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Segment Information
 12 Months Ended
Dec. 31, 2017
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 14 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 (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 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.
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 table presents operating results by reportable segment for the years ended:

 
December 31, 2017
 
December 31, 2016
 
December 31, 2015
 
Property & Casualty
 
Other
 
Total
 
Property & Casualty
 
Other
 
Total
 
Property & Casualty
 
Other
 
Total
 
(Amounts in millions)
Net premiums earned
$
3,160.9

 
$
34.5

 
$
3,195.4

 
$
3,089.9

 
$
41.9

 
$
3,131.8

 
$
2,906.6

 
$
51.3

 
$
2,957.9

Less:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Losses and loss adjustment expenses
2,427.8

 
17.1

 
2,444.9

 
2,333.2

 
21.9

 
2,355.1

 
2,117.3

 
28.2

 
2,145.5

Underwriting expenses
773.1

 
15.6

 
788.7

 
780.4

 
17.5

 
797.9

 
770.0

 
20.0

 
790.0

Underwriting (loss) gain
(40.0
)
 
1.8

 
(38.2
)
 
(23.7
)
 
2.5

 
(21.2
)
 
19.3

 
3.1

 
22.4

Investment income
 
 
 
 
124.9

 
 
 
 
 
121.9

 
 
 
 
 
126.3

Net realized investment gains (losses)
 
 
 
 
83.7

 
 
 
 
 
(34.3
)
 
 
 
 
 
(83.8
)
Other income
 
 
 
 
11.9

 
 
 
 
 
8.3

 
 
 
 
 
8.9

Interest expense
 
 
 
 
(15.2
)
 
 
 
 
 
(4.0
)
 
 
 
 
 
(3.2
)
Pre-tax income
 
 
 
 
$
167.1

 
 
 
 
 
$
70.7

 
 
 
 
 
$
70.6

Net income


 


 
$
144.9

 
 
 
 
 
$
73.0

 
 
 
 
 
$
74.5


The following table presents the Company’s net premiums earned and direct premiums written by line of insurance business for the years ended:
 
December 31, 2017
 
December 31, 2016
 
December 31, 2015
 
Property & Casualty
 
Other
 
Total
 
Property & Casualty
 
Other
 
Total
 
Property & Casualty
 
Other
 
Total
 
(Amounts in millions)
Private passenger automobile
$
2,473.8

 
$
—

 
$
2,473.8

 
$
2,435.7

 
$
—

 
$
2,435.7

 
$
2,308.6

 
$
—

 
$
2,308.6

Homeowners
431.6

 
—

 
431.6

 
414.0

 
—

 
414.0

 
379.7

 
—

 
379.7

Commercial automobile
171.9

 
—

 
171.9

 
161.3

 
—

 
161.3

 
144.4

 
—

 
144.4

Other
83.6

 
34.5

 
118.1

 
78.9

 
41.9

 
120.8

 
73.9

 
51.3

 
125.2

Net premiums earned
$
3,160.9

 
$
34.5

 
$
3,195.4

 
$
3,089.9

 
$
41.9

 
3,131.8

 
$
2,906.6

 
$
51.3

 
$
2,957.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private passenger automobile
$
2,480.0

 
$
—

 
$
2,480.0

 
$
2,452.7

 
$
—

 
$
2,452.7

 
$
2,345.8

 
$
—

 
$
2,345.8

Homeowners
469.9

 
—

 
469.9

 
436.9

 
—

 
436.9

 
402.2

 
—

 
402.2

Commercial automobile
178.2

 
—

 
178.2

 
166.1

 
—

 
166.1

 
153.5

 
—

 
153.5

Other
92.9

 
27.9

 
120.8

 
89.0

 
27.3

 
116.3

 
81.6

 
29.8

 
111.4

Direct premiums written
$
3,221.0

 
$
27.9

 
$
3,248.9

 
$
3,144.7

 
$
27.3

 
$
3,172.0

 
$
2,983.1

 
$
29.8

 
$
3,012.9