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Claims Reserve (Notes)
 12 Months Ended
Dec. 31, 2022
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract]  
Reserve for Veterinary Invoices Reserve for Veterinary Invoices
The reserve for veterinary invoices is an estimate of the future amount the Company will pay for veterinary invoices that are dated as of, or prior to, its balance sheet date. The reserve also includes the Company's estimate of related internal processing costs. The reserve estimate involves actuarial projections, and is based on management's assessment of facts and circumstances currently known, and assumptions about anticipated patterns. The Company uses generally accepted actuarial methodologies, such as paid loss development methods, in estimating the amount of the reserve for veterinary invoices. The reserve is made for each of the Company's segments, subscription and other business, and is continually refined as the Company receives and pays veterinary invoices. Changes in management's assumptions and estimates may have a relatively large impact to the reserve and associated expense.
Reserve for veterinary invoices
Summarized below are the changes in the total liability for the Company's subscription business segment (in thousands):
 Year Ended December 31,
Subscription202220212020
Reserve at beginning of year$22,407 $19,925 $15,541 
Veterinary invoices during the period related to:
Current year439,679 357,859 278,776 
Prior years(2,799)(1,411)229 
Total veterinary invoice expense436,880 356,448 279,005 
Amounts paid during the period related to:
Current year414,778 333,182 259,971 
Prior years18,739 16,109 13,387 
Total paid433,517 349,291 273,358 
Non-cash expenses4,227 4,675 1,263 
Reserve at end of period$21,543 $22,407 $19,925 
The Company's reserve for the subscription business segment decreased $0.9 million from $22.4 million at December 31, 2021 to $21.5 million at December 31, 2022. This change was primarily comprised of $436.9 million in expense recorded during the period less $433.5 million in payments of veterinary invoices. This $436.9 million in veterinary invoice expense incurred included a reduction of $2.8 million to the reserves relating to prior years, which was the result of ongoing analysis of recent payment trends. The Company's adjustments to prior year reserves were a reduction of $1.4 million and an increase of $0.2 million as a result of analysis of payment trends in the years ended December 31, 2021 and 2020, respectively.
Summarized below are the changes in total liability for the Company's other business segment (in thousands):
 Year Ended December 31,
Other Business202220212020
Reserve at beginning of year$17,264 $9,004 $5,653 
Veterinary invoices during the period related to:
Current year211,729 129,826 72,286 
Prior years1,128 (212)(167)
Total veterinary invoice expense212,857 129,614 72,119 
Amounts paid during the period related to:
Current year190,031 112,574 63,359 
Prior years17,899 8,780 5,409 
Total paid207,930 121,354 68,768 
Non-cash expenses— — — 
Reserve at end of period$22,191 $17,264 $9,004 

The Company’s reserve for the other business segment increased $4.9 million from $17.3 million at December 31, 2021 to $22.2 million at December 31, 2022. This change was comprised of $212.9 million in expense recorded during the period less $207.9 million in payments of veterinary invoices. This $212.9 million in veterinary invoice expense incurred included an increase of $1.1 million to the reserves relating to prior years, which was the result of ongoing analysis of recent payment trends. The Company's adjustments to decrease prior year reserves were $0.2 million and $0.2 million as a result of analysis of payment trends in each of the years ended December 31, 2021 and 2020, respectively.
Veterinary invoice expenses

In the following tables, the cumulative number of veterinary invoices represents the total number received as of December 31, 2022, by year the veterinary invoice relates to, referred to as the year of occurrence. If a pet is injured or becomes ill, multiple trips to the veterinarian may result in several invoices. Each of these veterinary invoices is included in the cumulative number, regardless of whether the veterinary invoice was paid. Information for years 2019 through 2021 is provided as required supplementary information. Amounts in these tables are presented on a constant currency basis to remove the impact of changes in the foreign currency exchange rate on development. The cumulative expenses as of the end of each year are revalued using the currency exchange rate as of December 31, 2022.

The following table summarizes the development of veterinary invoice expense, on a constant currency basis, for the Company's subscription business segment by year of occurrence (in thousands, except for cumulative number of veterinary invoices data):
Cumulative veterinary invoice expensesReserveCumulative number of veterinary invoices
As of December 31,As of December 31,
Subscription201920202021202220222022
Year of Occurrence(unaudited)(unaudited)(unaudited)
2019$231,064 $231,451 $231,271 $231,004 $— 1,062,289 
2020$278,199 $277,297 $276,811 $— 1,196,283 
2021$352,736 $350,462 $869 1,461,528 
2022$436,406 $20,674 1,647,508 
$1,294,683 $21,543 
The following table summarizes the development of veterinary invoice expense, on a constant currency basis, for the Company's other business segment by year of occurrence (in thousands, except for cumulative number of veterinary invoices data):
Cumulative veterinary invoice expensesReserveCumulative number of veterinary invoices
As of December 31,As of December 31,
Other Business201920202021202220222022
Year of Occurrence(unaudited)(unaudited)(unaudited)
2019$38,879 $38,604 $38,676 $38,725 $— 283,095 
2020$72,284 $72,021 $72,251 $— 535,071 
2021$129,809 $130,645 $493 901,453 
2022$211,720 $21,698 1,210,566 
$453,341 $22,191 

Cumulative paid veterinary invoice expense

In the following tables, amounts are by the year the veterinary invoice relates to, referred to as the year of occurrence. Amounts in these tables are presented on a constant currency basis to remove the impact of changes in the foreign currency exchange rate. The cumulative amounts paid as of the end of each year are revalued using the currency exchange rate as of December 31, 2022. Information for years 2019 through 2021 is provided as required supplementary information.

The following table summarizes the amounts paid for veterinary invoices, inclusive of related internal processing costs and reported on a constant currency basis, for the subscription segment (in thousands):
Year Ended December 31,
Subscription2019202020212022
Year of Occurrence(unaudited)(unaudited)(unaudited)
2019$217,546 $229,779 $230,609 $231,004 
2020$260,786 $275,564 $276,811 
2021$332,895 $349,593 
2022$415,732 
$1,273,140 
Total amounts unpaid and recorded as a liability$21,543 


The following table summarizes the amounts paid for veterinary invoices, inclusive of related internal processing costs and reported on a constant currency basis, for the other business segment (in thousands):
Year Ended December 31,
Other Business2019202020212022
Year of Occurrence(unaudited)(unaudited)(unaudited)
2019$33,252 $38,572 $38,676 $38,725 
2020$63,357 $72,009 $72,251 
2021$112,557 $130,152 
2022$190,022 
$431,150 
Total amounts unpaid and recorded as a liability$22,191