What are Mercury General's Business Segments?
Property and Casualty Lines
The Property and Casualty business segment offers several insurance products to
the Company’s individual customers and small business customers. These insurance
products are: private passenger automobile which is the Company’s primary
business, and related insurance products such as homeowners, commercial automobile
and commercial property. These insurance products are primarily sold to the Company’s
individual customers and small business customers, which increases retention of
the Company’s private personal automobile client base. The insurance products
comprising the Property and Casualty business segment are sold through the same
distribution channels, mainly through independent and 100% owned insurance agents,
and go through a similar underwriting process.
The Company’s Chief Operating Decision Maker evaluates operating results
based on pre-tax underwriting results which is calculated as net premiums earned
less (i) incurred losses and loss adjustment expenses; and (ii) underwriting expenses
(policy acquisition costs and other operating expenses).
Expenses are allocated based on certain assumptions that are primarily related
to premiums and losses. The Company’s net investment income, net realized
investment (losses) gains, other income, and interest expense are excluded in
evaluating pre-tax underwriting profit. The Company does not allocate its assets,
including investments, or income taxes in evaluating pre-tax underwriting profit.
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