By George Glover

Mercury General stock was plummeting on Friday, with the Los Angeles wildfires likely to leave the insurer covering hundreds of millions of dollars worth of losses.

Shares crashed 31% to $39.99 ahead of the opening bell. Futures tracking the S&P 500 were down 0.9%.

Other insurance stocks Allstate, Travelers, and Chubb were down less than 5%. Mercury's massive losses reflect its high exposure to California -- it has a 6.1% share of the homeowners insurance market there, and almost 80% of its premiums of $4.6 billion last year came from the state. Relative to its size, it's likely more exposed to the fires than any other public property and casualty insurer.

J.P. Morgan expects blaze to result in at least $20 billion in total insurable losses, which would make it the costliest fire in U.S. history. The 2018 Camp Fire, which accounted for $10 billion in losses, resulted in gross losses of $206 million for Mercury.

In a research note published Friday, Raymond James analyst C. Gregory Peters cut his first-quarter earnings estimate for Mercury to $0 a share, down from $1.60 a share previously. He still rates the stock at Outperform, with an $80 target price that implies it could double from its level in Friday's premarket.

Write to George Glover at george.glover@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 10, 2025 08:43 ET (13:43 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.