Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 08, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39754 | |
Entity Registrant Name | Doma Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-1956909 | |
Entity Address, Address Line One | 101 Mission Street | |
Entity Address, Address Line Two | Suite 740 | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94105 | |
City Area Code | 650 | |
Local Phone Number | 419-3827 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 328,495,942 | |
Entity Central Index Key | 0001722438 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Class A common stock, par value $0.0001 | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | DOMA | |
Security Exchange Name | NYSE | |
Warrants, each whole warrant exercisable for one share at an exercise price of $11.50 per share | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | |
Trading Symbol | DOMA.WS | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and cash equivalents | $ 186,400 | $ 379,702 |
Restricted cash | 2,965 | 4,126 |
Fixed maturities | ||
Held-to-maturity debt securities, at amortized cost (net of allowance for credit losses of $433 at September 30, 2022 and $0 at December 31, 2021) | 46,132 | 67,164 |
Available-for-sale debt securities, at fair value (amortized cost $48,399 at September 30, 2022 and $0 at December 31, 2021) | 47,584 | 0 |
Mortgage loans | 302 | 2,022 |
Other long-term investments | 325 | 325 |
Total investments | 94,343 | 69,511 |
Receivables (net of allowance for credit losses of $1,428 at September 30, 2022 and $1,082 at December 31, 2021) | 10,469 | 15,498 |
Prepaid expenses, deposits and other assets | 11,558 | 15,692 |
Lease right-of-use assets | 27,636 | |
Fixed assets (net of accumulated depreciation of $29,650 at September 30, 2022 and $19,543 at December 31, 2021) | 63,558 | 45,953 |
Title plants | 14,533 | 13,952 |
Goodwill | 77,741 | 111,487 |
Total assets | 489,203 | 655,921 |
Liabilities and stockholders’ equity | ||
Accounts payable | 3,441 | 6,930 |
Accrued expenses and other liabilities | 34,955 | 54,149 |
Lease liabilities | 29,089 | |
Senior secured credit agreement, net of debt issuance costs and original issue discount | 151,383 | 141,769 |
Liability for loss and loss adjustment expenses | 83,791 | 80,267 |
Warrant liabilities | 1,040 | 16,467 |
Sponsor Covered Shares liability | 312 | 5,415 |
Total liabilities | 304,011 | 304,997 |
Commitments and contingencies (see Note 12) | ||
Stockholders’ equity: | ||
Common stock, 0.0001 par value; 2,000,000,000 shares authorized at September 30, 2022; 327,872,190 and 323,347,806 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 33 | 33 |
Additional paid-in capital | 571,167 | 543,070 |
Accumulated deficit | (385,369) | (192,179) |
Accumulated other comprehensive income | (639) | 0 |
Total stockholders’ equity | 185,192 | 350,924 |
Total liabilities and stockholders’ equity | $ 489,203 | $ 655,921 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Allowance for credit loss | $ 433 | $ 0 |
Amortized Cost | 48,399 | 0 |
Provision for doubtful accounts | 1,428 | 1,082 |
Accumulated depreciation | $ 29,650 | $ 19,543 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, shares issued (in shares) | 327,872,190 | 323,347,806 |
Common stock, shares outstanding (in shares) | 327,872,190 | 323,347,806 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Revenues: | |||||
Net premiums written | [1] | $ 94,488 | $ 141,491 | $ 299,080 | $ 358,754 |
Escrow, other title-related fees and other | 12,627 | 20,452 | 43,106 | 59,092 | |
Investment, dividend and other income | 741 | 639 | 1,621 | 2,518 | |
Total revenues | 107,856 | 162,582 | 343,807 | 420,364 | |
Expenses: | |||||
Premiums retained by Third-Party Agents | [2] | 65,141 | 91,596 | 200,381 | 227,115 |
Title examination expense | 3,709 | 5,289 | 14,836 | 15,643 | |
Provision for claims | 4,665 | 6,685 | 15,586 | 16,741 | |
Personnel costs | 60,481 | 62,410 | 211,507 | 159,829 | |
Other operating expenses | 20,656 | 21,693 | 67,047 | 53,038 | |
Goodwill impairment | 33,746 | 0 | 33,746 | 0 | |
Total operating expenses | 188,398 | 187,673 | 543,103 | 472,366 | |
Loss from operations | (80,542) | (25,091) | (199,296) | (52,002) | |
Other (expense) income: | |||||
Change in fair value of Warrant and Sponsor Covered Shares liabilities | 1,438 | (4,478) | 20,531 | (4,478) | |
Interest expense | (4,584) | (4,531) | (13,280) | (12,341) | |
Loss before income taxes | (83,688) | (34,100) | (192,045) | (68,821) | |
Income tax expense | (425) | (170) | (746) | (506) | |
Net loss | $ (84,113) | $ (34,270) | $ (192,791) | $ (69,327) | |
Earnings per share: | |||||
Net loss per share attributable to stockholders - basic (in usd per share) | $ (0.26) | $ (0.14) | $ (0.59) | $ (0.54) | |
Net loss per share attributable to stockholders - diluted (in usd per share) | $ (0.26) | $ (0.14) | $ (0.59) | $ (0.54) | |
Weighted average shares outstanding common stock - basic (in shares) | 326,820,954 | 245,003,754 | 325,207,884 | 128,105,954 | |
Weighted average shares outstanding common stock - diluted (in shares) | 326,820,954 | 245,003,754 | 325,207,884 | 128,105,954 | |
[1]Net premiums written includes revenues from a related party of $34.8 million and $30.3 million during the three months ended September 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $96.1 million and $81.9 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11).[2]Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.9 million and $24.8 million during the three months ended September 30, 2022 and 2021, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $77.5 million and $66.6 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11). |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Net premiums written | [1] | $ 94,488 | $ 141,491 | $ 299,080 | $ 358,754 |
Premiums retained by agents | [2] | 65,141 | 91,596 | 200,381 | 227,115 |
Lennar | Affiliated Entity | |||||
Net premiums written | 34,795 | 30,298 | 96,126 | 81,925 | |
Premiums retained by agents | $ 27,932 | $ 24,772 | $ 77,542 | $ 66,606 | |
