XML 46 R28.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Condensed Financial Information of Registrant | 12 Months Ended
--- | ---
Dec. 31, 2023
Condensed Financial Information Disclosure [Abstract] |
Condensed Financial Information of Registrant |
| December 31,
| 2023 |  | 2022
| (Amounts in thousands)
ASSETS |  |  |
Investments, at fair value: |  |  |
Fixed maturity securities (amortized cost $9,979; $10,908) | $ | 9,949 |  |  | $ | 10,907 |
Equity securities (cost $17,227; $35,041) | 28,027 |  |  | 51,416 |
Short-term investments (cost $571; $27,057) | 571 |  |  | 27,059 |
Investment in subsidiaries | 2,084,346 |  |  | 1,833,372 |
Total investments | 2,122,893 |  |  | 1,922,754 |
Cash | 4,698 |  |  | 6,218 |
Accrued investment income | 141 |  |  | 149 |
Amounts receivable from affiliates | 503 |  |  | 516 |
Current income taxes | 5,148 |  |  | 55,777 |
Deferred income taxes | 1,544 |  |  | 1,072 |
Income tax receivable from affiliates | 15,161 |  |  | 12,865 |
Other assets | 1,499 |  |  | 1,493 |
Total assets | $ | 2,151,587 |  |  | $ | 2,000,844 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |
Notes payable | $ | 573,729 |  |  | $ | 398,330 |
Amounts payable to affiliates | 2,753 |  |  | 90 |
Income tax payable to affiliates | 21,209 |  |  | 75,079 |
Other liabilities | 5,751 |  |  | 5,214 |
Total liabilities | 603,442 |  |  | 478,713 |
Commitments and contingencies |  |  |
Shareholders’ equity: |  |  |
Common stock | 98,947 |  |  | 98,947 |
Retained earnings | 1,449,198 |  |  | 1,423,184 |
Total shareholders’ equity | 1,548,145 |  |  | 1,522,131 |
Total liabilities and shareholders’ equity | $ | 2,151,587 |  |  | $ | 2,000,844 |
SCHEDULE II, Continued MERCURY GENERAL CORPORATION CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF OPERATIONS
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (Amounts in thousands)
Revenues: |  |  |  |  |
Net investment income | $ | 2,998 |  |  | $ | 2,696 |  |  | $ | 2,560 |
Net realized investment gains (losses) | 1,431 |  |  | (12,969) |  |  | 26,523 |
Total revenues | 4,429 |  |  | (10,273) |  |  | 29,083 |
Expenses: |  |  |  |  |
Other operating expenses | 2,526 |  |  | 2,446 |  |  | 2,627 |
Interest | 24,129 |  |  | 17,178 |  |  | 17,088 |
Total expenses | 26,655 |  |  | 19,624 |  |  | 19,715 |
(Loss) income before income taxes and equity in net income (loss) of subsidiaries | (22,226) |  |  | (29,897) |  |  | 9,368 |
Income tax (benefit) expense | (4,379) |  |  | (10,234) |  |  | 4,930 |
(Loss) income before equity in net income (loss) of subsidiaries | (17,847) |  |  | (19,663) |  |  | 4,438 |
Equity in net income (loss) of subsidiaries | 114,183 |  |  | (493,009) |  |  | 243,499 |
Net income (loss) | $ | 96,336 |  |  | $ | (512,672) |  |  | $ | 247,937 |
SCHEDULE II, Continued MERCURY GENERAL CORPORATION CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS
| Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (Amounts in thousands)
Cash flows from operating activities: |  |  |  |  |
Net cash (used in) provided by operating activities | $ | (14,703) |  |  | $ | 225 |  |  | $ | (36,662) |
Cash flows from investing activities: |  |  |  |  |
Capital contribution to subsidiaries | (150,000) |  |  | — |  |  | — |
Capital distribution from subsidiaries | — |  |  | 3,431 |  |  | — |
Distributions received from special purpose entities | 6,210 |  |  | 2,904 |  |  | 5,199 |
Dividends received from subsidiaries | — |  |  | — |  |  | 191,000 |
Fixed maturity securities available for sale in nature |  |  |  |  |
Purchases | — |  |  | (11,905) |  |  | — |
Sales | — |  |  | 1,000 |  |  | — |
Calls or maturities | 955 |  |  | — |  |  | — |
Equity securities available for sale in nature |  |  |  |  |
Purchases | (1,172) |  |  | (5,307) |  |  | (13,151) |
Sales | 25,848 |  |  | 48,215 |  |  | 38,092 |
Decrease (increase) in short-term investments | 26,481 |  |  | (6,268) |  |  | (16,172) |
Other, net | 183 |  |  | 667 |  |  | 791 |
Net cash (used in) provided by investing activities | (91,495) |  |  | 32,737 |  |  | 205,759 |
Cash flows from financing activities: |  |  |  |  |
Dividends paid to shareholders | (70,322) |  |  | (105,482) |  |  | (140,226) |
Proceeds from stock options exercised | — |  |  | — |  |  | 215 |
Proceeds from bank loan | 175,000 |  |  | 25,000 |  |  | — |
Net cash provided by (used in) financing activities | 104,678 |  |  | (80,482) |  |  | (140,011) |
Net (decrease) increase in cash | (1,520) |  |  | (47,520) |  |  | 29,086 |
Cash: |  |  |  |  |
Beginning of year | 6,218 |  |  | 53,738 |  |  | 24,652 |
End of year | $ | 4,698 |  |  | $ | 6,218 |  |  | $ | 53,738 |
SUPPLEMENTAL CASH FLOW DISCLOSURE |  |  |  |  |
Interest paid | $ | 22,959 |  |  | $ | 16,611 |  |  | $ | 16,590 |
Income taxes paid (refunded), net | $ | 1,630 |  |  | $ | (14,102) |  |  | $ | 18,841 |
The accompanying condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in this report. Distributions received from Special Purpose Investment Vehicles From time to time, the Company forms special purpose investment vehicles to facilitate its investment activities involving derivative instruments such as total return swaps, or limited partnerships such as private equity funds. For the three years ended December 31, 2023, the Company had two such special purpose investment vehicles: Fannette Funding LLC and Animas Funding LLC. These special purpose investment vehicles are consolidated into the Company. Creditors have no recourse against the Company in the event of default by these special purpose investment vehicles. The Company had no implied or unfunded commitments to these entities at December 31, 2023 and 2022. The Company's financial or other support provided to these entities and its loss exposure are limited to