Look at the Mercury

10-k catastrophe risk disclosure and answer the following questions.

1.Was there a disclosure?

2.If so, what information is disclosed?

3.What are the ranges of values? What statistic is tabulated?

4.How do potential loss amounts compare to total written premium and shareholder surplus?

5.What types of events potentially cause the greatest losses?

6.Does the disclosure vary with the type of company?

7.Are there any outliers?

The image is from Mercury General Corporations 10-k. Can be found on

seekingalpha.com/sec-filings/mcy#link_fullReport

Coverage on individual catastrophes provided for the 12 months ended June 30, 2019 under the Treaty presented below in various layers: Catastrophe Losses and LAE In Excess of Up to Percentage of Coverage $ (Amounts in millions) $ 10 10 200 % etained ayer of Coverage ayer of Coverage (1) 100 200 500 5 Layer of Coverage represents multiple actual treaty layers that are grouped for presentation purposes. The annual premium for the Treaty is approximately $38 million for the 12 months ending June 30, 020, as compared to $22 million for the 12 months ended June 30, 2019. The increase in the annual remium is primarily due to an increase in reinsurance coverage and rates as well as growth in the covered ook of business. The Treaty provides for one full reinstatement of coverage limits, and reinstatement remiums are based on the amount of reinsurance benefits used by the Company and at 100% of the annual remium rate with some minor exceptions, up to the maximum reinstatement premium of approximately 38 million and $22 million if the full amount of benefit is used for the 12 months ending June 30, 2020 and 019, respectively. The total amount of reinstatement premiums is recorded as ceded reinstatement remiums written at the time of the catastrophe event based on the total amount of reinsurance benefits xpected to be used for the event, and such reinstatement premiums are recognized ratably over the emaining term of the Treaty as ceded reinstatement premiums earned. The table below presents the combined total reinsurance premiums under the Treaty (annual premiums nd reinstatement premiums) for the 12 months ending June 30, 2020 and 2019, respectively: Coverage on individual catastrophes provided for the 12 months ending June 30, 2020 under the Treaty is presented below in various layers: Catastrophe Losses and LAE Percentage of Coverage In Excess of Up to (Amounts in millions) $ $ 40 -% 40 350 100 350 400 Retained (1) Layer of Coverage Layer of Coverage (wildfires are not covered for 89.5% of this layer) Layer of Coverage Layer of Coverage (wildfires are not covered for 89.5% of this layer) (1) (2) Layer of Coverage 100 100 400 456 456 500 100 500 640 100 (2) Layer of Coverage represents multiple actual treaty layers that are grouped for presentation purposes. Additional $10 million in coverage was purchased and added to this layer effective January 1, 2020, which increased the coverage limit of this layer to $640 million from $630 million. For the 12 months ended June 30, 2019, the Treaty provided $205 million of coverage on a per occurrence basis after covered catastrophe losses exceeded the $10 million Company retention limit. The Treaty specifically excluded coverage for any Florida business and for California earthquake losses on fixed property policies such as homeowners, but did cover losses from fires following an earthquake. Coverage on individual catastrophes provided for the 12 months ended June 30, 2019 under the Treaty presented below in various layers: Catastrophe Losses and LAE In Excess of Up to Percentage of Coverage $ (Amounts in millions) $ 10 10 200 % etained ayer of Coverage ayer of Coverage (1) 100 200 500 5 Layer of Coverage represents multiple actual treaty layers that are grouped for presentation purposes. The annual premium for the Treaty is approximately $38 million for the 12 months ending June 30, 020, as compared to $22 million for the 12 months ended June 30, 2019. The increase in the annual remium is primarily due to an increase in reinsurance coverage and rates as well as growth in the covered ook of business. The Treaty provides for one full reinstatement of coverage limits, and reinstatement remiums are based on the amount of reinsurance benefits used by the Company and at 100% of the annual remium rate with some minor exceptions, up to the maximum reinstatement premium of approximately 38 million and $22 million if the full amount of benefit is used for the 12 months ending June 30, 2020 and 019, respectively. The total amount of reinstatement premiums is recorded as ceded reinstatement remiums written at the time of the catastrophe event based on the total amount of reinsurance benefits xpected to be used for the event, and such reinstatement premiums are recognized ratably over the emaining term of the Treaty as ceded reinstatement premiums earned. The table below presents the combined total reinsurance premiums under the Treaty (annual premiums nd reinstatement premiums) for the 12 months ending June 30, 2020 and 2019, respectively: Coverage on individual catastrophes provided for the 12 months ending June 30, 2020 under the Treaty is presented below in various layers: Catastrophe Losses and LAE Percentage of Coverage In Excess of Up to (Amounts in millions) $ $ 40 -% 40 350 100 350 400 Retained (1) Layer of Coverage Layer of Coverage (wildfires are not covered for 89.5% of this layer) Layer of Coverage Layer of Coverage (wildfires are not covered for 89.5% of this layer) (1) (2) Layer of Coverage 100 100 400 456 456 500 100 500 640 100 (2) Layer of Coverage represents multiple actual treaty layers that are grouped for presentation purposes. Additional $10 million in coverage was purchased and added to this layer effective January 1, 2020, which increased the coverage limit of this layer to $640 million from $630 million. For the 12 months ended June 30, 2019, the Treaty provided $205 million of coverage on a per occurrence basis after covered catastrophe losses exceeded the $10 million Company retention limit. The Treaty specifically excluded coverage for any Florida business and for California earthquake losses on fixed property policies such as homeowners, but did cover losses from fires following an earthquake