[1]Net premiums written includes revenues from a related party of $34.8 million and $30.3 million during the three months ended September 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $96.1 million and $81.9 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11).[2]Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.9 million and $24.8 million during the three months ended September 30, 2022 and 2021, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $77.5 million and $66.6 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11). |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (84,113) | $ (34,270) | $ (192,791) | $ (69,327) |
Other comprehensive loss, net of tax: | ||||
Unrealized loss on available-for-sale debt securities, net of tax | (876) | 0 | (639) | (179) |
Reclassification adjustment for realized gain on sale of available-for-sale debt securities, net of tax | 0 | 0 | 0 | (507) |
Comprehensive loss | $ (84,989) | $ (34,270) | $ (193,430) | $ (70,013) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Preferred Stock Preferred Stock Series A | Preferred Stock Preferred Stock Series A-1 | Preferred Stock Preferred Stock Series A-2 | Preferred Stock Preferred Stock Series B | Preferred Stock Preferred Stock Series C | Common Stock | Common Stock Common Stock | Additional Paid-in Capital | Additional Paid-in Capital Common Stock | Accumulated Deficit | Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment | Accumulated Other Comprehensive Income (Loss) |
Beginning balance (in shares) at Dec. 31, 2020 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 62,832,307 | |||||||||
Beginning balance at Dec. 31, 2020 | $ 188,031 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | $ 266,464 | $ (79,123) | $ 686 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Exercise of stock options (in shares) | 2,637,441 | ||||||||||||||
Exercise of stock options | 1,267 | 1,267 | |||||||||||||
Stock-based compensation expenses | 2,289 | 2,289 | |||||||||||||
Original issue discount on senior secured credit agreement | 18,519 | 18,519 | |||||||||||||
Net loss | (11,758) | (11,758) | |||||||||||||
Other comprehensive income | (686) | (686) | |||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 65,469,748 | |||||||||
Ending balance at Mar. 31, 2021 | 197,662 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 288,539 | (90,881) | 0 | |||||
Beginning balance (in shares) at Dec. 31, 2020 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 62,832,307 | |||||||||
Beginning balance at Dec. 31, 2020 | 188,031 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 266,464 | (79,123) | 686 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net loss | (69,327) | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | 0 | 0 | 321,544,052 | |||||||||
Ending balance at Sep. 30, 2021 | $ 381,873 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 530,290 | (148,450) | 0 | |||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 | ||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 62,832,307 | |||||||||
Beginning balance at Dec. 31, 2020 | $ 188,031 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 266,464 | (79,123) | 686 | |||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | 0 | 0 | 0 | 0 | 323,347,806 | |||||||||
Ending balance at Dec. 31, 2021 | 350,924 | $ (399) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 543,070 | (192,179) | $ (399) | 0 | |||
Beginning balance (in shares) at Mar. 31, 2021 | 43,737,586 | 48,913,906 | 14,003,187 | 15,838,828 | 60,665,631 | 65,469,748 | |||||||||
Beginning balance at Mar. 31, 2021 | 197,662 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 288,539 | (90,881) | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Exercise of stock options (in shares) | 535,551 | ||||||||||||||
Exercise of stock options | 109 | 109 | |||||||||||||
Stock-based compensation expenses | 2,967 | 2,967 | |||||||||||||
Exercise of stock warrants (in shares) | 28,870,387 | ||||||||||||||
Exercise of stock warrants | 187 | 187 | |||||||||||||
Net loss | (23,299) | (23,299) | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 43,737,586 | 77,784,293 | 14,003,187 | 15,838,828 | 60,665,631 | 66,005,299 | |||||||||
Ending balance at Jun. 30, 2021 | 177,626 | $ 1 | $ 1 | $ 0 | $ 0 | $ 1 | $ 1 | 291,802 | (114,180) | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Exercise of stock options (in shares) | 82,230 | ||||||||||||||
Exercise of stock options | 38 | 38 | |||||||||||||
Stock-based compensation expenses | 3,191 | 3,191 | |||||||||||||
Net loss | (34,270) | (34,270) | |||||||||||||
Conversion of stock (in shares) | (43,737,586) | (77,784,293) | (14,003,187) | (15,838,828) | (60,665,631) | 212,029,525 | (1,227,451) | ||||||||
Conversion of stock | 22 | $ 30,080 | $ (1) | $ (1) | $ (1) | $ 21 | 4 | $ 30,080 | |||||||
Issuance of common stock in connection with Business Combination and PIPE Investment (in shares) | 44,654,449 | ||||||||||||||
Issuance of common stock in connection with Business Combination and PIPE Investment | 259,397 | $ 5 | 259,392 | ||||||||||||
Par value change for Old Doma Common Stock | 6 | $ 6 | |||||||||||||
Costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment | (54,217) | (54,217) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 0 | 0 | 0 | 0 | 0 | 321,544,052 | |||||||||
Ending balance at Sep. 30, 2021 | 381,873 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 530,290 | (148,450) | 0 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 0 | 0 | 0 | 0 | 323,347,806 | |||||||||
Beginning balance at Dec. 31, 2021 | 350,924 | (399) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 543,070 | (192,179) | (399) | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Exercise of stock options (in shares) | 957,648 | ||||||||||||||
Exercise of stock options | (97) | (97) | |||||||||||||
Vesting of RSU awards (in shares) | 42,800 | ||||||||||||||
Stock-based compensation expenses | 11,579 | 11,579 | |||||||||||||
Net loss | (50,026) | (50,026) | |||||||||||||
Ending balance (in shares) at Mar. 31, 2022 | 0 | 0 | 0 | 0 | 0 | 324,348,254 | |||||||||
Ending balance at Mar. 31, 2022 | 311,981 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 554,552 | (242,604) | 0 | |||||
Beginning balance (in shares) at Dec. 31, 2021 | 0 | 0 | 0 | 0 | 0 | 323,347,806 | |||||||||
Beginning balance at Dec. 31, 2021 | $ 350,924 | $ (399) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 543,070 | (192,179) | $ (399) | 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Exercise of stock options (in shares) | 1,960,728 | ||||||||||||||