its collateral and original investment. Mercury General received distributions of $6.2 million, $2.9 million, and $5.2 million in 2023, 2022, and 2021, respectively, from these special purpose investment vehicles. Dividends received from Subsidiaries Dividends of $0, $0 and $191 million were received by Mercury General from its 100% owned insurance subsidiaries in 2023, 2022 and 2021, respectively, and were recorded as a reduction to investment in subsidiaries. Capitalization of Insurance Subsidiaries Mercury General made capital contributions to its insurance subsidiaries of $150 million, $0 and $0 in 2023, 2022 and 2021, respectively. In addition, Mercury General received a capital distribution from its insurance subsidiaries of $0, $3,431,433, and $0 in 2023, 2022 and 2021, respectively. The capital distribution for 2022 was related to the dissolution of an insurance subsidiary in November 2022, pursuant to which Mercury General received the complete return of its invested capital. Notes Payable On March 8, 2017, Mercury General completed a public debt offering issuing $375 million of senior notes. The notes are unsecured senior obligations of Mercury General, with a 4.4% annual coupon payable on March 15 and September 15 of each year commencing September 15, 2017. These notes mature on March 15, 2027. The Company used the proceeds from the notes to pay off the total outstanding balance of $320 million under the existing loan and credit facility agreements and terminated the agreements on March 8, 2017. The remainder of the proceeds from the notes was used for general corporate purposes. Mercury General incurred debt issuance costs of approximately $3.4 million, inclusive of underwriters' fees. The notes were issued at a slight discount of 99.847% of par, resulting in the effective annualized interest rate, including debt issuance costs, of approximately 4.45%. On March 31, 2021, the Company entered into an unsecured $75 million five-year revolving credit facility. On November 18, 2022, the Company entered into the First Amendment to this credit facility. The First Amendment extended the maturity date of the loan to November 16, 2026 from March 31, 2026 with possible further extension if certain conditions are met, increased the aggregate commitments by all the lenders to $200 million from $75 million, and replaced the LIBOR with the term SOFR. On November 30, 2023, the Company entered into the Second Amendment to this credit facility, which further increased the aggregate commitments by all the lenders to $250 million from $200 million. The interest rates on borrowings under the credit facility are based on the Company's debt to total capital ratio and range from Term SOFR plus 112.5 basis points when the ratio is under 20% to Term SOFR plus 150.0 basis points when the ratio is greater than or equal to 30%. Commitment fees for the undrawn portions of the credit facility range from 12.5 basis points when the ratio is under 20% to 22.5 basis points when the ratio is greater than or equal to 30%. The debt to total capital ratio is expressed as a percentage of (a) consolidated debt to (b) consolidated shareholders' equity plus consolidated debt. The Company's debt to total capital ratio was 27.1% at December 31, 2023, resulting in a 17.5 basis point commitment fee on any undrawn portion of the credit facility. As of February 13, 2024, a total of $200 million was drawn under this facility on a three-month revolving basis at an annual interest rate of approximately 6.84%, with $50 million available to be drawn. The Company contributed $150 million of the total amount drawn to the surplus of its consolidated insurance subsidiaries, and used the remainder for general corporate purposes. Federal Income Taxes The Company files a consolidated federal income tax return for the following entities:
Mercury Casualty Company |  | Mercury Indemnity Company of America
Mercury Insurance Company |  | Mercury Select Management Company, Inc.
California Automobile Insurance Company |  | Mercury Insurance Services LLC
California General Underwriters Insurance Company, Inc. |  | AIS Management LLC
Mercury Insurance Company of Illinois |  | Auto Insurance Specialists LLC
Mercury Insurance Company of Georgia |  | PoliSeek AIS Insurance Solutions, Inc.
Mercury Indemnity Company of Georgia |  | Animas Funding LLC
American Mercury Insurance Company |  | Fannette Funding LLC
American Mercury Lloyds Insurance Company |  | Mercury Plus Insurance Services LLC
Orion Indemnity Company |  | Mercury Information Technology Services LLC
Mercury County Mutual Insurance Company |  | Mercury (Shanghai) Information Technology Services Co., Ltd.
The method of allocation between the companies is subject to an agreement approved by the Board of Directors. Allocation is based upon separate return calculations with current credit for net losses incurred by the insurance subsidiaries to the extent it can be used in the current consolidated return.

X
- References No definition available. + Details
Name: | srt_CondensedFinancialInformationOfParentCompanyOnlyDisclosureAbstract
Namespace Prefix: | srt_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04(a)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 205 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04(Schedule I)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480922/205-10-S99-6 Reference 3: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 810 -SubTopic 10 -Name Accounting Standards Codification -Section 45 -Paragraph 11 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481231/810-10-45-11 + Details
Name: | us-gaap_CondensedFinancialInformationOfParentCompanyOnlyDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration