** Shares of Los Angeles-based insurer Mercury General MCY.N jump 20.7% to $60.43 premarket

** MCY late Tuesday reported Q4 operating income of $2.78/shr, blowing past Wall Street expectations of $1.12/shr, according to estimates compiled by LSEG

** Q4 net premiums written jumped 16.1% to $1.31 billion, beating expectations of $1.24 billion

** MCY's Q4 combined ratio improved to 91.4% from 98.6% a year earlier

** A ratio below 100% means the insurer earned more in premiums than it paid out in claims

** Raymond James says Q4 results reflect some of the strongest underlying results in over the last 10 years

** Meanwhile, MCY forecast net catastrophe losses from the devastating Los Angeles wildfires to be between $155 million and $325 million

** Brokerage expects MCY to benefit from a potential change in the pricing environment for California homeowners' insurance market over the next 18 months

** MCY stock down 24.7% YTD

(Reporting by Arasu Kannagi Basil in Bengaluru)

((ArasuKannagi.Basil@thomsonreuters.com;))