Segment Information

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Segment Information

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 evaluates 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).

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 or losses, other income, and interest expense are excluded in evaluating pretax 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 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 related 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 business segment represents net premiums written and earned from 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 tables present the Company's operating results by reportable segment:

	Three Months Ended June 30,
	2023						2022
	Property & Casualty		Other		Total		Property & Casualty		Other		Total
	(Amounts in millions)
Net premiums earned	$	1,027.3	$	7.2	$	1,034.5	$	980.3	$	7.2	$	987.5
Less:
Losses and loss adjustment expenses	893.9		3.9		897.8		823.0		3.8		826.8
Underwriting expenses	237.4		3.8		241.2		224.5		1.4		225.9
Underwriting (loss) gain	(104.0)		(0.5)		(104.5)		(67.2)		2.0		(65.2)
Investment income					58.4						38.6
Net realized investment losses					(19.8)						(241.9)
Other income					10.2						1.5
Interest expense					(5.5)						(4.3)
Pre-tax loss					$	(61.2)					$	(271.3)
Net loss					$	(41.5)					$	(210.7)

	Six Months Ended June 30,
	2023						2022
	Property & Casualty		Other		Total		Property & Casualty		Other		Total
	(Amounts in millions)
Net premiums earned	$	2,024.8	$	14.4	$	2,039.2	$	1,935.7	$	14.4	$	1,950.1
Less:
Losses and loss adjustment expenses	1,819.7		7.6		1,827.3		1,641.3		7.4		1,648.7
Underwriting expenses	468.0		7.3		475.3		453.7		4.7		458.4
Underwriting (loss) gain	(262.9)		(0.5)		(263.4)		(159.3)		2.3		(157.0)
Investment income					110.3						73.9
Net realized investment gains (losses)					29.2						(437.0)
Other income					11.1						4.1
Interest expense					(10.5)						(8.5)
Pre-tax loss					$	(123.3)					$	(524.5)
Net loss					$	(86.8)					$	(407.6)

The following tables present the Company’s net premiums earned and direct premiums written by reportable segment and line of insurance business:

	Three Months Ended June 30,
	2023						2022
	Property & Casualty		Other		Total		Property & Casualty		Other		Total
	(Amounts in millions)
Private passenger automobile	$	674.7	$	—	$	674.7	$	666.0	$	—	$	666.0
Homeowners	233.9		—		233.9		205.9		—		205.9
Commercial automobile	72.1		—		72.1		66.1		—		66.1
Other	46.6		7.2		53.8		42.3		7.2		49.5
Net premiums earned	$	1,027.3	$	7.2	$	1,034.5	$	980.3	$	7.2	$	987.5
Private passenger automobile	$	698.5	$	—	$	698.5	$	653.8	$	—	$	653.8
Homeowners	294.5		—		294.5		251.8		—		251.8
Commercial automobile	82.7		—		82.7		69.8		—		69.8
Other	56.5		7.3		63.8		50.3		8.4		58.7
Direct premiums written	$	1,132.2	$	7.3	$	1,139.5	$	1,025.7	$	8.4	$	1,034.1

	Six Months Ended June 30,
	2023						2022
	Property & Casualty		Other		Total		Property & Casualty		Other		Total
	(Amounts in millions)
Private passenger automobile	$	1,335.3			$	1,335.3	$	1,325.3	$	—	$	1,325.3
Homeowners	456.4				456.4		397.9		—		397.9
Commercial automobile	141.2				141.2		130.6		—		130.6
Other	91.9		14.4		106.3		81.9		14.4		96.3
Net premiums earned	$	2,024.8	$	14.4	$	2,039.2	$	1,935.7	$	14.4	$	1,950.1
Private passenger automobile	$	1,332.8			$	1,332.8	$	1,335.0	$	—	$	1,335.0
Homeowners	536.1				536.1		462.1		—		462.1
Commercial automobile	162.7				162.7		141.4		—		141.4
Other	112.9		13.5		126.4		98.6		15.2		113.8
Direct premiums written	$	2,144.5	$	13.5	$	2,158.0	$	2,037.1	$	15.2	$	2,052.3