Net loss | $ (192,791) | ||||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 0 | 0 | 0 | 0 | 0 | 327,872,190 | |||||||||
Ending balance at Sep. 30, 2022 | 185,192 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 571,167 | (385,369) | (639) | |||||
Beginning balance (in shares) at Mar. 31, 2022 | 0 | 0 | 0 | 0 | 0 | 324,348,254 | |||||||||
Beginning balance at Mar. 31, 2022 | 311,981 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 554,552 | (242,604) | 0 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Exercise of stock options (in shares) | 692,511 | ||||||||||||||
Exercise of stock options | 271 | 271 | |||||||||||||
Vesting of RSU awards (in shares) | 456,864 | ||||||||||||||
Stock-based compensation expenses | 8,442 | 8,442 | |||||||||||||
Net loss | (58,652) | (58,652) | |||||||||||||
Other comprehensive income | 237 | 237 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2022 | 0 | 0 | 0 | 0 | 0 | 325,497,629 | |||||||||
Ending balance at Jun. 30, 2022 | 262,279 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | 563,265 | (301,256) | 237 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Exercise of stock options (in shares) | 359,598 | ||||||||||||||
Exercise of stock options | 156 | 156 | |||||||||||||
Vesting of RSU awards (in shares) | 2,014,963 | ||||||||||||||
Stock-based compensation expenses | 7,746 | 7,746 | |||||||||||||
Net loss | (84,113) | (84,113) | |||||||||||||
Other comprehensive income | (876) | (876) | |||||||||||||
Ending balance (in shares) at Sep. 30, 2022 | 0 | 0 | 0 | 0 | 0 | 327,872,190 | |||||||||
Ending balance at Sep. 30, 2022 | $ 185,192 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 33 | $ 571,167 | $ (385,369) | $ (639) |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flow from operating activities: | ||
Net loss | $ (192,791) | $ (69,327) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Interest expense - paid in kind | 7,540 | 6,353 |
Depreciation and amortization | 11,234 | 7,705 |
Stock-based compensation expense | 27,767 | 8,447 |
Amortization of debt issuance costs and original issue discount | 2,074 | 1,429 |
Provision for credit losses | 673 | 562 |
Deferred income taxes | 616 | 377 |
Realized loss (gain) on debt securities | 12 | (908) |
Net unrealized loss on equity securities | 0 | 119 |
Loss (gain) on disposal of fixed assets and title plants | 186 | (11) |
Net amortization of premiums and accretion of discounts on fixed maturity securities | 526 | 901 |
Change in fair value of Warrant and Sponsor Covered Shares liabilities | (20,531) | 4,478 |
Goodwill impairment | 33,746 | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | 3,762 | (284) |
Prepaid expenses, deposits and other assets | 3,099 | (14,799) |
Lease right-of-use assets and lease liabilities | 949 | |
Accounts payable | (3,489) | (274) |
Accrued expenses and other liabilities | (18,094) | 13,813 |
Liability for loss and loss adjustments expenses | 3,524 | 8,872 |
Net cash used in operating activities | (139,197) | (32,547) |
Cash flow from investing activities: | ||
Proceeds from calls and maturities of investments: Held-to-maturity | 23,827 | 23,514 |
Proceeds from sales, calls and maturities of investments: Available-for-sale | 1,429 | 7,817 |
Proceeds from sales of investments: Equity securities | 0 | 2,000 |
Proceeds from sales and principal repayments of investments: Mortgage loans | 1,720 | 60 |
Purchases of investments: Held-to-maturity | (3,955) | (33,650) |
Purchases of investments: Available-for-sale | (49,640) | 0 |
Proceeds from sales of fixed assets | 73 | 306 |
Purchases of fixed assets | (29,096) | (18,842) |
Proceeds from sale of title plants and dividends from title plants | 627 | 482 |
Purchases of title plants | (581) | 0 |
Net cash used in investing activities | (55,596) | (18,313) |
Cash flow from financing activities: | ||
Proceeds from issuance of senior secured credit agreement | 0 | 150,000 |
Payments on loan from a related party | 0 | (65,532) |
Debt issuance costs | 0 | (579) |
Exercise of stock warrants | 0 | 48 |
Exercise of stock options | 330 | 1,690 |
Redemptions of redeemable common and preferred stock | 0 | (294,856) |
Net proceeds from Business Combination and PIPE Investment | 0 | 624,952 |
Payment of costs directly attributable to the issuance of common stock in connection with Business Combination and PIPE Investment | 0 | (63,195) |
Net cash provided by financing activities | 330 | 352,528 |
Net change in cash and cash equivalents and restricted cash | (194,463) | 301,668 |
Cash and cash equivalents and restricted cash at the beginning period | 383,828 | 112,022 |
Cash and cash equivalents and restricted cash at the end of period | 189,365 | 413,690 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 6,039 | 5,347 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Unrealized loss on available-for-sale debt securities | (639) | (179) |
Issuance of penny warrants related to the senior secured credit agreement | 0 | (18,519) |
Warrant liabilities recognized in conjunction with the Business Combination | 0 | 19,240 |
Net liabilities assumed in the Business Combination | $ 0 | $ 9,517 |
Organization and business opera
Organization and business operations | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and business operations | Organization and business operations On July 28, 2021 (the “Closing Date”), Capitol Investment Corp. V (“Capitol”) consummated a business combination (the “Business Combination”) with Doma Holdings, Inc., a Delaware corporation (“Old Doma”), pursuant to the agreement and plan of merger, dated March 2, 2021, by and among Capitol, Capitol V Merger Sub, Inc., a wholly owned subsidiary of Capitol (“Merger Sub”), and Old Doma (as amended on March 18, 2021, the “Agreement”). In connection with the closing of the Business Combination, Old Doma changed its name to States Title Holding, Inc. (“States Title”), Capitol changed its name to Doma Holdings, Inc. (“Doma”) and Old Doma became a wholly owned subsidiary of Doma. Doma continues the existing business operations of Old Doma as a publicly traded company. See Note 3 for additional information on the Business Combination. Unless the context otherwise requires, references herein to “company,” “Company,” “Doma,” “we,” “us,” “our” and