Review of EsuranceGary Tolman, President and Chief Executive Officer of Esurance led off with the same opening slide as the other segments with a notable exception – the slide omitted net written premiums and used direct written premiums, and instead of combined ratio, it had policies in force.
I suppose this should be expected since the company is focused on growth, and its combined ratio is significantly over 100%. The company says this is because of arcane accounting rules, which require the company to amortize expenses over an arbitrary short time frame instead of the life of the policy. Since the company is a direct writer of business, it must amortize its
acquisition expenses over six months. It adjusts this by reporting both a GAAP combined ratio and what they call an economic combined ratio.
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