Note 14 - Revenue from Contracts With Customers

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Revenue from contracts with customers relates to the Extended Warranty and Kingsway Search Xcelerator segments and includes: vehicle service agreement fees, GAP commissions, maintenance support service fees, warranty product commissions, homebuilder warranty service fees, homebuilder warranty commissions and business services consulting revenue.  Revenue is based on terms of various agreements with credit unions, consumers, businesses and homebuilders. Customers either pay in full at the inception of a warranty contract, commission product sale, or when consulting services are billed, or on terms subject to the Company’s customary credit reviews.

The following table disaggregates revenues from contracts with customers by revenue type:

(in thousands)		Years ended December 31,
		2021		2020
Vehicle service agreement fees and GAP commissions	IWS, Geminus and PWI	$	57,756	$	33,137
Maintenance support service fees	Trinity		4,871		3,457
Warranty product commissions	Trinity		4,317		3,622
Homebuilder warranty service fees	PWSC		7,099		6,290
Homebuilder warranty commissions	PWSC		876		1,101
Business services consulting fees	Ravix		3,482		—
Service fee and commission revenue		$	78,401	$	47,607

Receivables from contracts with customers are reported as service fee receivable, net in the consolidated balance sheets and at December 31, 2021 and  December 31, 2020 were$6.7 million and $4.8 million, respectively. 

The Company records deferred service fees resulting from contracts with customers when payment is received in advance of satisfying the performance obligations. Deferred service fees were $89.2 million and $87.9 million at December 31, 2021 and December 31, 2020, respectively.  The increase in deferred service fees during the year ended December 31, 2021 is primarily due to additions to deferred service fees in excess of deferred service fees recognized during the year ended December 31, 2021, that was partially offset by the adjustment recorded in the third quarter of 2021 of $3.6 million to reduce PWI’s acquisition date deferred revenue to fair value.  

The Company expects to recognize within one year as service fee and commission revenue approximately 49.1% of the deferred service fees as of December 31, 2021. Approximately $44.2 million and $23.5 million of service fee and commission revenue recognized during the years ended December 31, 2021 and December 31, 2020 was included in deferred service fees as of December 31, 2020 and December 31, 2019, respectively.