similar terms refer to Doma Holdings, Inc. (f/k/a Capitol Investment Corp. V) and its consolidated subsidiaries. References to “Capitol” refer to our legal predecessor company prior to the consummation of the Business Combination. References to “Old Doma” refer to Old Doma prior to the Business Combination and to States Title, the wholly owned subsidiary of Doma, upon the consummation of the Business Combination. Headquartered in San Francisco, California, Doma is a real estate technology company that is architecting the future of real estate transactions. Using machine intelligence and our proprietary technology solutions, we are creating a vastly more simple, efficient, and affordable real estate closing experience for current and prospective homeowners, lenders, title agents and real estate professionals. We are licensed to underwrite title insurance in 45 states and the District of Columbia. Old Doma was initially formed as a wholly-owned subsidiary of States Title Inc. (“Legacy States Title”) to combine the operations of Legacy States Title and the retail agency and title insurance underwriting business (the “Acquired Business”) of North American Title Group, LLC (“NATG”), a subsidiary of Lennar Corporation (“Lennar”). We completed the acquisition of the Acquired Business on January 7, 2019, which we refer hereinafter as the “North American Title Acquisition.” Old Doma survived the North American Title Acquisition as the parent company and now wholly owns the businesses operated by Legacy States Title and the Acquired Business. We conduct our operations through two reportable segments, (1) Distribution and (2) Underwriting. See further discussion in Note 7 for additional information regarding segment information. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | Summary of significant accounting policies Basis of presentation The accompanying condensed consolidated balance sheet as of September 30, 2022 and the condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, and condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of September 30, 2022 and its results of operations, including its comprehensive loss, and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021. All adjustments are of a normal recurring nature. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2022. These unaudited interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements and related notes. References to the Accounting Standard Codification (“ASC”) and Accounting Standard Updates (“ASU”) included hereinafter refer to the Accounting Standards Codification and Updates issued by the Financial Accounting Standards Board (“FASB”) as the source of authoritative U.S. GAAP. The accompanying condensed consolidated financial statements include the accounts of the Company and the accounts of the Company’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from the estimates made by management. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. Significant items subject to such estimates and assumptions include, but are not limited to, reserves for incurred but not reported claims, the useful lives of property and equipment, accrued net premiums written from Third-Party Agent (as defined in Item 2) referrals, fair value measurements, valuation of goodwill and the valuations of stock-based compensation arrangements and the Sponsor Covered Shares liability (as defined below). Title plants Title plants are carried at cost, with costs incurred to maintain, update and operate title plants expensed as incurred. Because properly maintained title plants have indefinite lives and do not diminish in value with the passage of time, no provision has been made for depreciation or amortization. The Company analyzes the title plants for impairment when events or circumstances indicate that the carrying amount may not be recoverable. This analysis includes, but is not limited to, the effects of obsolescence, duplication, demand and other economic factors. There were no impairments of title plants for the three and nine months ended September 30, 2022 and 2021. Goodwill Goodwill represents the excess of the acquisition price over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is assigned to one or more reporting units on the date of acquisition. We review our goodwill for impairment annually on October 1 of each year and between annual tests if events or circumstances arise that would more likely than not reduce the fair value of any one of our reporting units below its respective carrying amount. In performing our annual goodwill impairment test, we first perform a qualitative assessment, which requires that we consider macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in the Company’s stock price, changes in management or key personnel, changes in strategy, changes in customers, changes in the composition or carrying amount of a reporting unit or other factors that have the potential to impact fair value. If, after assessing the totality of events and circumstances, we determine that it is more likely than not that the fair values of our reporting units are greater than the carrying amounts, then the quantitative goodwill impairment test is not performed. If the fair value of the reporting unit is less than its carrying amount, a non-cash impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the loss not exceeding the total amount of goodwill allocated to that reporting unit. Any impairment is charged to operations in the period that the impairment is identified. Reinsurance The Company utilizes excess of loss and quota share reinsurance programs to limit its maximum loss exposure by reinsuring certain risks with other insurers. The Company has two reinsurance treaties: the Excess of Loss Treaty and the Quota Share Treaty. Under the Excess of Loss Treaty, we cede liability over $15.0 million on all files. Excess of loss reinsurance coverage protects the Company from a large loss from a single loss occurrence. The Excess of Loss Treaty provides for ceding liability above the retention of $15.0 million for all policies up to a liability cap of $500.0 million. Under the Quota Share Treaty, during the period from January 1, 2021 to February 23, 2021 the Company ceded 100% of the written premium on its instantly underwriting policies. Effective