QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Common Stock, $0.00001 par value per share |
x | Accelerated filer | o | ||||||||||||
Non-accelerated filer | o | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
PART I. | ||||||||
Item 1. | ||||||||
Condensed Consolidated Balance Sheets at March 31, 2022 (Unaudited) and December 31, 2021 | ||||||||
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for the Three Months Ended March 31, 2022 and 2021 | ||||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2022 and 2021 | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
As of | |||||||||||
March 31, | December 31, | ||||||||||
2022 | 2021 | ||||||||||
(Unaudited) | |||||||||||
Assets | |||||||||||
Investments | |||||||||||
Fixed maturities available-for-sale, at fair value (amortized cost: $ $ | $ | $ | |||||||||
Short-term investments (cost: $ | |||||||||||
Total investments | |||||||||||
Cash, cash equivalents and restricted cash | |||||||||||
Premium receivable, net of allowance for credit losses of $ | |||||||||||
Reinsurance recoverable | |||||||||||
Prepaid reinsurance premium | |||||||||||
Deferred acquisition costs | |||||||||||
Property and equipment, net | |||||||||||
Intangible assets | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders' Equity | |||||||||||
Unpaid loss and loss adjustment expense | $ | $ | |||||||||
Unearned premium | |||||||||||
Trade payables | |||||||||||
Funds held for reinsurance treaties | |||||||||||
Deferred ceding commission | |||||||||||
Ceded premium payable | |||||||||||
Other liabilities and accrued expenses | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 15) | |||||||||||
Stockholders' equity | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Revenue | ||||||||||||||
Net earned premium | $ | $ | ||||||||||||
Ceding commission income | ||||||||||||||
Net investment income | ||||||||||||||
Commission and other income | ||||||||||||||
Total revenue | ||||||||||||||
Expense | ||||||||||||||
Loss and loss adjustment expense, net | ||||||||||||||
Other insurance expense | ||||||||||||||
Sales and marketing | ||||||||||||||
Technology development | ||||||||||||||
General and administrative | ||||||||||||||
Total expense | ||||||||||||||
Loss before income taxes | ( | ( | ||||||||||||
Income tax expense | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Other comprehensive loss, net of tax | ||||||||||||||
Unrealized (loss) gain on investments in fixed maturities | ( | |||||||||||||
Foreign currency translation adjustment | ( | |||||||||||||
Comprehensive loss | $ | ( | $ | ( | ||||||||||
Per share data: | ||||||||||||||
Net loss per share attributable to common stockholders —basic and diluted | $ | ( | $ | ( | ||||||||||
Weighted average common shares outstanding—basic and diluted | ||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive (Loss) Income | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||
Exercise of stock options and distribution of restricted stock units | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Issuance of common stock upon closing of Follow-on Offering, net of underwriting discounts and commissions and offering costs of $ | — | — | — | |||||||||||||||||||||||||||||||||||
Exercise of stock options | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
Depreciation | ||||||||||||||
Stock-based compensation | ||||||||||||||
Amortization of discount on bonds | ||||||||||||||
Provision for bad debt | ||||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Premium receivable | ( | ( | ||||||||||||
Reinsurance recoverable | ( | ( | ||||||||||||
Prepaid reinsurance premium | ( | ( | ||||||||||||
Deferred acquisition costs | ( | ( | ||||||||||||
Other assets | ( | ( | ||||||||||||
Unpaid loss and loss adjustment expense | ||||||||||||||
Unearned premium | ||||||||||||||
Trade payables | ( | |||||||||||||
Funds held for reinsurance treaties | ||||||||||||||
Deferred ceding commissions | ||||||||||||||
Ceded premium payable | ||||||||||||||
Other liabilities and accrued expenses | ||||||||||||||
Net cash used in operating activities | ( | ( | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Proceeds from short-term investments sold or matured | ||||||||||||||
Proceeds from bonds sold or matured | ||||||||||||||
Cost of short-term investments acquired | ( | |||||||||||||
Cost of bonds acquired | ( | |||||||||||||
Purchases of property and equipment | ( | ( | ||||||||||||
Net cash provided by (used in) investing activities | ( | |||||||||||||
Cash flows from financing activities: | ||||||||||||||
Proceeds from Follow-on Offering, net of underwriting discounts and commissions and offering costs | ||||||||||||||
Proceeds from stock exercises | ||||||||||||||
Net cash provided by financing activities | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ( | ||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash at beginning of period | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||||||||
Supplemental disclosure of cash flow information: | ||||||||||||||
Cash paid for income taxes | $ | $ |
March 31, | December 31, | |||||||||||||
2022 | 2021 | |||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
Cost or Amortized Cost | Gross Unrealized | Fair Value | ||||||||||||||||||||||||
Gains | Losses | |||||||||||||||||||||||||
March 31, 2022 | ||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
U.S. Government obligations | ( | |||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | |||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
U.S. Government obligations | ( | |||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
March 31, 2022 | ||||||||||||||
Cost or Amortized Cost | Fair Value | |||||||||||||
Due in one year or less | $ | $ | ||||||||||||
Due after one year through five years | ||||||||||||||
Due after five years through ten years | ||||||||||||||
Due after ten years | ||||||||||||||
Total | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Interest on cash and cash equivalents | $ | $ | ||||||||||||
Fixed maturities | ||||||||||||||
Short-term investments | ||||||||||||||
Total | ||||||||||||||
Investment expense | ||||||||||||||
Net investment income | $ | $ |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||||||
March 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Corporate debt securities | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
U.S. Government obligations | ( | ( | ||||||||||||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | $ | ( |
Less than 12 Months | 12 Months or More | Total | ||||||||||||||||||||||||||||||||||||
Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | |||||||||||||||||||||||||||||||||
December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Corporate debt securities | $ | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
U.S. Government obligations | ( | ( | ||||||||||||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | $ | ( |
March 31, 2022 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. Government obligations | ||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Fixed maturities | $ | $ | ||||||||||||||||||||||||
Short term investments | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
December 31, 2021 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Corporate debt securities | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. Government obligations | ||||||||||||||||||||||||||
Municipal securities | ||||||||||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||||
Short term investments | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Unpaid loss and LAE at beginning of period | $ | $ | ||||||||||||
Less: Reinsurance recoverable at beginning of period (1) | ||||||||||||||
Net unpaid loss and LAE at beginning of period | ||||||||||||||
Add: Incurred loss and LAE, net of reinsurance, related to: | ||||||||||||||
Current year | ||||||||||||||
Prior years | ( | ( | ||||||||||||
Total incurred | ||||||||||||||
Deduct: Paid loss and LAE, net of reinsurance, related to: | ||||||||||||||
Current year | ||||||||||||||
