Mercury General Could Add Thousands of Tokio Marine California Customers Under Exit Plan

Mercury General Corp. said it will offer policies to what could be thousands of new California personal lines customers, under a plan crafted with exiting writer Tokio Marine America and subsidiary Trans Pacific Insurance Co.

Source: AM Best | Published on May 13, 2024

Mercury General insurance to replace Tokio Marine policies in CA

Mercury General Corp. said it will offer policies to what could be thousands of new California personal lines customers, under a plan crafted with exiting writer Tokio Marine America and subsidiary Trans Pacific Insurance Co.

“We believe very strongly in California’s future,” said Chief Executive Officer Gabe Tirador in a statement.

Steps the California Department of Insurance and Commissioner Ricardo Lara are taking to modernize the insurance market will “help stabilize the market and create a transparent, sustainable model that will benefit California consumers,” he said.

That includes plans to allow forward-looking rate models in rate filings and tightening regulatory language in an effort to speed the rate-filing process.

The company is partnering with its independent agents, who also represent Tokio Marine, and has offered additional appointments to more than a dozen TMA agents to help with the transition.

Mercury General said the plan with Tokio Marine was worked out with help from agents and CDI leaders.

“Innovative solutions surface during challenging times. A diverse group of entities worked together on this project with the common goal of providing coverage for California insurance consumers,” said Tirador.

Tokio Marine America CEO Daisuke Ugaeri said, “We are pleased to have reached an agreement with Mercury Insurance Group… Tokio Marine America remains committed to commercial lines in California — and across the country.”

Last July, Tokio Marine America said it planned to exit all personal lines in California by mid-2026 and stop writing new non-automobile personal lines that month, joining a list of carriers restricting or closing access in the troubled market.

According to a CDI filing, nonrenewal notices begin effective July 1. Barring any wildfire moratorium notices this year or next, nonrenewals could be completed by the start of the second half of 2025 and outstanding endorsements a month later.

The carriers’ customers share similar coverage needs and insurance agent relationships, according to Mercury Chief Sales Development Officer Brandt Minnich in a statement.

Operating entities of Mercury General Corp. currently have a Best’s Financial Strength Rating of A (Excellent). Operating entities of Tokio Marine Holdings Inc. are currently rated A++ (Superior) to A (Excellent).