Mercury Insurance 2015 Annual Report Download - page 86

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74
(Losses) Gains Recognized in Income
Year Ended December 31,
2015 2014 2013
(Amounts in thousands)
Total return swaps - Net realized investment (losses) gains $(6,438)$ (2,969) $ 2,176
Options sold - Net realized investment gains 3,081 3,419 1,776
Interest rate contract - Other revenue — — 103
Total $(3,357) $ 450 $ 4,055
Most options sold consist of covered calls. The Company writes covered calls on underlying equity positions held as an
enhanced income strategy that is permitted for the Company’s insurance subsidiaries under statutory regulations. The Company
manages the risk associated with covered calls through strict capital limitations and asset diversification throughout various
industries. For additional disclosures regarding equity contracts, see Note 4. Fair Value Measurement.
9. Other Intangible Assets
The following table presents the components of other intangible assets:
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount Useful Lives
(Amounts in thousands) (in years)
As of December 31, 2015:
Customer relationships $ 52,430 $ (34,327) $ 18,103 11
Trade names 15,400 (4,491) 10,909 24
Technology 4,300 (3,010) 1,290 10
Insurance license 1,400 — 1,400 Indefinite
Total intangible assets, net $ 73,530 $ (41,828) $ 31,702
As of December 31, 2014:
Customer relationships $ 51,755 $ (29,402) $ 22,353 11
Trade names 15,400 (3,850) 11,550 24
Technology 4,300 (2,580) 1,720 10
Total intangible assets, net $ 71,455 $ (35,832) $ 35,623
The Company recognized $1.4 million of other intangible assets for a state insurance license related to the acquisition of
Workmen's Auto Insurance Company. See Note 20. Acquisition for the acquisition's cost allocation.
Other intangible assets are reviewed annually for impairment and more frequently if potential impairment indicators exist.
No impairment indicators were identified during any of the periods presented.
Other intangible assets with definite useful lives are amortized on a straight-line basis over their useful lives. Other intangible
assets amortization expense was $6.0 million in each of the years ended December 31, 2015, 2014, and 2013. None of the intangible
assets with definite useful lives are anticipated to have a residual value.