Mercury Insurance 2014 Annual Report Download - page 93

Download and view the complete annual report

Please find page 93 of the 2014 Mercury Insurance annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114


7KH &RPSDQ\ GHQLHV WKH DOOHJDWLRQV DQGRU ILQGLQJV LQ WKH  DQG  11& PDWWHUV DQG EHOLHYHV WKDW QR PRQHWDU\
SHQDOWLHV DUH ZDUUDQWHG DQG WKH &RPSDQ\ LQWHQGV WR YLJRURXVO\ GHIHQG LWVHOI DJDLQVW WKH DOOHJDWLRQV LQFOXGLQJ WKH 
DVVHVVHG ILQH XQOHVV D UHDVRQDEOH VHWWOHPHQW FDQ EH UHDFKHG $OWKRXJK WKH &RPSDQ\ LQWHQGV WR FRQWLQXH WR GHIHQG WKH DOOHJDWLRQV
LQ WKH  11& LW DFFUXHG D OLDELOLW\ DQG LQFXUUHG D FRUUHVSRQGLQJ H[SHQVH IRU WKH IXOO SURSRVHG SHQDOW\ DPRXQW LQ WKH 
11& PDWWHU LQ WKH WKUHH PRQWK DQG WZHOYH PRQWK SHULRGV HQGHG 'HFHPEHU   %DVHG XSRQ LWV XQGHUVWDQGLQJ RI WKH IDFWV
DQG WKH &DOLIRUQLD ,QVXUDQFH &RGH WKH &RPSDQ\ GRHV QRW H[SHFW WKDW WKH XOWLPDWH UHVROXWLRQ RI WKH  DQG  11& PDWWHUV
ZLOO EH PDWHULDO WR WKH &RPSDQ\µV ILQDQFLDO SRVLWLRQ 7KH &RPSDQ\ KDV DOVR DFFUXHG D OLDELOLW\ IRU WKH HVWLPDWHG FRVW WR FRQWLQXH
WR GHIHQG LWVHOI LQ WKH QRWLFH RI QRQFRPSOLDQFH PDWWHUV
/LWLJDWLRQ
7KH &RPSDQ\ LV IURP WLPH WR WLPH QDPHG DV D GHIHQGDQW LQ YDULRXV ODZVXLWV RU UHJXODWRU\ DFWLRQV LQFLGHQWDO WR LWV LQVXUDQFH
EXVLQHVV 7KH PDMRULW\ RI ODZVXLWV EURXJKW DJDLQVW WKH &RPSDQ\ UHODWH WR LQVXUDQFH FODLPV WKDW DULVH LQ WKH QRUPDO FRXUVH RI
EXVLQHVV DQG DUH UHVHUYHG IRU WKURXJK WKH UHVHUYLQJ SURFHVV )RU D GLVFXVVLRQ RI WKH &RPSDQ\µV UHVHUYLQJ PHWKRGV VHH 1RWH 
7KH &RPSDQ\ DOVR HVWDEOLVKHV UHVHUYHV IRU QRQLQVXUDQFH FODLPV UHODWHG ODZVXLWV UHJXODWRU\ DFWLRQV DQG RWKHU FRQWLQJHQFLHV
ZKHQ WKH &RPSDQ\ EHOLHYHV D ORVV LV SUREDEOH DQG LV DEOH WR HVWLPDWH LWV SRWHQWLDO H[SRVXUH )RU ORVV FRQWLQJHQFLHV EHOLHYHG WR EH
UHDVRQDEO\ SRVVLEOH WKH &RPSDQ\ DOVR GLVFORVHV WKH QDWXUH RI WKH ORVV FRQWLQJHQF\ DQG DQ HVWLPDWH RI WKH SRVVLEOH ORVV UDQJH RI