Prior years | ||||||||||||||
Total paid | ||||||||||||||
Unpaid loss and LAE, net of reinsurance recoverable, at end of period | ||||||||||||||
Reinsurance recoverable at end of period (1) | ||||||||||||||
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period | $ | $ |
March 31, | December 31, | |||||||||||||
2022 | 2021 | |||||||||||||
Lease liabilities | $ | $ | ||||||||||||
Accrued advertising costs | ||||||||||||||
Employee compensation | ||||||||||||||
Income taxes payable | ||||||||||||||
Payable for securities | ||||||||||||||
Accrued professional fees | ||||||||||||||
Advance premium | ||||||||||||||
Premium taxes payable | ||||||||||||||
Other payables | ||||||||||||||
Total other liabilities and accrued expenses | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Weighted average expected term (years) | ||||||||||||||
Risk-free interest rate | ||||||||||||||
Volatility | ||||||||||||||
Expected dividend yield |
Number of Options | Weighted- Average Exercise Price | Weighted-Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||||||||||||
Outstanding as of December 31, 2021 | $ | $ | ||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||
Exercised | ( | |||||||||||||||||||||||||
Cancelled | ( | |||||||||||||||||||||||||
Outstanding as of March 31, 2022 | $ | $ | ||||||||||||||||||||||||
Options exercisable as of March 31, 2022 | $ | $ | ||||||||||||||||||||||||
Options unvested as of March 31, 2022 | $ | $ |
Number of shares | Grant Date Fair Value | |||||||||||||
Outstanding as of December 31, 2021 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Cancelled | ( | |||||||||||||
Outstanding as of March 31, 2022 | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Loss and loss adjustment expense, net | $ | $ | ||||||||||||
Other insurance expense | ||||||||||||||
Sales and marketing | ||||||||||||||
Technology development | ||||||||||||||
General and administrative | ||||||||||||||
Total stock-based compensation expense | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Stock options | $ | $ | ||||||||||||
RSUs | ||||||||||||||
Total stock-based compensation expense | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Numerator: | ||||||||||||||
Net loss attributable to common stockholders ($ in millions) | $ | ( | $ | ( | ||||||||||
Denominator: | ||||||||||||||
Weighted average common shares outstanding — basic and diluted | ||||||||||||||
Net loss per share attributable to common stockholders — basic and diluted | $ | ( | $ | ( | ||||||||||
Three Months Ended March 31, | ||||||||||||||
2022 | 2021 | |||||||||||||
Options to purchase common stock | ||||||||||||||
Unvested restricted stock | ||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||
2022 | 2021 | |||||||||||||||||||||||||
Jurisdiction | Amount | % of GWP | Amount | % of GWP | ||||||||||||||||||||||
California | $ | % | $ | % | ||||||||||||||||||||||
Texas | % | % | ||||||||||||||||||||||||
New York | % | % | ||||||||||||||||||||||||
New Jersey | % | % | ||||||||||||||||||||||||
Illinois | % | % | ||||||||||||||||||||||||
Georgia | % | % | ||||||||||||||||||||||||
Colorado | % | % | ||||||||||||||||||||||||
Pennsylvania | % | % | ||||||||||||||||||||||||
Virginia | % | % | ||||||||||||||||||||||||
Maryland | % | % | ||||||||||||||||||||||||
All other | % | % | ||||||||||||||||||||||||
$ | % | $ | % | |||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
($ in millions, except Premium per customer) | |||||||||||
Customers (end of period) | 1,504,197 | 1,096,618 | |||||||||
In force premium (end of period) | $ | 419.0 | $ | 251.7 | |||||||
Premium per customer (end of period) | $ | 279 | $ | 229 | |||||||
Annual dollar retention (end of period) | 82 | % | 81 | % | |||||||
Total revenue | $ | 44.3 | $ | 23.5 | |||||||
Gross earned premium | $ | 96.0 | $ | 56.2 | |||||||
Gross profit | $ | 10.2 | $ | 1.9 | |||||||
Adjusted gross profit | $ | 16.3 | $ | 5.0 | |||||||
Net loss | $ | (74.8) | $ | (49.0) | |||||||
Adjusted EBITDA | $ | (57.4) | $ | (41.3) | |||||||
Gross profit margin | 23 | % | 8 | % | |||||||
Adjusted gross profit margin | 37 | % | 21 | % | |||||||
Ratio of Adjusted Gross Profit to Gross Earned Premium | 17 | % | 9 | % | |||||||
Gross loss ratio | 90 | % | 121 | % | |||||||
Net loss ratio | 89 | % | 120 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | Change | % Change | ||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Net earned premium | $ | 27.4 | $ | 13.8 | $ | 13.6 | 99 | % | |||||||||||||||
Ceding commission income | 14.0 | 9.0 | 5.0 | 56 | % | ||||||||||||||||||
Net investment income | 0.9 | 0.2 | 0.7 | 350 | % | ||||||||||||||||||
Commission and other income | 2.0 | 0.5 | 1.5 | 300 | % | ||||||||||||||||||
Total revenue | 44.3 | 23.5 | 20.8 | 89 | % | ||||||||||||||||||
Expense | |||||||||||||||||||||||
Loss and loss adjustment expense, net | 24.4 | 16.5 | 7.9 | 48 | % | ||||||||||||||||||
Other insurance expense | 9.1 | 4.8 | 4.3 | 90 | % | ||||||||||||||||||
Sales and marketing | 38.3 | 29.1 | 9.2 | 32 | % | ||||||||||||||||||
Technology development | 16.9 | 7.1 | 9.8 | 138 | % | ||||||||||||||||||
General and administrative | 28.2 | 14.1 | 14.1 | 100 | % | ||||||||||||||||||
Total expense | 116.9 | 71.6 | 45.3 | 63 | % | ||||||||||||||||||
Loss before income taxes | (72.6) | (48.1) | (24.5) | 51 | % | ||||||||||||||||||
Income tax expense | 2.2 | 0.9 | 1.3 | 144 | % | ||||||||||||||||||
Net loss | $ | (74.8) | $ | (49.0) | $ | (25.8) | 53 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | Change | % Change | ||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||
Gross written premium | $ | 110.6 | $ | 75.8 | $ | 34.8 | 46 | % | |||||||||||||||
Ceded written premium | (75.6) | (55.6) | (20.0) | 36 | % | ||||||||||||||||||
Net written premium | $ | 35.0 | $ | 20.2 | $ | 14.8 | 73 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2022 | 2021 | Change | % Change | ||||||||||||||||||||
($ in millions) | |||||||||||||||||||||||
Gross earned premium | $ | 96.0 | $ | 56.2 | $ | 39.8 | 71 | % | |||||||||||||||
Ceded earned premium | (68.6) | (42.4) | (26.2) | 62 | % | ||||||||||||||||||
Net earned premium | $ | 27.4 | $ | 13.8 | $ | 13.6 | 99 | % |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
($ in millions) | |||||||||||
Total revenue | $ | 44.3 | $ | 23.5 | |||||||
Adjustments: | |||||||||||
Loss and loss adjustment expense, net | $ | (24.4) | $ | (16.5) | |||||||
Other insurance expense | (9.1) | (4.8) | |||||||||
Depreciation and amortization | (0.6) | (0.3) | |||||||||
Gross profit | $ | 10.2 | $ | 1.9 | |||||||
Gross profit margin (% of total revenue) | 23 | % | 8 | % | |||||||
Adjustments: | |||||||||||
Net investment income | $ | (0.9) | $ | (0.2) | |||||||
Employee-related expense | 3.9 | 1.7 | |||||||||
Professional fees and other | 2.5 | 1.3 | |||||||||
Depreciation and amortization | 0.6 | 0.3 | |||||||||
Adjusted gross profit | $ | 16.3 | $ | 5.0 | |||||||
Adjusted gross profit margin (% of total revenue) | 37 | % | 21 | % |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
($ in millions) | |||||||||||
Numerator: Adjusted gross profit | $ | 16.3 | $ | 5.0 | |||||||
Denominator: Gross earned premium | $ | 96.0 | $ | 56.2 | |||||||
Ratio of Adjusted Gross Profit to Gross Earned Premium | 17 | % | 9 | % |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
($ in millions) | |||||||||||
Net loss | $ | (74.8) | $ | (49.0) | |||||||
Adjustments: | |||||||||||
Income tax expense | $ | 2.2 | $ | 0.9 | |||||||
Depreciation and amortization | 1.5 | 0.9 | |||||||||
Stock-based compensation | 14.1 | 6.1 | |||||||||
Transaction costs | 0.5 | — | |||||||||
Net investment income | (0.9) | (0.2) | |||||||||
Adjusted EBITDA | $ | (57.4) | $ | (41.3) |
Three Months Ended March 31, | |||||||||||
2022 | 2021 | ||||||||||
($ in millions) | |||||||||||
Net cash used in operating activities | $ | (39.5) | $ | (40.3) | |||||||
Net cash provided by (used in) by investing activities | $ | 4.1 | $ | (2.0) | |||||||
Net cash provided by financing activities | $ | 0.6 | $ | 646.4 |
