Mercury Insurance CEO plans to continue doing business in Southern California following devasting wildfires

CBS News

02-06-2025

One of the largest insurers in the state spoke to KCAL News about the future of the insurance market in California and whether it has enough funds to cover claims from the Palisades and Eaton fires.
It's the first time since January's devastating fires that any head of an insurance company has gone on camera with KCAL News to answer some tough questions about rates and future policies.
The CEO of Mercury Insurance, Gabriel Tirador, joined State Insurance Commissioner Ricardo Lara at the Global Sustainable Insurance Summit in Long Beach and told the crowd that Mercury is committed to doing business in Southern California.
"We want to do it prudently, but yes, we want to grow both homeowners and auto in California," Tirador said.
Mercury Insurance is the third-largest insurer writing homeowners' policies in the state.
"Eighty percent of our business is in California. We were founded in California back in 1962. We are not going anywhere," he added.
A main concern customers have following the fires is if their insurance policies will be affordable. Mercury recently had a 12% rate hike approved by the Department of Insurance and in July, Mercury's own "Reinsurance," which is an insurance company's way of transferring some of its risk to another insurer, is up for renewal.
If those rates go up, Tirador said the costs will be passed along to consumers.
"The higher costs we have have to be passed on at some point, what's really important is the risk mitigation," Tirador said. "The more that homeowners can do to mitigate their risk and harden their homes, the more discounts we can provide them."
Mercury currently has a filing pending with the Department of Insurance that has discounts in place for home hardening.
"That filing is what we call revenue neutral, which means some rates go up, some rates go down," he explained.
Tirador claims he understands Californians' frustration with rising insurance rates, but he also says the homeowner has a responsibility to make their homes more fire-resistant.
"There are folks who think they live two miles down from the wild land area and they're not exposed, but look at what happened in Altadena," he said. "It's really about trying to mitigate risk so that the prices can come down and insurance becomes more affordable."
Consumer advocates have criticized the insurance company for fleecing consumers and mismanaging their finances, but Tirador said that's simply untrue.
"The gross loss from these wildfires for Mercury are $2.15 billion. Our capital was about $2 billion. Luckily, we have a lot of reinsurance. We buy our own insurance. We try to price our product to only make 4%," Tirador said. "We have not made money in homeowners for quite some time.
Earlier this year, Mercury became the first major insurer to start writing policies in Paradise, which was decimated by the Camp Fire in 2018.