ORVV RU D VWDWHPHQW WKDW VXFK DQ HVWLPDWH FDQQRW EH PDGH :KLOH DFWXDO ORVVHV PD\ GLIIHU IURP WKH DPRXQWV UHFRUGHG DQG WKH
XOWLPDWH RXWFRPH RI WKH &RPSDQ\µV SHQGLQJ DFWLRQV LV JHQHUDOO\ QRW \HW GHWHUPLQDEOH WKH &RPSDQ\ GRHV QRW EHOLHYH WKDW WKH
XOWLPDWH UHVROXWLRQ RI FXUUHQWO\ SHQGLQJ OHJDO RU UHJXODWRU\ SURFHHGLQJV HLWKHU LQGLYLGXDOO\ RU LQ WKH DJJUHJDWH ZLOO KDYH D PDWHULDO
DGYHUVH HIIHFW RQ LWV ILQDQFLDO FRQGLWLRQ UHVXOWV RI RSHUDWLRQV RU FDVK IORZV
,Q DOO FDVHV WKH &RPSDQ\ YLJRURXVO\ GHIHQGV LWVHOI XQOHVV D UHDVRQDEOH VHWWOHPHQW DSSHDUV DSSURSULDWH
7KH &RPSDQ\ LV DOVR LQYROYHG LQ SURFHHGLQJV UHODWLQJ WR DVVHVVPHQWV DQG UXOLQJV PDGH E\ WKH )7% 6HH 1RWH 
5LVNV DQG8QFHUWDLQWLHV
0DQ\ EXVLQHVVHV DUH VWLOO H[SHULHQFLQJ WKH HIIHFWV RI XQFHUWDLQ FRQGLWLRQV LQ WKH JOREDO HFRQRP\ DQG FDSLWDO PDUNHWV UHGXFHG
FRQVXPHU VSHQGLQJ DQG FRQILGHQFH DQG FRQWLQXHG YRODWLOLW\ ZKLFK FRXOG DGYHUVHO\ LPSDFW WKH &RPSDQ\µV ILQDQFLDO FRQGLWLRQ
UHVXOWV RI RSHUDWLRQV DQG OLTXLGLW\ )XUWKHU WKH YRODWLOLW\ DQG GLVUXSWLRQV LQ JOREDO FDSLWDO PDUNHWV FRXOG DGYHUVHO\ DIIHFW WKH
&RPSDQ\µV LQYHVWPHQW SRUWIROLR $OWKRXJK WKH GLVUXSWLRQ LQ WKH JOREDO ILQDQFLDO PDUNHWV KDV PRGHUDWHG QRW DOO JOREDO ILQDQFLDO
PDUNHWV DUH IXQFWLRQLQJ QRUPDOO\ 7KH &RPSDQ\ LV XQDEOH WR SUHGLFW WKH LPSDFW RI FXUUHQW DQG IXWXUH JOREDO HFRQRPLF FRQGLWLRQV
RQ WKH 8QLWHG 6WDWHV DQG &DOLIRUQLD ZKHUH WKH PDMRULW\ RI WKH &RPSDQ\µV EXVLQHVV LV SURGXFHG
7KH &RPSDQ\ DSSOLHV WKH IDLU YDOXH RSWLRQ WR LWV LQYHVWPHQW SRUWIROLR 5DSLGO\ FKDQJLQJ DQG XQSUHFHGHQWHG FUHGLW DQG
HTXLW\ PDUNHW FRQGLWLRQV FRXOG PDWHULDOO\ LPSDFW WKH YDOXDWLRQ RI VHFXULWLHV DV UHSRUWHG ZLWKLQ WKH &RPSDQ\µV ILQDQFLDO VWDWHPHQWV
DQG WKH SHULRGWRSHULRG FKDQJHV LQ YDOXH FRXOG YDU\ VLJQLILFDQWO\ 'HFUHDVHV LQ PDUNHW YDOXH PD\ KDYH D PDWHULDO DGYHUVH HIIHFW
RQ WKH &RPSDQ\µV ILQDQFLDO FRQGLWLRQ RU UHVXOWV RI RSHUDWLRQV