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    Prem Nainani

    Research Analyst at Plomado Advisors

    Prem Nainani is Co-Founder and Investment Analyst at Aplomado Advisors, specializing in fundamental research and portfolio management with a focus on U.S. small- and mid-cap equities. He covers a range of public companies such as Mercury General Corporation and is recognized for in-depth, company-specific due diligence, though public performance metrics and rankings are not widely disclosed. Beginning his career over five years ago, Prem co-founded Aplomado Advisors in December 2020 and has since played a key role in managing the firm's flagship Pajarito Fund. He is an SEC-registered investment adviser representative with no disclosures, holding all necessary professional credentials for the investment advisory industry.

    Prem Nainani's questions to MERCURY GENERAL (MCY) leadership

    Prem Nainani's questions to MERCURY GENERAL (MCY) leadership • Q4 2024

    Question

    Prem Nainani of Plomado Advisors asked if the reinsurance treaty defers to PCS for event classification, sought confirmation on the subrogation cash flow timing, and questioned why Mercury lacks a firm view on FAIR plan damages when peers seem to have one. He also probed whether the gross loss estimate could rise and the immediate capital impact of FAIR plan assessments.

    Answer

    CEO Gabriel Tirador confirmed the treaty defers to PCS for event classification and explained the gross loss range of $1.6B to $2.0B was provided to reflect various assumptions around losses and subrogation. He acknowledged the range could potentially be exceeded but felt it captured the likely outcomes. CFO Theodore Stalick added that FAIR plan losses are less significant due to the ability to cede them to their reinsurance treaty and recoup assessments via policyholder surcharges, mitigating the capital impact.

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