Segment Information

9 Months Ended

Sep. 30, 2011

(14)

Segment Information

The Company's operations are organized into three segments: agribusiness, commercial business, and other. These segments reflect the manner in which the Company currently manages the business based on type of customer, how the business is marketed, and the manner in which risks are underwritten. Within each segment, the Company underwrites and markets its insurance products through a packaged offering of coverages sold to generally consistent types of customers.

The other segment includes the runoff of discontinued lines of insurance business and the results of mandatory assigned risk reinsurance programs that the Company must participate in as a cost of doing business in the states in which the Company operates. The discontinued lines of insurance business include personal lines, which the Company began exiting in 2001, and assumed reinsurance contracts for which the Company participated on a voluntary basis. Participation in these assumed reinsurance contracts ceased in the 1980s and early 1990s.

Segment information for the three months and nine months ended September 30, 2011 and 2010 is as follows:


	For the three months ended						For the nine months ended
	September 30,						September 30,
	2011			2010			2011			2010

Revenues:
Premiums earned:
Agribusiness	$	12,870		$	11,510		$	36,462		$	33,677
Commercial business		4,680			5,502			14,589			16,974
Other		171			172			392			268

Total premiums earned		17,721			17,184			51,443			50,919

Investment income, net of investment expense		1,373			1,339			4,218			4,363
Realized investment gains, net		92			639			944			2,305
Other income		30			56			186			236



Total revenues	$	19,216		$	19,218		$	56,791		$	57,823


Components of net loss:
Underwriting (loss) gain:
Agribusiness	$	(1,342	)	$	1,183		$	(5,011	)	$	(3,409	)
Commercial business		(2,086	)		(3,217	)		(4,689	)		(5,753	)
Other		(123	)		(325	)		(84	)		(275	)

Total underwriting loss		(3,551	)		(2,359	)		(9,784	)		(9,437	)

Investment income, net of investment expense		1,373			1,339			4,218			4,363
Realized investment gains, net		92			639			944			2,305
Other income		30			56			186			236
Merger expenses		(822	)		—			(952	)		—
Corporate expense		(57	)		(119	)		(224	)		(430	)
Interest income (expense)		47			(6	)		31			(6	)
Other expense, net		(18	)		(38	)		(72	)		(108	)


Loss before income taxes		(2,906	)		(488	)		(5,653	)		(3,077	)
Income tax (benefit) expense		(89	)		2,676			(330	)		1,604


Net loss	$	(2,817	)	$	(3,164	)	$	(5,323	)	$	(4,681	)

The following table sets forth the net premiums earned by major lines of business for the Company's core insurance products in the three months and nine months ended September 30, 2011 and 2010:


	For the three months ended				For the nine months ended
	September 30,				September 30,
	2011		2010		2011		2010

Net premiums earned:

Agribusiness
Property	$	4,582	$	4,144	$	13,161	$	12,041
Commercial auto		3,069		2,953		9,003		8,620
Liability		2,537		2,282		7,124		6,929
Workers' compensation		2,492		1,945		6,620		5,547
Other		190		186		554		540


Agribusiness subtotal		12,870		11,510		36,462		33,677
Commercial lines
Property & liability		2,926		3,357		8,919		10,295
Workers' compensation		783		1,056		2,658		3,365
Commercial auto		925		1,032		2,862		3,146
Other		46		57		150		168

Commercial lines subtotal		4,680		5,502		14,589		16,974
Other		171		172		392		268


Total net premiums earned	$	17,721	$	17,184	$	51,443	$	50,919

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

PENN MILLERS HOLDING CORP 10-Q