Exhibit Number | Description | Incorporated by Reference | |||||||||||||||||||||
Form | File No. | Exhibit | Filing Date | ||||||||||||||||||||
S-4 | 333-261629 | 2.3 | 12/14/2021 | ||||||||||||||||||||
8-K | 001-39367 | 3.1 | 7/10/2020 | ||||||||||||||||||||
8-K | 001-39367 | 3.2 | 7/10/2020 | ||||||||||||||||||||
S-1/A | 333-239007 | 4.1 | 6/23/2020 | ||||||||||||||||||||
101.INS* | Inline XBRL Instance Document | ||||||||||||||||||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | ||||||||||||||||||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||||||||||||||||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||||||||||||||||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||||||||||||||||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||||||||||||||||||||
104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Lemonade, Inc. | |||||||||||
Date: | May 10, 2022 | By: | /s/ Daniel Schreiber | ||||||||
Daniel Schreiber | |||||||||||
Co-Chief Executive Officer | |||||||||||
Date: | May 10, 2022 | By: | /s/ Shai Wininger | ||||||||
Shai Wininger | |||||||||||
Co-Chief Executive Officer | |||||||||||
Date: | May 10, 2022 | By: | /s/ Tim Bixby | ||||||||
Tim Bixby | |||||||||||
Chief Financial Officer |
Date: May 10, 2022 | By: | /s/ Daniel Schreiber | ||||||
Daniel Schreiber | ||||||||
Co-Chief Executive Officer (co-principal executive officer) | ||||||||
Date: May 10, 2022 | By: | /s/ Shai Wininger | ||||||
Shai Wininger | ||||||||
Co-Chief Executive Officer (co-principal executive officer) | ||||||||
Date: May 10, 2022 | By: | /s/ Tim Bixby | ||||||
Tim Bixby | ||||||||
Chief Financial Officer (principal financial officer) |
Date: May 10, 2022 | By: | /s/ Daniel Schreiber | ||||||
Daniel Schreiber | ||||||||
Co-Chief Executive Officer (co-principal executive officer) |
Date: May 10, 2022 | By: | /s/ Shai Wininger | ||||||
Shai Wininger | ||||||||
Co-Chief Executive Officer (co-principal executive officer) |
Date: May 10, 2022 | By: | /s/ Tim Bixby | ||||||
Tim Bixby | ||||||||
Chief Financial Officer (principal financial officer) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
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Statement of Financial Position [Abstract] | ||
Fixed maturities available-for-sale, amortized cost | $ 714.5 | $ 696.8 |
Short -term investments, cost | 83.3 | 110.4 |
Premium receivable, allowance for doubtful accounts | $ 1.9 | $ 1.6 |
Common stock, par value (usd per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, issued (in shares) | 61,758,739 | 61,660,996 |
Common stock, outstanding (in shares) | 61,758,739 | 61,660,996 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) $ in Millions |
3 Months Ended |
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Mar. 31, 2021
USD ($)
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Statement of Stockholders' Equity [Abstract] | |
Issuance costs and underwriting fees | $ 28.2 |
Nature of the Business |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | Nature of the BusinessLemonade, Inc. is a public benefit corporation organized under Delaware law on June 17, 2015. It provides certain personnel, facilities and services to each of its subsidiaries (together with Lemonade, Inc., the “Company”), all of which are 100% owned, directly or indirectly, by Lemonade, Inc. For the list of the Company's US and EU subsidiaries, see Note 1 - Nature of the Business, of the audited consolidated financial statements and related notes thereto for the year ended December 31, 2021 as included in the Company's Annual Report on Form 10-K for the year ending December 31, 2021 (the "Annual Report on Form 10-K") for more complete descriptions and discussions. |
Basis of Presentation |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated upon consolidation. All foreign currency amounts in the condensed consolidated statement of operations and comprehensive loss have been translated using an average rate for the reporting period. All foreign currency balances in the balance sheet have been translated using the spot rate at the end of the reporting period. All figures expressed, except share amounts, are in U.S. dollars in millions. Risk and Uncertainties The COVID-19 pandemic has caused national and global economic and financial market disruptions and may adversely impact our business. Although the Company did not see a material impact on its results of operations for the three months ended March 31, 2022 and year ended December 31, 2021 due to the COVID-19 pandemic, the Company cannot predict the duration or magnitude of the pandemic or the full impact that it may have on the Company’s financial condition and results of operations, business operations, and workforce. Unaudited interim financial information In the opinion of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of its financial position and its results of operations, changes in stockholders’ equity and cash flows. The condensed consolidated balance sheet at December 31, 2021, was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements. The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited consolidated financial statements and the related notes thereto for the fiscal year ended December 31, 2021 contained in the Company’s Annual Report on Form 10-K
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Use of Estimates |
3 Months Ended |
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Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | Use of EstimatesThe preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates estimates, including those related to contingent assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expense during the reporting period. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, reinsurance recoverables on unpaid losses and valuation allowance on deferred tax assets. |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Cash, cash equivalents and restricted cash The following represents the Company’s cash, cash equivalents and restricted cash as of March 31, 2022 and December 31, 2021:
Cash and cash equivalents consist primarily of bank deposits and money market accounts with maturities of three months or less at the date of acquisition and are stated at cost, which approximates fair value. The Company’s restricted cash relates to security deposits for an office lease in the Netherlands. The carrying value of restricted cash approximates fair value. Deferred offering costs The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction to the carrying value of stockholders' equity (deficit) as a reduction of additional paid-in capital generated as a result of such offering. On January 14, 2021, the Company completed a Follow-on Offering of common stock, as defined and discussed in detail in Note 10, which generated net proceeds of $525.7 million, after deducting underwriting discounts and offering costs. On February 1, 2021, the underwriters exercised their option to purchase additional shares, and generated additional net proceeds to us of $114.6 million. Deferred offering costs from the Follow-on Offering amounted to $0.4 million. Recently adopted accounting pronouncements Leases In February 2016, the FASB issued Leases (Topic 842) ("ASU 2016-02"), as subsequently amended, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors), and replaces the existing guidance in ASC 840, Leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine the recognition pattern of lease expense over the term of the lease. In addition, a lessee is required to record (i) a right-of-use asset and a lease liability the balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or financing lease, and (ii) lease expense for operating leases and amortization and interest expense for financing leases, in statement of operations. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases under ASC 840. