Mercury General Corporation (MCY) saw its stock soar 10.8% in after-hours trading on Tuesday, as investors braced for the company's upcoming earnings report and the potential impact of the recent wildfires in California.
The Los Angeles-based insurer, which holds a significant share of the California homeowners insurance market, is expected to disclose substantial losses and claims related to the devastating wildfires that engulfed parts of the state earlier this year. According to reports, the company will discuss the extent of its exposure to the catastrophe during its earnings call on Wednesday.
In addition to the direct claims from its policyholders, Mercury General faces the prospect of contributing to the replenishment of the FAIR Plan, California's last-resort insurance plan. The FAIR Plan's coffers are expected to be exhausted due to the unprecedented losses from the wildfires, potentially requiring insurers like Mercury General to make significant assessments to the plan.
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