February 24, 2021, the Company cedes 25% of the written premium on our instantly underwritten policies. Payments and recoveries on reinsured losses for the Company’s title insurance business were immaterial during the three and nine months ended September 30, 2022 and 2021. Ceding commission from reinsurance transactions are presented as revenue within the “Escrow, other title-related fees and other” revenue line item in the consolidated statements of operations. Total premiums ceded in connection with reinsurance are netted against the written premiums in the consolidated statements of operations. Gross premiums earned and ceded premiums are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross premiums earned 94,889 142,995 301,638 363,650 Ceded premiums (401) (1,504) (2,558) (4,896) Net premiums earned 94,488 141,491 299,080 358,754 Percentage of amount assumed to net 99.6 % 98.9 % 99.2 % 98.7 % Income taxes Our effective tax rate for the nine months ended September 30, 2022 and 2021 was (1)% as a result of a full valuation allowance recorded against the deferred tax assets. In determining the realizability of the net U.S. federal and state deferred tax assets, we consider numerous factors including historical profitability, estimated future taxable income, prudent and feasible tax planning strategies, and the industry in which we operate. As of September 30, 2022 and December 31, 2021, the Company carried a valuation allowance against deferred tax assets as management believes it is more likely than not that the benefit of the net deferred tax assets covered by that valuation allowance will not be realized. A net deferred tax liability has been recorded as of September 30, 2022 and December 31, 2021 o f $2.0 million and $1.8 million, respectively, and is included in accrued expenses and other liabilities within the accompanying condensed consolidated balance sheets. Management reassesses the realization of the deferred tax assets each reporting period. The Company has approximatel y $0.2 million of pre-2018 federal net operating losses subject to expiration beginning in 2036. The remainder of the federal net operating losses have no expiration. The Company’s state net operating losses are subject to various expirations, beginning in 2030. The Company’s 2018 through 2020 tax years remain open to federal examinations. The Company’s 2017 through 2020 tax years remain open to state tax examinations. The Company believes that as of September 30, 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 September 30, 2022. Leases The Company determines if a contract contains a lease at inception of the contract. The Company's inventory of leases primarily consists of operating office space and office equipment leases which are recorded as a lease obligation liability and as a lease right-of-use asset on the accompanying condensed consolidated balance sheet. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. The Company's lease obligation is recorded at the present value of the lease payments based on the term of the lease. The Company applies an incremental borrowing rate of interest as of the effective date of adoption or the lease effective date equivalent to a collateralized borrowing rate with similar terms. The discount rate used to calculate the present value of our future minimum lease payments is based, where appropriate, on the Company's incremental borrowing rate of its current loan and security agreement. Lease expenses for lease payments, where appropriate, are recognized on a straight-line basis over the lease term. Short-term leases of 12 months or less are recorded in the condensed consolidated balance sheet and lease payments are recognized on the condensed consolidated statement of operations. The Company accounts for agreements with lease and non-lease components as a single lease component. For more information on leases, refer to Note 17 of this Quarterly Report. Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions and our investment portfolio. The Company has not experienced losses on the cash accounts and management believes the Company is not exposed to significant risks on such accounts. Additionally, we manage the exposure to credit risk in our investment portfolio by investing in high quality securities and diversifying our holdings. Our investment portfolio is comprised of corporate debt, certificates of deposit, single-family residential mortgage loans, and U.S. Treasuries. Emerging Growth Company and Smaller Reporting Company Subsequent to the Business Combination described in Note 3, the Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s condensed financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Additionally, subsequent to the Business Combination described in Note 3, the Company is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. Recently issued and adopted accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The amendments in this and the related ASUs introduce broad changes to accounting for credit impairment of financial instruments. The primary updates include the introduction of a new current expected credit loss (“CECL”) model that is based on expected rather than incurred losses for instruments measured at amortized cost and amends the accounting for impairment of held-to-maturity securities and available-for-sale securities. This model incorporates past experience, current conditions and reasonable and supportable forecasts affecting collectability of these instruments. The amendments in this update are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The early adoption of this new guidance on January 1, 2022 required the Company to record an allowance for credit losses for the Company’s held-to-maturity investment portfolio, which resulted in an allowance of $0.4 million and a corresponding $0.4 million adjustment for the cumulative effect of a change in accounting principle, net of income taxes. For more information on the held-to-maturity allowance for credit losses, refer to Note 4 of this Quarterly Report. Prior to the adoption of the new guidance, the Company utilized an aging model to estimate credit losses on accounts receivable. As this aging model is allowed under the new guidance, there is no impact to the Company’s allowance for credit losses for accounts receivable. The adoption of this new standard did not have a significant impact on the condensed consolidated statements of operations or the condensed consolidated statements of cash flows. The guidance also requires additional disclosures regarding the Company’s held-to-maturity allowance for credit losses, which have been included within Note 4. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which provides guidance for accounting for leases. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. Modified or new leases subsequent to the effective date will follow ASC 2016-02. Accounting for lessors remains largely unchanged from current U.S. GAAP. Under ASU 2020-05, the effective date for adoption of ASU 2016-02 is fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. We early adopted this new guidance on January 1, 2022 under a modified retrospective transition approach using the cumulative-effect adjustment transition method approved by the FASB, which results in reporting for the comparative periods presented in accordance with the previous lease guidance under ASC 840. We elected the package of practical expedients but did not adopt the hindsight practical expedient as of January 1, 2022. The package of practical expedients allowed the Company not to reassess whether the arrangement contains a lease, lease classification and whether previously capitalized costs qualify as initial direct costs. The practical expedients allowed the Company to continue classifying all of its leases as operating leases as they were previously classified under ASC 840. The Company recognized lease liabilities of $24.4 million and corresponding right-of-use assets of $23.8 million in our consolidated balance sheet on January 1, 2022. The difference between the lease liabilities and corresponding right-of-use assets related to prepaid rent and deferred lease obligations recognized in prepaid expenses, deposits and other assets and accrued expenses and other liabilities, respectively, in our consolidated balance sheet on January 1, 2022, resulting in no cumulative-effect adjustment to opening equity. The new standard did not have a significant impact on the condensed consolidated statements of operations or the condensed consolidated statements of cash flows. The guidance also requires additional disclosures regarding the Company’s lease portfolio, which have been included within Note 17. In January 2020, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. Specifically, ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 is effective for annual periods beginning after December 15, 2020, and interim periods beginning after December 15, 2020. ASU 2019-12 is effective for private entities for annual periods beginning after December 15, 2021, and interim periods beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU 2019-12 under the private company transition guidance beginning January 1, 2022, and the adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements or disclosures given the Company has a full valuation allowance and the scenarios for which the guidance offer simplification are not significant for the Company. Recently issued but not adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944), Targeted Improvements to the Accounting for Long-Duration Contracts, effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. In June of 2020, the FASB deferred the effective date of ASU 2018-12 for one-year in response to implementation challenges resulting from COVID-19. This update requires insurance companies to annually review and update the assumptions used for measuring the liability under long-duration contracts. The amendments in this ASU may be early adopted as of the beginning of an annual reporting period for which financial statements have not yet been issued, including interim financial statements. We do not currently expect to early adopt this standard. Although we have long-duration contracts, this specific guidance is not expected to impact our title insurance operations; therefore, we do not expect this standard to have a material impact on our condensed consolidated financial statements. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2022 | |
Reverse Recapitalization [Abstract] | |
Business Combination | Business Combination Capitol Business Combination As described in Note 1, on March 2, 2021, Old Doma entered into the Agreement with Capitol, a blank check company incorporated in the State of Delaware and formed for the purpose of effecting a merger. Pursuant to the Agreement, a newly formed subsidiary of Capitol was merged with and into Old Doma, and the Business Combination was completed on July 28, 2021. The Business Combination was accounted for as a reverse recapitalization and Capitol was treated as the acquired company for financial statement reporting purposes. Old Doma was deemed the predecessor for financial reporting purposes and Doma was deemed the successor SEC registrant, meaning that Old Doma’s financial statements for periods prior to the consummation of the Business Combination are disclosed in the financial statements included within this Quarterly Report and will be disclosed in Doma’s future periodic reports. No goodwill or other intangible assets were recorded, in accordance with GAAP. At the Closing Date, Doma received gross cash consideration of $345.0 million as a result of the reverse recapitalization from Capitol’s trust account, which was then reduced by the redemption of Class A common stock of $294.9 million. In addition, existing Old Doma stockholders and option holders received cash payments from the settlement of the net proceeds of the Business Combination totaling $20.1 million. In connection with the Business Combination, Capitol entered into subscription agreements with certain investors, whereby Doma issued 30,000,000 shares of common stock at $10.00 per share for an aggregate purchase price of $300.0 million (the “PIPE Investment”), which closed simultaneously with the consummation of the Business Combination. Upon the Closing Date, holders of Old Doma common stock, par value $0.0001 per share (“Old Doma Common Stock”) received shares of our common stock in an amount determined by the exchange ratio of approximately 5.994933 to 1 (the “Exchange Ratio”), which was based