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842), which added an optional transition method that allows companies to adopt the standard as of the beginning of the year of adoption as opposed to the earliest comparative period presented. The Company adopted the new standard effective January 1, 2021, using the modified retrospective transition approach which uses the effective date as the date of initial application with no adjustment to prior periods presented. There was no adjustment to the opening balance of retained earnings. At adoption date, the new standard resulted in the recognition of an operating lease Right-of-Use (ROU) asset of $16.9 million included under Other Assets and a corresponding operating lease liabilities of $17.2 million included in Other Liabilities on the consolidated balance sheet. The difference of $0.3 million between the operating lease ROU assets and operating lease liabilities represents reclassification of deferred rent liability (the difference between the straight-line rent expenses and paid rent amounts under the leases) to operating lease ROU assets from other liabilities at the adoption date. The adoption of the standard did not have a material impact on the Company’s consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows. The adoption impact relates to the Company’s existing operating leases for office spaces in the US, Netherlands and Israel. The Company has elected to apply the package of practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the lease classification of any expired or existing leases, or the capitalization of initial direct costs for any existing leases. Additionally, the Company elected the practical expedients that permit the exclusions of leases considered to be short-term. Current Expected Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. ASU 2016-13 introduced a current expected credit loss (CECL) model for measuring expected credit losses for certain types of financial instruments held at the reporting date requiring significant judgment in application based on historical experience, current conditions and reasonable supportable forecasts, but is not prescriptive about certain aspects of estimating expected losses. The guidance replaced the current incurred loss model for measuring expected credit losses and provided for additional disclosure requirements. Subsequently, the FASB issued additional ASUs on Topic 326 that did not change the core principle of the guidance in ASU 2016-13, but provided clarification and implementation guidance on certain aspects of ASU 2016-13, and have the same effective date and transition requirements as ASU 2016-13. The Company adopted the guidance using a modified retrospective approach as of January 1, 2021 which resulted in no cumulative-effect adjustment to retained earnings. The updated guidance in ASU 2016-13 also amended the previous other-than-temporary impairment (“OTTI”) model for available-for-sale fixed income securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. The Company adopted the guidance related to available-for-sale fixed income securities on January 1, 2021 using a prospective transition approach for available-for-sale fixed income securities that were purchased with credit deterioration or had recognized an OTTI write-down prior to the effective date. The effect of the prospective transition approach was to maintain the same amortized cost basis before and after the effective date.
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Acquisition of a Business |
3 Months Ended |
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Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition of a Business | Acquisition of a Business On November 8, 2021, Lemonade entered into a definitive agreement (“Agreement”) to acquire Metromile, Inc. (“Metromile’). Pursuant to the terms of the Agreement, the Company will acquire 100% of the equity of Metromile, through an all stock transaction that implies a fully diluted equity value of $500.0 million, or over $200.0 million net of cash (based upon the conversion ratio of 19 shares of Metromile for 1 share of Lemonade). The transaction is expected to close in the second quarter of 2022 subject to customary closing conditions and approvals. Metromile is a leading digital insurance platform in the United States. With data science at its foundation, Metromile offers real-time, personalized auto insurance policies by the mile instead of the industry’s reliance on approximations that have historically made prices unfair. Metromile’s digitally native offering is built around the modern driver’s needs, featuring automated claims and complementary smart driving features. In addition, through Metromile Enterprise, Metromile licenses its technology platform to insurance companies around the world. Metromile’s cloud-based software as a service enables carriers to operate with greater efficiency, automate claims to expedite resolution, reduce losses associated with fraud, and unlock the productivity of employees.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Unrealized gains and losses The following tables present cost or amortized cost and fair values of investment in fixed maturities as of March 31, 2022 and December 31, 2021 ($ in millions):
Gross unrealized losses for fixed maturities was $19.8 million as of March 31, 2022 and $5.5 million as of December 31, 2021. Gross unrealized gains and losses were recorded as a component of accumulated other comprehensive loss. Contractual maturities of bonds The following table presents the cost or amortized cost and estimated fair value of investments in fixed maturities as of March 31, 2022 by contractual maturity ($ in millions). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
Net investment income An analysis of net investment income follows ($ in millions):
Investment gains and losses The Company had pre-tax net realized capital losses of less than $0.1 million for the three months ended March 31, 2022. There were no pre-tax net realized capital gains or losses for the three months ended March 31, 2021. Aging of gross unrealized losses The following table presents the gross unrealized losses and related fair values for the Company’s investment in fixed maturities, grouped by duration of time in a continuous unrealized loss position as of March 31, 2022 and December 31, 2021 ($ in millions):
Gross unrealized losses for fixed maturities for twelve months or more was less than $0.1 million for both March 31, 2022 and December 31, 2021. As of March 31, 2022, 279 of the securities held were in an unrealized loss position. The Company determined that unrealized losses on fixed maturities were primarily due to the interest rate environment, and not credit risk related to the issuers of these securities. The Company does not intend to sell these investment in fixed maturities, and it is not more likely than not that that the Company will be required to sell these investment in fixed maturities before recovery of the amortized cost basis. No allowance for credit losses related to any of these securities was recorded for the three months ended March 31, 2022. The Company does not measure an allowance for credit losses on accrued interest receivable and would instead write off accrued interest receivable at the time an issuer defaults or is expected to default on payments.
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Fair Value Measurements |
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Fair Value Measurements | Fair Value Measurements The following tables present the Company’s fair value hierarchy for financial assets and liabilities measured as of March 31, 2022 and December 31, 2021 ($ in millions):
The fair value of all our different classes of Level 2 fixed maturities and short-term investments are estimated by using quoted prices from a third-party valuation service provider to gather, analyze and interpret market information and derive fair values based upon relevant methodologies and assumptions for individual instruments. There were no transfers between Level 1, Level 2, or Level 3 during March 31, 2022 and December 31, 2021, respectively.
