MERCURY GENERAL CORPMCY
MERCURY GENERAL CORP Segments Disclosure
Segment Information
The Company is primarily engaged in writing personal automobile insurance and provides related property and casualty insurance products to its customers through 12 subsidiaries in 11 states, principally in California. The Company has one reportable business segment - the Property and Casualty business segment.
The Company’s Chief Operating Decision Maker ("CODM") consists of chairman of the board of directors and chief executive officer. The CODM reviews operating results based on pre-tax underwriting results which is calculated as net premiums earned less (a) losses and loss adjustment expenses and (b) underwriting expenses (policy acquisition costs and other operating expenses). The CODM evaluates operating results by line of insurance business that is further segregated by state to obtain a more disaggregated view of the Company’s operations. These operating results provide the CODM with significant information in making key operating decisions that include making price adjustments, hiring additional resources, and redeploying resources to a different line of insurance business or a different state. The lines of insurance business largely consist of private passenger automobile insurance, homeowners insurance, commercial automobile insurance, commercial property insurance, and automobile mechanical protection warranties.
The Company manages its business operations under one reportable business segment and one non-reportable business segment based on lines of insurance business. In identifying its reportable and non-reportable business segments, the Company considered the financial information provided to its CODM. After considering various factors, including the development and utilization of financial data provided to the CODM, the Company concluded that identifying its operating segments by line of insurance business was consistent with the objectives of ASC 280-10. Certain operating segments have been aggregated based on similar characteristics, including the nature of products and services provided, the method used to deliver those products and services, types of customers, and the nature of the regulatory environment, to arrive at the Company’s reportable business segment (Property and Casualty Lines) and its non-reportable business segment (Other Lines).
Expenses are allocated based on certain assumptions that are primarily related to premiums and losses. The Company’s net investment income, net realized investment gains (losses), 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.
Property and Casualty Lines
The Property and Casualty Lines business segment offers several insurance products to the Company’s individual
customers and small business customers. The major insurance products (lines of insurance business) 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 passenger 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.
Other Lines
The Other Lines business segment represents an operating segment that does not meet the quantitative thresholds required to be considered a reportable segment. This operating segment offers automobile mechanical protection warranties which are primarily sold through automobile dealerships and credit unions.
The following table presents operating results by reportable segment for the years ended:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Property & Casualty | Other | Total | Property & Casualty | Other | Total | Property & Casualty | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net premiums earned | $ | 5,476.1 | $ | 29.5 | $ | 5,505.6 | $ | 5,046.1 | $ | 29.4 | $ | 5,075.5 | $ | 4,245.4 | $ | 29.0 | $ | 4,274.4 | |||||||||||||||||||||||||||||||||||
| Less: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Losses | 3,338.5 | 14.9 | 3,353.4 | 3,156.4 | 14.9 | 3,171.3 | 3,019.4 | 13.7 | 3,033.1 | ||||||||||||||||||||||||||||||||||||||||||||
| Loss adjustment expenses | 607.6 | 2.0 | 609.6 | 511.3 | 1.9 | 513.2 | 482.8 | 2.0 | 484.8 | ||||||||||||||||||||||||||||||||||||||||||||
| Losses and loss adjustment expenses | 3,946.1 | 16.9 | 3,963.0 | 3,667.7 | 16.8 | 3,684.5 | 3,502.2 | 15.7 | 3,517.9 | ||||||||||||||||||||||||||||||||||||||||||||
| Policy acquisition costs | 929.7 | 13.2 | 942.9 | 846.6 | 11.7 | 858.3 | 696.9 | 11.6 | 708.5 | ||||||||||||||||||||||||||||||||||||||||||||
| Other operating expenses | 391.2 | 3.1 | 394.3 | 324.1 | 3.1 | 327.2 | 276.6 | 3.1 | 279.7 | ||||||||||||||||||||||||||||||||||||||||||||
| Underwriting gain (loss) | 209.1 | (3.7) | 205.4 | 207.7 | (2.2) | 205.5 | (230.3) | (1.4) | (231.7) | ||||||||||||||||||||||||||||||||||||||||||||
| Investment income | 328.7 | 280.0 | 234.6 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net realized investment gains | 131.4 | 88.7 | 101.0 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 26.7 | 31.5 | 19.7 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (28.6) | (30.8) | (24.2) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Pre-tax income | $ | 663.6 | $ | 574.9 | $ | 99.4 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | $ | 541.1 | $ | 468.0 | $ | 96.3 | |||||||||||||||||||||||||||||||||||||||||||||||
The following table presents the Company’s net premiums earned and direct premiums written by line of insurance business for the years ended:
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Property & Casualty | Other | Total | Property & Casualty | Other | Total | Property & Casualty | Other | Total | |||||||||||||||||||||||||||||||||||||||||||||
| (Amounts in millions) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Private passenger automobile | $ | 3,552.6 | $ | — | $ | 3,552.6 | $ | 3,278.5 | $ | — | $ | 3,278.5 | $ | 2,796.1 | $ | — | $ | 2,796.1 | |||||||||||||||||||||||||||||||||||
| Homeowners | 1,260.9 | — | 1,260.9 | 1,168.7 | — | 1,168.7 | 957.7 | — | 957.7 | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial automobile | 384.4 | — | 384.4 | 378.2 | — | 378.2 | 303.9 | — | 303.9 | ||||||||||||||||||||||||||||||||||||||||||||
| Other | 278.2 | 29.5 | 307.7 | 220.7 | 29.4 | 250.1 | 187.7 | 29.0 | 216.7 | ||||||||||||||||||||||||||||||||||||||||||||
| Net premiums earned | $ | 5,476.1 | $ | 29.5 | $ | 5,505.6 | $ | 5,046.1 | $ | 29.4 | $ | 5,075.5 | $ | 4,245.4 | $ | 29.0 | $ | 4,274.4 | |||||||||||||||||||||||||||||||||||
| Private passenger automobile | $ | 3,591.2 | $ | — | $ | 3,591.2 | $ | 3,395.8 | $ | — | $ | 3,395.8 | $ | 2,841.8 | $ | — | $ | 2,841.8 | |||||||||||||||||||||||||||||||||||
| Homeowners | 1,630.9 | — | 1,630.9 | 1,367.3 | — | 1,367.3 | 1,119.0 | — | 1,119.0 | ||||||||||||||||||||||||||||||||||||||||||||
| Commercial automobile | 387.4 | — | 387.4 | 387.0 | — | 387.0 | 346.2 | — | 346.2 | ||||||||||||||||||||||||||||||||||||||||||||
| Other | 345.5 | 27.5 | 373.0 | 324.2 | 26.5 | 350.7 | 224.9 | 26.6 | 251.5 | ||||||||||||||||||||||||||||||||||||||||||||
| Direct premiums written | $ | 5,955.0 | $ | 27.5 | $ | 5,982.5 | $ | 5,474.3 | $ | 26.5 | $ | 5,500.8 | $ | 4,531.9 | $ | 26.6 | $ | 4,558.5 | |||||||||||||||||||||||||||||||||||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 11, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 15, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 12, 2020 | |
| 2018 | Feb 13, 2019 | |
| 2017 | Feb 8, 2018 | |
| 2016 | Feb 9, 2017 | |
| 2015 | Feb 9, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.