on the implied price per share prior to the Business Combination established within the Agreement. Reported shares and earnings per share available to holders of Old Doma’s Common Stock, prior to the Business Combination, have been retroactively restated reflecting the Exchange Ratio. Applicable share activity within the statement of changes in stockholder’s equity were also retroactively converted to our common stock at the Exchange Ratio. Old Doma recorded the net assets acquired from Capitol. The total estimated transaction costs directly attributable to the Business Combination are approximately $67.0 million, consisting of advisory, legal, share registration and other professional fees. $12.1 million of these fees represent underwriter fees incurred by Capitol prior to the Business Combination related to their initial public offering. Immediately after the Closing Date, 1,325,664 shares of common stock held by the Sponsor became subject to vesting, contingent upon the price of Doma’s common stock, par value $0.0001 (“Doma common stock”) exceeding certain thresholds (the “Sponsor Covered Shares”). Immediately after giving effect to the Business Combination and the PIPE Investment, there were 321,461,822 shares of common stock outstanding, which excludes the 1,325,664 of Sponsor Covered Shares. The Company is authorized to issue 2,000,000,000 shares of common stock having a par value of $0.0001 per share. Additionally, the Company is authorized to issue 100,000,000 shares of preferred stock having a par value of $0.0001 per share. As of September 30, 2022, there were 327,872,190 and 0 shares of common stock and preferred stock issued and outstanding, respectively, which excludes the 1,325,664 of Sponsor Covered Shares. On December 4, 2020, Capitol consummated its initial public offering, which included the issuance of 11,500,000 redeemable warrants (the “Public Warrants”). Simultaneously with the closing of the initial public offering, Capitol completed the private sale of 5,833,333 warrants (the “Private Placement Warrants”). These Warrants remain outstanding following the Business Combination and each whole warrant entitles the holder to purchase one share of our common stock at a price of $11.50 (see Note 16 for additional information). Immediately after the Closing Date, 20% of the aggregate of our common stock held by certain investors (collectively, the “Sponsor”) became subject to vesting, contingent upon the price of our common stock exceeding certain thresholds. The Sponsor Covered Shares will vest in two tranches: (i) one-half of such shares shall vest if the last reported sale price of the common stock equals or exceeds $15.00 for any 20 trading days within any 30-day trading period ending on or before the tenth anniversary of the Closing Date, and (ii) one-half of such shares shall vest if the last reported sale price of the common stock equals or exceeds $17.50 for any 20 trading days within any 30-day trading period ending on or before the tenth anniversary of the Closing Date. The Sponsor is also entitled to the Sponsor Covered Shares if a covered strategic transaction or change in control, as defined by the sponsor support agreement dated as of March 2, 2021 (the “Sponsor Support Agreement”) by and among the sponsors named thereto, Capitol and Old Doma, occurs prior to the ten Also following the Closing Date, the Sellers have the contingent right to receive up to an additional number of shares equal to 5% of the sum of (i) the aggregate number of outstanding shares of our common stock (including restricted common stock, but excluding Sponsor Covered Shares), plus (ii) the maximum number of shares underlying our options that are vested and the maximum number of shares underlying warrants to purchase shares of Doma common stock issued as replacement warrants for Old Doma warrants, in each case of these clauses (i) and (ii), as of immediately following the Closing Date (the “Seller Earnout Shares”). The Seller Earnout Shares are contingently issuable to the Sellers in two tranches: (i) one-half of such shares shall be issued if the last reported sale price of the common stock equals or exceeds $15.00 for any 20 trading days within any 30-day trading period ending on or before the fifth anniversary of the Closing Date, and (ii) one-half of such shares shall be issued if the last reported sale price of the common stock equals or exceeds $17.50 for any 20 trading days within any 30-day trading period ending on or before the fifth anniversary of the Closing Date. Since none of the conditions of the Seller Earnout Shares were met as of September 30, 2022, no related shares are included in the Company’s condensed consolidated balance sheets and condensed consolidated statements of changes in stockholders’ equity as of September 30, 2022 or for purposes of calculating earnings per share. Unless the context otherwise requires or otherwise indicates, share counts of Doma common stock provided in this Quarterly Report exclude both the Sponsor Covered Shares and the Seller Earnout Shares. North American Title Acquisition On January 7, 2019, we acquired from Lennar its subsidiary, North American Title Insurance Company, which operated its title insurance underwriting business, and its third-party title insurance agency business, which was operated under its North American Title Company brand (collectively, the “Acquired Business”), for total stock and deferred cash consideration of $171.7 million (the “North American Title Acquisition”), including $87.0 million in the form of a seller financing note. Goodwill of $111.5 million resulted from the North American Title Acquisition. The Company reviews goodwill for impairment annually on October 1 and more frequently if events or changes in circumstances indicate that an impairment may exist (“a triggering event”). During the three months ended September 30, 2022, management determined that the Company was less likely to reach previously forecasted revenue as a result of adverse mortgage and housing market conditions, including rapidly rising interest rates and low housing inventory. These factors and a sustained decrease in the Company’s stock price indicated that the Company had a triggering event. The Company performed a valuation of the Distribution and Underwriting reporting