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Unpaid Loss and Loss Adjustment Expense |
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Insurance [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unpaid Loss and Loss Adjustment Expense | Unpaid Loss and Loss Adjustment Expense The following table presents the activity in the liability for unpaid loss and loss adjustment expense ("LAE") for the three months ended March 31, 2022 and 2021 ($ in millions):
(1) Reinsurance recoverable in this table includes only ceded unpaid loss and LAE Unpaid loss and LAE includes anticipated salvage and subrogation recoverable. Considerable variability is inherent in the estimate of the reserve for losses and LAE. Although management believes the liability recorded for losses and LAE is adequate, the variability inherent in this estimate could result in changes to the ultimate liability, which may be material to stockholders' equity. Additional variability exists due to accident year allocations of ceded amounts in accordance with reinsurance agreements, which is not expected to result in any changes to the ultimate liability. Other factors that can impact loss reserve development may also include trends in general economic conditions, including the effects of inflation. The Company had favorable development on net loss and LAE reserves of $0.4 million for the three months ended March 31, 2022, and favorable development on net loss and LAE reserves of $0.2 million for the three months ended March 31, 2021. No additional premiums or returned premiums have been accrued as a result of prior year effects. For the three months ended March 31, 2021, current accident year incurred loss and LAE included $6.5 million of net incurred loss and LAE from the severe winter storm that affected our customers in the states of Texas and Oklahoma. The net incurred loss and LAE from Winter Storm Uri as of March 31, 2021 represents the Company's best estimates based upon information currently available. Through June 30, 2021, the Company had proportional reinsurance contracts which cover all of the Company's products and geographies, and transferred, or “ceded,” 75% of the premium to reinsurers ("Proportional Reinsurance Contracts"). In exchange, these reinsurers paid a ceding commission of 25% for every dollar ceded, in addition to funding all of the corresponding claims, or 75% of all claims. The Company opted to manage the remaining 25% of the business with alternative forms of reinsurance through non-proportional reinsurance contracts ("Non-Proportional Reinsurance Contracts"). A portion of the Company’s proportional reinsurance program expired on June 30, 2021. The Company renewed the majority of the expiring reinsurance contracts at terms that are very similar to the prior agreements. As the business continues to grow and diversify, and with stability in our insurance results, the Company decreased the overall share of proportional reinsurance from 75% of premium to 70%. In addition, the Company purchased a new reinsurance program to protect against catastrophe risk in the U.S that exceed $60 million in losses. Other non-proportional reinsurance contracts were renewed with terms similar to the expired contracts.
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Other Liabilities and Accrued Expenses |
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Other Liabilities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities and Accrued Expenses | Other Liabilities and Accrued Expenses Other liabilities and accrued expenses as of March 31, 2022 and December 31, 2021 consist of the following ($ in millions):
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Stockholders' Equity |
3 Months Ended |
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Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common stock Upon closing of the initial public offering ("IPO") in 2020, the Company filed an amended and restated certificate of incorporation on July 7, 2020 with the Secretary of State of the State of Delaware to authorize the issuance of up to 200,000,000 shares of common stock, par value $0.00001 per share, and 10,000,000 shares of undesignated preferred stock, par value $0.00001 per share. On January 14, 2021, the Company completed a Follow-on Offering of common stock (the "Follow-on Offering"), which resulted in the issuance and sale of 3,300,000 shares of common stock of the Company, and 1,524,314 shares of common stock by certain selling shareholders, and generated net proceeds to us of $525.7 million after deducting underwriting discounts and commissions and other offering costs. On February 1, 2021, the underwriters exercised their option to purchase additional shares, which resulted in the issuance and sale of an additional 718,647 shares of common stock of the Company, and generated additional net proceeds of $114.6 million to us after deducting underwriting discounts. As of March 31, 2022 and December 31, 2021, the Company was authorized to issue 200,000,000 shares of par value $0.00001 per share common stock. The voting, dividend and liquidation rights of the holders of the Company’s common stock is subject to and qualified by the rights, powers and preferences of the holders of the preferred stock. The Company in 2020 made a contribution of 500,000 newly issued shares of common stock to a related party, the Lemonade Foundation (see Note 14). In connection with the Follow-on Offering noted above, Lemonade Foundation sold 100,000 of the contributed shares of the Company. Undesignated Preferred Stock As of both March 31, 2022 and December 31, 2021, the Company's certificate of incorporation, as amended and restated, authorized the Company to issue up to 10,000,000 shares of undesignated preferred stock, par value $0.00001 per share. As of both March 31, 2022 and December 31, 2021, there were no shares of undesignated preferred stock issued or outstanding.
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Stock-based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation | Stock-based Compensation Share option plans 2020 Incentive Compensation Plan On July 2, 2020, the Company’s board of directors adopted and the Company’s stockholders approved the 2020 Incentive Compensation Plan (the “2020 Plan”), which became effective immediately prior to the effectiveness of the registration statement for the Company’s IPO on July 2, 2020. The 2020 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards. The number of shares initially reserved for issuance under the 2020 Plan is 5,503,678 shares, inclusive of available shares previously reserved for issuance under the 2015 Incentive Share Option Plan, as amended and restated on September 4, 2019 (the “2015 Plan”). In addition, the number of shares reserved for issuance under the 2020 Plan is subject to increase for awards previously issued under the 2015 Plan which are forfeited or lapse unexercised. Annually, on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, the reserve will be increased by an amount equal to the lesser of (A) 5% of the shares outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined by the Company’s board of directors, provided that no more than 3,650,000 shares may be issued upon the exercise of incentive stock options. On January 1, 2022, the 2020 Plan share pool was increased by 3,083,050 shares, equal to 5% of the aggregate number of outstanding common stock as of December 31, 2021. As of March 31, 2022, there were 8,044,269 shares of common stock available for future grants. 2020 Employee Stock Purchase Plan On July 2, 2020, the Company's board of directors adopted and the Company's stockholders approved the 2020 Employee Stock Purchase Plan (the "2020 ESPP"), which became effective immediately prior to the effectiveness of the registration statement for the Company's IPO on July 2, 2020. The total shares of common stock initially reserved for issuance under the 2020 ESPP is limited to 1,000,000 shares. In addition, the number of shares available for issuance under the 2020 ESPP will be annually increased on January 1 of each calendar year beginning in 2021 and ending in and including 2030, by an amount equal to the lesser of (A) 1,000,000 shares, (B) 1% of the shares outstanding on the final day of the immediately preceding calendar year and (C) such smaller number of shares as is determined by the board of directors. The board of directors or a committee of the board of directors will administer and will have authority to interpret the terms of the 2020 ESPP and determine eligibility of participants. On January 1, 2022, there was no increase in the 2020 ESPP share pool. As of March 31, 2022, there were no shares of common stock issued under the 2020 ESPP. 2015 Incentive Share Option Plan In July 2015, the Company adopted the 2015 Incentive Share Option Plan ("2015 Plan"). The 2015 Plan has been amended and restated from time to time to increase the number of shares reserved for grant and to enable the grant of options to employees of the Company’s subsidiaries. Under the 2015 Plan, options to purchase common stock of the Company may be granted to employees, officers, directors and consultants of the Company. Each option granted can be exercised for one share of common stock of the Company. Options granted to employees generally vest over a period of no more than four years. The options expire ten years from the date of grant. Pursuant to the 2015 Plan, the Company had reserved 7,312,590 shares of common stock for issuance. Effective immediately upon the approval of the 2020 plan, the remaining shares of common stock available for future grant under the 2015 Plan were transferred to the 2020 Plan. As of March 31, 2022, there were no shares of common stock available for future grant under the 2015 Plan. Subsequent to the approval of the 2020 Plan, no additional grants will be made under the 2015 Plan and any outstanding awards under the 2015 Plan will continue with their original terms. Options granted to employees and non-employees The fair value of each option granted for the three months ended March 31, 2022 and 2021 is estimated on the date of grant using the Black-Scholes model based on the following assumptions:
Expected volatility is calculated based on implied volatility from market comparisons of certain publicly traded companies and other factors. The expected term of options granted is based on the simplified method, which uses the midpoint between the vesting date and the contractual term in accordance with ASC 718, “Compensation — Stock Compensation”. The risk-free interest rate is based on observed interest rates appropriate for the term of the Company’s stock options. The dividend yield assumption is based on the Company’s historical and expected future dividend payouts and may be subject to substantial change in the future. The following tables summarize activity of stock options and restricted stock units ("RSUs") ($ in millions, except for number of options and weighted average amounts): Stock options
Restricted Stock Units
Stock-based compensation expense Stock-based compensation expense from stock options and RSUs granted as included and classified in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 is as follows ($ in millions):
Stock-based compensation expense classified by award type as included in the condensed consolidated statements of operations is as follows ($ in millions):
The total unrecognized expense granted to employees and non-employees outstanding at March 31, 2022 was $83.2 million for the stock options and $22.2 million for the RSUs, with a remaining weighted-average vesting period of 1.3 years for the stock options and 1.7 years for the RSUs.
