stella McCartney on a handbag style that debuted this spring). 'We're made in America, and what we noticed is that for a lot of brands that we're speaking with right now, [onshoring] is top of their mind just because of the volatility. So even if they are not making permanent changes to their supply chain, given the uncertainty, I think everyone is thinking about diversifying their supply chain and diversifying their partners,' the firm's general manager, Rachel Lee, told Sourcing Journal. 'So when we're in some of those conversations, they do ask us about partners we work with from a manufacturing perspective that may be in this hemisphere,' Lee added. 'I think that's the next phase and flavor of what the partnership could look like—hopefully introducing each other to opportunities where there could be three-way collaborations between the material supplier, the manufacturer and brands.' 'I think what Veshin has done really well is build a network of manufacturers across the globe, now including here in the U.S.,' she said. In addition to providing localized bulk and small-scale production, Veshin and Lalaland are prepared to assist with in-house design and R&D. The proximity to the end consumer market speaks not only to brands' growing anxiety about tariffs, but to concerns about logistics and lead times. Pringle hopes these upsides can reinvigorate interest the next-gen materials sector, with many innovators struggling to find their footing or scale in recent years due to brand concerns about cost. With much of the industry pulling back on sustainable advancement in the face of recent economic headwinds, promising pioneers are now struggling to stay afloat or collapsing due to complications. For example, materials science company Natural Fiber Welding, the maker of plant-based plastic-free leather replacement Mirum and a Veshin partner, announced its third round of layoffs in May due to corporate restructuring. But Pringle believes a second wave of innovation, investment and adoption is on the precipice of taking hold. New players are taking the field and the interest in leather alternatives—especially those that are plastic-free—is growing. 'There's been a lot of excitement from brands, but it came down to durability and price. Now we have some good solutions—and we have Made in the USA—and we can start tackling some of those conversations again,' Pringle said. 'Hopefully we can start putting our heads together again and over the next 12 to 18 months, we'll start seeing some production success and some good volume in fashion.'
Yahoo
an hour ago
- Yahoo
Rudholm Group Expands RFID Production in LA to Meet Growing Garment Digitalization Demand
As the focus on U.S. manufacturing and sourcing continues amid ongoing trade turbulence, Sweden-based garment and footwear labeling and packaging provider Rudholm Group is expanding RFID production capacity at its Los Angeles facility. A 'significant investment' in L.A. will bring the factory's annual RFID production capacity to approximately 100 million pieces, or carriers. This RFID ramp up is about creating a more localized supply chain for customers across the Western Hemisphere, while also meeting the growing customer demand for digitalized garment solutions. More from Sourcing Journal Veshin Factory Taps LA's Lalaland to Scale Made-in-USA Production for Bio-Based Bags What's the Status on Digital Product Passport Implementation? True Religion Celebrates Latina Heritage with Bella Doña 'At Rudholm Group, we strive to stay ahead of market trends and exceed our customers' expectations,' said Dennis Lau, CEO of Rudholm Group. 'This expansion reflects not only our dedication to innovation but also our commitment to investing in key markets like the United States.' Explaining the expansion move, Lau told Sourcing Journal that L.A. has been a 'strategic geographic location from day one' for Rudholm, supplying large customers in the local area as well as companies across the U.S. and in markets like Central America. The capacity expansion is courtesy of new RFID production machinery that is five times faster than what the facility previously used. Another new addition is fully automated quality control for RFID, which uses a camera system to scan barcodes of the printed RFID carrier and check that the data encoded is correct. Previously, quality control would have been done manually, but Lau noted that automation hasn't changed staffing needs. 'We're not saving on any human resources, but we're just guaranteeing a much, much more secure outcome of the product,' he said. RFID—short for radio frequency identification—powers connected garments, enabling solutions like inventory tracking, smart fitting rooms and contactless checkout. It is also among the key solutions for digital product passports (DPP), which contain product life cycle details such as material origins and how it can be recycled at end of life. Through the EU's Ecodesign for Sustainable Products Regulation (ESPR), DPP is rolling out as a mandate for goods sold in the bloc. Preparing for this DPP demand, Rudholm Group's in-house team developed the software ShareLabel. 'The world is moving into automation and AI, and I believe that RFID is just the next logical step for most retail brands,' said Lau. 'It's a better asset control of what you have in store, what you have in the warehouse, in real time.' Rudholm Group has been working to reduce its dependance on global supply chains. Along with circumventing trade disruptions, producing in the U.S. leads to shorter lead times. The company entered the U.S. market in 2016 with a New York office, followed by the opening of the Los Angeles facility in 2020 and a Nevada printing facility for polybags and poly mailers, which opened in 2022. In addition to RFID, Rudholm's LA facility produces UPC stickers and care labels. 'Our vision is to provide more than products—we're delivering solutions that help our customers stay ahead in a rapidly evolving industry,' Lau said. 'With this expansion, we're empowering brands to harness the power of digital innovation while supporting responsible, localized production.' Sign in to access your portfolio
