Mercury Insurance to Absorb Thousands of Safeco Policies in California as Liberty Mutual Shifts Strategy
Los Angeles, CA – August 6, 2025 – Mercury Insurance (NYSE: MCY) has announced a strategic partnership with Liberty Mutual Insurance to take over thousands of Safeco Insurance policies in California, focusing on renters, condo, and select auto insurance lines. This move follows Liberty Mutual’s decision to streamline its personal lines strategy in the state, exiting certain non-core markets by 2026. The transition, designed to ensure uninterrupted coverage for Safeco customers, highlights Mercury’s growing role in California’s turbulent insurance landscape.
Details of the Transition
Liberty Mutual, Safeco’s parent company and California’s fourth-largest home insurer, will recommend that its independent agents transfer affected renters, condo, and select auto policies to Mercury Insurance. The partnership aims to provide a seamless transition for policyholders, with Mercury leveraging its existing network of over 6,340 independent agents across 11 states to absorb these policies. “Mercury and Safeco have long had a healthy, competitive relationship, sharing a common desire to protect California consumers,” said Gabriel Tirador, Mercury’s CEO. “When Safeco approached us with the idea of transitioning their impacted customers into our portfolio, we saw an opportunity to be there for California consumers and agents when they need us most.”
For Safeco agents not currently appointed with Mercury, the company will begin vetting those interested in obtaining appointments, ensuring continuity in agent-customer relationships. “Safeco customers are similar to ours in terms of their coverage needs and their insurance agent relationships,” said Nick Colby, Mercury’s Vice President and Chief Sales Officer. This move mirrors Mercury’s 2023 acquisition of Tokio Marine’s personal lines business in California, reinforcing its commitment to the state’s market despite challenges like rising wildfire risks and regulatory hurdles.
Context of California’s Insurance Crisis
California’s insurance market has been under strain, with insurers like Safeco, State Farm, and Allstate scaling back due to costly wildfires, outdated regulations, and rising construction costs. Safeco, which insured about 4.4% of California’s property and casualty market in 2022, announced plans to exit the condo and renters markets by 2026, alongside specialty vehicle and non-good driver auto policies. In 2024, Safeco also faced a class-action lawsuit alleging wrongful non-renewals based on inaccurate aerial inspection reports, further complicating its operations.
Mercury, covering 3.6% of the state’s property and casualty market in 2022, continues to write homeowners policies in areas where others have retreated, positioning itself as an alternative to the California FAIR Plan, which has seen policies double to over 452,000 in 2024 due to private insurers pulling back. Mercury’s Q2 2025 earnings reported net premiums earned of $1.37 billion, up 10.6% year-over-year, despite $359 million in net wildfire-related losses, mitigated by $1.29 billion in reinsurance recoverables.
Implications and Public Sentiment
The partnership is a strategic win for Mercury, which is expanding its $4 billion market cap footprint in California while other insurers retreat. Liberty Mutual emphasized its ongoing commitment to the state, focusing on core auto, home, landlord, and liability products. “This partnership with Mercury ensures our customers have a seamless path for uninterrupted coverage,” said Luke Bills, Liberty Mutual’s President of Independent Agent Distribution.
Posts on X reflect broader concerns about California’s insurance market, with users like @AngelenoInsight noting widespread policy cancellations and premium hikes, and @HustleBitch_ highlighting State Farm’s abrupt cancellations in high-risk areas like Pacific Palisades. These sentiments underscore the challenges policyholders face as insurers navigate wildfire risks and regulatory constraints.
Looking Ahead
Mercury’s takeover of Safeco policies strengthens its position as a key player in California, where it has maintained competitive rates and an “A” rating from A.M. Best and Fitch. However, the transition comes amid broader market pressures, with state regulators approving a 12% rate hike for Mercury’s 579,300 homeowners policies in March 2025 and a 7.2% increase for Safeco’s 86,700 home insurance customers in May. As California’s Department of Insurance finalizes reforms to stabilize the market, Mercury’s ability to integrate Safeco’s customers while managing rising costs will be critical.
For more details, visit Mercury Insurance’s website or contact independent agents for policy transition information.