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Income Taxes |
3 Months Ended |
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Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Effective tax rates The consolidated effective tax rate for the three months ended March 31, 2022 and 2021 was (3.0)% and (1.9)%, respectively. The change in effective tax rate over the two periods was predominantly reflective of the change in profit before tax of its wholly-owned subsidiaries in Israel and the Netherlands. The Company believes that as of March 31, 2022, it had no material uncertain tax positions. Interest and penalties related to unrecognized tax expenses (benefits) are recognized in income tax expense, when applicable. There were no material liabilities for interest and penalties accrued as of March 31, 2022. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law in the U.S. to provide certain relief as a result of the COVID-19 pandemic. In addition, governments around the world have enacted or implemented various forms of tax relief in measures in response to the economic conditions due to the COVID-19 pandemic. As of March 31, 2022, the Company has determined that neither the CARES Act nor changes to income tax laws or regulations in other jurisdictions had a significant impact on the Company's effective tax rate.
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Net Loss Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss Per Share | Net Loss per Share Net loss per share Basic and diluted net loss per share attributable to common stockholders was calculated as follows:
The Company’s potentially dilutive securities, which include stock options and unvested RSUs, have been excluded from the computation of diluted net loss per share as the effect would be anti-dilutive. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect.
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Related Party Transactions |
3 Months Ended |
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Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company uses the services of a travel agency owned by a relative of one of the Company’s key stockholders. The Company incurred travel related expenses in the amount of approximately less than $0.1 million for the three months ended March 31, 2022. There were no travel expenses for the three months ended March 31, 2021. The Company has historically leased office spaces in the United States and The Netherlands from an affiliate. Rental expense in connection with the leased space was approximately $0.1 million for the three months ended March 31, 2022. There was no rental expense incurred for the three months ended March 31, 2021. There were no outstanding amounts due to or from related parties as of March 31, 2022 and December 31, 2021. The Company’s Co-Chief Executive Officers, both of whom are also members of the Company’s board of directors, are the two sole members of the board of directors of the Lemonade Foundation. The Company contributed 500,000 shares of common stock with a fair market value of $24.36 per share (see Note 10). In connection with the Follow-on Offering as discussed in Note 10, Lemonade Foundation sold 100,000 shares of the contributed shares of the Company. As of March 31, 2022, there were no outstanding amounts due to or from the Lemonade Foundation.
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Commitment and Contingent Liabilities |
3 Months Ended |
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Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingent Liabilities | Commitments and Contingent Liabilities Litigation The Company is occasionally a party to routine claims or litigation incidental to its business. The Company records accruals for loss contingencies with these legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated. The Company has been made a party to class action litigation alleging that certain of our business practices were improper. The Company has determined that the liability associated with this matter is probable and can be reasonably estimated and therefore has accrued a liability for this matter in accordance with ASC 450, Contingencies. The Company will continue to monitor all legal issues and adjust the accrued liability as new information and further developments arise. Charges and guarantees The Company provided a guarantee with respect to the office lease in the Netherlands in the amount of $0.2 million. There were no guarantees as of December 31, 2021.
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Geographical Breakdown of Gross Written Premium |
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Geographical Breakdown of Gross Written Premium | Geographical Breakdown of Gross Written Premium The Company has a single reportable segment and offers insurance coverage under the homeowners multi-peril, inland marine and general liability lines of business. Gross written premium by jurisdiction are as follows ($ in millions):
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Summary of Significant Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | The accompanying interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated upon consolidation. All foreign currency amounts in the condensed consolidated statement of operations and comprehensive loss have been translated using an average rate for the reporting period. All foreign currency balances in the balance sheet have been translated using the spot rate at the end of the reporting period. All figures expressed, except share amounts, are in U.S. dollars in millions. |
Use of estimates | The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, the Company’s management evaluates estimates, including those related to contingent assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expense during the reporting period. Such estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities at the dates of the condensed consolidated financial statements, and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in the Company’s condensed consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, reinsurance recoverables on unpaid losses and valuation allowance on deferred tax assets. |
Cash, cash equivalents and restricted cash | Cash and cash equivalents consist primarily of bank deposits and money market accounts with maturities of three months or less at the date of acquisition and are stated at cost, which approximates fair value. The Company’s restricted cash relates to security deposits for an office lease in the Netherlands. The carrying value of restricted cash approximates fair value. |
Deferred offering costs | The Company capitalizes certain legal, accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction to the carrying value of stockholders' equity (deficit) as a reduction of additional paid-in capital generated as a result of such offering. On January 14, 2021, the Company completed a Follow-on Offering of common stock, as defined and discussed in detail in Note 10, which generated net proceeds of $525.7 million, after deducting underwriting discounts and offering costs. On February 1, 2021, the underwriters exercised their option to purchase additional shares, and generated additional net proceeds to us of $114.6 million. Deferred offering costs from the Follow-on Offering amounted to $0.4 million. |
Recent accounting pronouncements | Leases In February 2016, the FASB issued Leases (Topic 842) ("ASU 2016-02"), as subsequently amended, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors), and replaces the existing guidance in ASC 840, Leases. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine the recognition pattern of lease expense over the term of the lease. In addition, a lessee is required to record (i) a right-of-use asset and a lease liability the balance sheet for all leases with accounting lease terms of more than 12 months regardless of whether it is an operating or financing lease, and (ii) lease expense for operating leases and amortization and interest expense for financing leases, in statement of operations. Leases with a term of 12 months or less may be accounted for similar to existing guidance for operating leases under ASC 840. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842), which added an optional transition method that allows companies to adopt the standard as of the beginning of the year of adoption as opposed to the earliest comparative period presented. The Company adopted the new standard effective January 1, 2021, using the modified retrospective transition approach which uses the effective date as the date of initial application with no adjustment to prior periods presented. There was no adjustment to the opening balance of retained earnings. At adoption date, the new standard resulted in the recognition of an operating lease Right-of-Use (ROU) asset of $16.9 million included under Other Assets and a corresponding operating lease liabilities of $17.2 million included in Other Liabilities on the consolidated balance sheet. The difference of $0.3 million between the operating lease ROU assets and operating lease liabilities represents reclassification of deferred rent liability (the difference between the straight-line rent expenses and paid rent amounts under the leases) to operating lease ROU assets from other liabilities at the adoption date. The adoption of the standard did not have a material impact on the Company’s consolidated statements of operations and comprehensive loss, or consolidated statements of cash flows. The adoption impact relates to the Company’s existing operating leases for office spaces in the US, Netherlands and Israel. The Company has elected to apply the package of practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the lease classification of any expired or existing leases, or the capitalization of initial direct costs for any existing leases. Additionally, the Company elected the practical expedients that permit the exclusions of leases considered to be short-term. Current Expected Credit Losses In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. ASU 2016-13 introduced a current expected credit loss (CECL) model for measuring expected credit losses for certain types of financial instruments held at the reporting date requiring significant judgment in application based on historical experience, current conditions and reasonable supportable forecasts, but is not prescriptive about certain aspects of estimating expected losses. The guidance replaced the current incurred loss model for measuring expected credit losses and provided for additional disclosure requirements. Subsequently, the FASB issued additional ASUs on Topic 326 that did not change the core principle of the guidance in ASU 2016-13, but provided clarification and implementation guidance on certain aspects of ASU 2016-13, and have the same effective date and transition requirements as ASU 2016-13. The Company adopted the guidance using a modified retrospective approach as of January 1, 2021 which resulted in no cumulative-effect adjustment to retained earnings. The updated guidance in ASU 2016-13 also amended the previous other-than-temporary impairment (“OTTI”) model for available-for-sale fixed income securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. In addition, the length of time a security has been in an unrealized loss position will no longer impact the determination of whether a credit loss exists. The Company adopted the guidance related to available-for-sale fixed income securities on January 1, 2021 using a prospective transition approach for available-for-sale fixed income securities that were purchased with credit deterioration or had recognized an OTTI write-down prior to the effective date. The effect of the prospective transition approach was to maintain the same amortized cost basis before and after the effective date.
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Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted cash | The following represents the Company’s cash, cash equivalents and restricted cash as of March 31, 2022 and December 31, 2021:
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Cash and cash equivalents | The following represents the Company’s cash, cash equivalents and restricted cash as of March 31, 2022 and December 31, 2021:
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost and fair values | The following tables present cost or amortized cost and fair values of investment in fixed maturities as of March 31, 2022 and December 31, 2021 ($ in millions):
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Contractual maturities of bonds | The following table presents the cost or amortized cost and estimated fair value of investments in fixed maturities as of March 31, 2022 by contractual maturity ($ in millions). Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Net investment income | An analysis of net investment income follows ($ in millions):
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Aging of gross unrealized losses | The following table presents the gross unrealized losses and related fair values for the Company’s investment in fixed maturities, grouped by duration of time in a continuous unrealized loss position as of March 31, 2022 and December 31, 2021 ($ in millions):
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Fair Value Measurements (Tables) |
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Fair value hierarchy for financial assets and liabilities | The following tables present the Company’s fair value hierarchy for financial assets and liabilities measured as of March 31, 2022 and December 31, 2021 ($ in millions):
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Unpaid Loss and Loss Adjustment Expense (Tables) |
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Activity in the liability for unpaid loss and LAE | The following table presents the activity in the liability for unpaid loss and loss adjustment expense ("LAE") for the three months ended March 31, 2022 and 2021 ($ in millions):
(1) Reinsurance recoverable in this table includes only ceded unpaid loss and LAE
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Other Liabilities and Accrued Expenses (Tables) |
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Other liabilities and accrued expenses | Other liabilities and accrued expenses as of March 31, 2022 and December 31, 2021 consist of the following ($ in millions):
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Stock-based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value assumptions | The fair value of each option granted for the three months ended March 31, 2022 and 2021 is estimated on the date of grant using the Black-Scholes model based on the following assumptions:
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Stock options activity | Stock options
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Restricted stock units activity | Restricted Stock Units
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Stock-based compensation expense | Stock-based compensation expense from stock options and RSUs granted as included and classified in the condensed consolidated statements of operations for the three months ended March 31, 2022 and 2021 is as follows ($ in millions):
Stock-based compensation expense classified by award type as included in the condensed consolidated statements of operations is as follows ($ in millions):
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Net Loss Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted net loss per share | Basic and diluted net loss per share attributable to common stockholders was calculated as follows:
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Antidilutive potential common shares | The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect.
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Geographical Breakdown of Gross Written Premium (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross written premium by state | The Company has a single reportable segment and offers insurance coverage under the homeowners multi-peril, inland marine and general liability lines of business. Gross written premium by jurisdiction are as follows ($ in millions):
|
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions |
Feb. 01, 2021 |
Jan. 14, 2021 |
Nov. 08, 2021 |
Jan. 01, 2021 |
---|---|---|---|---|
Sale of Stock [Line Items] | ||||
Offering costs | $ 0.4 | |||
Accounting Standards Update 2016-02 | Other Assets | ||||
Sale of Stock [Line Items] | ||||
Right-of-use asset | $ 0.3 | $ 16.9 | ||
Accounting Standards Update 2016-02 | Other Liabilities | ||||
Sale of Stock [Line Items] | ||||
Lease liabilities | $ 17.2 | |||
Deferred rent credit | $ (0.3) | |||
Public Stock Offering | ||||
Sale of Stock [Line Items] | ||||
Net proceeds from sale | $ 525.7 | |||
Underwriter's option | ||||
Sale of Stock [Line Items] | ||||
Net proceeds from sale | $ 114.6 | $ 114.6 |
Summary of Significant Accounting Policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 234.8 | $ 270.6 | ||
Restricted cash | 0.2 | 0.0 | ||
Cash, cash equivalents and restricted cash | $ 235.0 | $ 270.6 | $ 1,174.7 | $ 571.4 |
Acquisition of a Business (Details) - Metromile $ in Millions |
Nov. 08, 2021
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Percent of equity acquired | 100.00% |
Equity value | $ 500.0 |
Cash value | $ 200.0 |
Conversion ratio | 19 |
Investments - Amortized Cost and Fair Values (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | $ 714.5 | $ 696.8 |
Gross unrealized gains | 0.0 | 0.1 |
Gross unrealized losses | (19.8) | (5.5) |
Fair Value | 694.7 | 691.4 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 611.2 | 593.4 |
Gross unrealized gains | 0.0 | 0.0 |
Gross unrealized losses | (16.8) | (4.7) |
Fair Value | 594.4 | 588.7 |
U.S. Government obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 102.1 | 102.2 |
Gross unrealized gains | 0.0 | 0.1 |
Gross unrealized losses | (3.0) | (0.8) |
Fair Value | 99.1 | 101.5 |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Cost or Amortized Cost | 1.2 | 1.2 |
Gross unrealized gains | 0.0 | 0.0 |
Gross unrealized losses | 0.0 | 0.0 |
Fair Value | $ 1.2 | $ 1.2 |
Investments - Additional Information (Details) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2022
USD ($)
security
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2021
USD ($)
|
|
Investments, Debt and Equity Securities [Abstract] | |||
Gross unrealized losses | $ (19.8) | $ (5.5) | |
Realized investment gains (losses) (less than for the three months ended March 31, 2022) | $ (0.1) | $ 0.0 | |
Number of debt securities held, unrealized loss position | security | 279 |
Investments - Contractual Maturities of Bonds (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Cost or Amortized Cost | ||
Due in one year or less | $ 158.9 | |
Due after one year through five years | 555.6 | |
Due after five years through ten years | 0.0 | |
Due after ten years | 0.0 | |
Cost or Amortized Cost | 714.5 | $ 696.8 |
Fair Value | ||
Due in one year or less | 157.2 | |
Due after one year through five years | 537.5 | |
Due after five years through ten years | 0.0 | |
Due after ten years | 0.0 | |
Fair Value | $ 694.7 | $ 691.4 |
Investments - Net Investment Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Net Investment Income [Line Items] | ||
Gross investment income | $ 1.0 | $ 0.2 |
Investment expense | 0.1 | 0.0 |
Net investment income | 0.9 | 0.2 |
Interest on cash and cash equivalents | ||
Net Investment Income [Line Items] | ||
Net investment income | 0.0 | 0.2 |
Fixed maturities | ||
Net Investment Income [Line Items] | ||
Net investment income | 0.9 | 0.0 |
Short-term investments | ||
Net Investment Income [Line Items] | ||
Net investment income | $ 0.1 | $ 0.0 |
Unpaid Loss and Loss Adjustment Expense - Activity (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Unpaid loss and LAE at beginning of period | $ 97.9 | $ 46.3 |
Less: Reinsurance recoverable at beginning of period | 72.7 | 36.3 |
Net unpaid loss and LAE at beginning of period | 25.2 | 10.0 |
Add: Incurred loss and LAE, net of reinsurance, related to: | ||
Current year | 24.8 | 16.7 |
Prior years | (0.4) | (0.2) |
Total incurred | 24.4 | 16.5 |
Deduct: Paid loss and LAE, net of reinsurance, related to: | ||
Current year | 10.6 | 8.3 |
Prior years | 10.8 | 3.9 |
Total paid | 21.4 | 12.2 |
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period | 28.2 | 14.3 |
Reinsurance recoverable at end of period | 79.4 | 47.9 |
Unpaid loss and LAE, gross of reinsurance recoverable, at end of period | $ 107.6 | $ 62.2 |
Unpaid Loss and Loss Adjustment Expense - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jul. 01, 2021 |
Mar. 31, 2022 |
Mar. 31, 2021 |
Jun. 30, 2021 |
|
Effects of Reinsurance [Line Items] | ||||
Favorable (unfavorable) development on net loss and LAE reserves | $ (0.4) | $ (0.2) | ||
Current accident year incurred loss and LAE | 24.8 | 16.7 | ||
Reinsurance program, minimum losses threshold | $ 60.0 | |||
Winter Storm Uri | ||||
Effects of Reinsurance [Line Items] | ||||
Current accident year incurred loss and LAE | $ 6.5 | |||
Proportional Reinsurance Contracts | ||||
Effects of Reinsurance [Line Items] | ||||
Percent of contracts subject to participation through reinsurance | 70.00% | 75.00% | ||
Ceded commission percentage | 25.00% | |||
Claims funding percentage | 75.00% | |||
Non-Proportional Reinsurance Contracts | ||||
Effects of Reinsurance [Line Items] | ||||
Percent of contracts subject to participation through reinsurance | 25.00% |
Other Liabilities and Accrued Expenses (Details) - USD ($) $ in Millions |
Mar. 31, 2022 |
Dec. 31, 2021 |
---|---|---|
Accrued advertising costs | $ 10.5 | $ 11.2 |
Employee compensation | 6.9 | 5.4 |
Income taxes payable | 5.6 | 4.7 |
Payable for securities | 5.0 | 0.0 |
Accrued professional fees | 4.9 | 4.6 |
Advance premium | 2.8 | 2.0 |
Premium taxes payable | 2.5 | 5.4 |
Other payables | 6.1 | 1.8 |
Total other liabilities and accrued expenses | 68.3 | 57.4 |
Other Liabilities and Accrued Liabilities | ||
Lease liabilities | $ 24.0 | $ 22.3 |
Stock-based Compensation - Fair Value Assumptions (Details) - Stock options |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average expected term (years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Risk-free interest rate | 1.70% | 0.70% |
Volatility | 48.00% | 50.00% |
Expected dividend yield | 0.00% | 0.00% |
Stock-based Compensation - Restricted Stock Units Activity (Details) - RSUs |
3 Months Ended |
---|---|
Mar. 31, 2022
$ / shares
shares
| |
Number of shares | |
Outstanding (in shares) | shares | 335,814 |
Granted (in shares) | shares | 175,233 |
Vested (in shares) | shares | (15,967) |
Cancelled (in shares) | shares | (19,331) |
Outstanding (in shares) | shares | 475,749 |
Grant Date Fair Value | |
Outstanding (usd per share) | $ / shares | $ 66.94 |
Granted (usd per share) | $ / shares | 22.18 |
Vested (usd per share) | $ / shares | 82.94 |
Cancelled (usd per share) | $ / shares | 47.72 |
Outstanding (usd per share) | $ / shares | $ 50.69 |
Income Taxes (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Income Tax Disclosure [Abstract] | ||
Effective tax rate | (3.00%) | (1.90%) |
Net Loss Per Share - Reconciliation (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Numerator: | ||
Net loss attributable to common stockholders - basic | $ (74.8) | $ (49.0) |
Net loss attributable to common stockholders - diluted | $ (74.8) | $ (49.0) |
Denominator: | ||
Weighted average common shares outstanding—basic (in shares) | 61,698,568 | 60,218,652 |
Weighted average common shares outstanding—diluted (in shares) | 61,698,568 | 60,218,652 |
Net loss per share attributable to common stockholders—basic (usd per share) | $ (1.21) | $ (0.81) |
Net loss per share attributable to common stockholders—diluted (usd per share) | $ (1.21) | $ (0.81) |
Net Loss Per Share - Antidilutive Potential Common Shares (Details) - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2022 |
Mar. 31, 2021 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares | 6,831,023 | 4,891,866 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares | 6,355,274 | 4,841,616 |
Unvested restricted stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive potential common shares | 475,749 | 50,250 |
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