units using discounted cash flow and market valuation methodologies. The valuation considered the Company’s market capitalization compared to the enterprise value. The resulting valuation of the Underwriting reporting unit indicated that its estimated fair value was above its carrying value. The estimated fair value of the Distribution reporting unit was below its carrying value. As such, the Company determined that the Distribution reporting unit’s goodwill was impaired. During the three months ended September 30, 2022, the Company recognized a goodwill impairment charge of $33.7 million. The changes in the carrying value of goodwill, by segment, were as follows: Distribution Underwriting Total Beginning balance, January 1, 2022 $ 88,074 $ 23,413 $ 111,487 Impairment losses (33,746) — (33,746) Ending balance, September 30, 2022 $ 54,328 $ 23,413 $ 77,741 Accumulated impairment losses to goodwill were $33.7 million as of September 30, 2022. |
Investments and fair value meas
Investments and fair value measurements | 9 Months Ended |
Sep. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
Investments and fair value measurements | Investments and fair value measurements Held-to-maturity debt securities The cost basis, fair values and gross unrealized gains and losses of our held-to-maturity debt securities are as follows: September 30, 2022 December 31, 2021 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities (1) $ 38,258 $ 4 $ (2,089) $ 36,173 $ 62,078 $ 459 $ (207) $ 62,330 U.S. Treasury securities 8,070 — (187) 7,883 4,849 — (16) 4,833 Certificates of deposit 237 — — 237 237 — — 237 Total $ 46,565 $ 4 $ (2,276) $ 44,293 $ 67,164 $ 459 $ (223) $ 67,400 _______________ (1) Includes both U.S. and foreign corporate debt securities. The cost basis of held-to-maturity debt securities includes an adjustment for the amortization of premium or discount since the date of purchase. Held-to-maturity debt securities valued at approximately $4.4 million and $4.2 million were on deposit with various governmental authorities at September 30, 2022 and December 31, 2021, respectively, as required by law. The change in net unrealized gains and losses on held-to-maturity debt securities for the nine months ended September 30, 2022 and 2021 was $(2.5) million and $(0.3) million, respectively. Net realized gains of held-to-maturity debt securities are computed using the specific identification method and are included in the condensed consolidated statements of operations. The following table presents certain information regarding contractual maturities of our held-to-maturity debt securities: Maturity September 30, 2022 Amortized Cost % of Total Fair Value % of Total One year or less $ 22,688 49 % $ 22,356 50 % After one year through five years 23,877 51 % 21,937 50 % Total $ 46,565 100 % $ 44,293 100 % There were no held-to-maturity debt securities with contractual maturities after five years. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Net unrealized losses on held-to-maturity debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows: September 30, 2022 December 31, 2021 Corporate debt securities U.S. Treasury securities Total Corporate debt securities U.S. Treasury securities Total Less than 12 months Fair value $ 31,606 $ 6,455 $ 38,061 $ 18,309 $ 4,667 $ 22,976 Unrealized losses $ (1,638) $ (163) $ (1,801) $ (192) $ (16) $ (208) Greater than 12 months Fair value $ 3,316 $ 1,428 $ 4,744 $ 605 $ — $ 605 Unrealized losses $ (451) $ (24) $ (475) $ (15) $ — $ (15) Total Fair value $ 34,922 $ 7,883 $ 42,805 $ 18,914 $ 4,667 $ 23,581 Unrealized losses $ (2,089) $ (187) $ (2,276) $ (207) $ (16) $ (223) We believe that any unrealized losses on our held-to-maturity debt securities at September 30, 2022 are temporary based upon our current analysis of the issuers of the securities that we hold and current market conditions. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature. Under the CECL model, the Company recognizes credit losses for its held-to-maturity debt securities by setting up an allowance which is remeasured each reporting period, with changes in the allowance recorded in the condensed consolidated statements of operations. The Company establishes an allowance for credit losses based on a number of factors including the current economic conditions, management's expectations of future economic conditions and performance indicators, such as credit agency ratings and payment and default history. As of September 30, 2022, credit agency ratings on our U.S. Treasury and corporate debt securities ranged from AAA through B1. For our held-to-maturity debt securities, the Company's model estimates expected credit loss by multiplying the exposure at default by both the probability of default and loss given default (“LGD”). The probability of default and LGD percentages are estimated after considering historical experience with global default rates and unsecured bond recovery rates for horizons aligning to the Company’s held-to-maturity debt security portfolio. The calculated allowance is recorded as an offset to held-to-maturity debt securities in the condensed consolidated balance sheets and in the investment, dividend and other income line on the condensed consolidated statements of operations. Rollforward of Credit Loss Allowance for Held-to-Maturity Debt Securities Beginning balance, January 1, 2022 $ 399 Current-period provision for expected credit losses 34 Write-off charged against the allowance, if any — Recoveries of amounts previously written off, if any — Ending balance of the allowance for credit losses, September 30, 2022 $ 433 The current-period provision for expected credit losses is due to changes in portfolio composition, the maturity of certain securities, and changes in the credit ratings of certain securities. Available-for-sale debt securities The cost basis, fair values and gross unrealized gains and losses of our available-for-sale debt securities are as follows: September 30, 2022 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities (1) $ 18,488 $ — $ (308) $ 18,180 U.S. Treasury securities 28,445 — (482) 27,963 Foreign government securities 1,466 — (25) 1,441 Total $ 48,399 $ — $ (815) $ 47,584 _______________ (1) Includes both U.S. and foreign corporate debt securities. The Company had no available-for-sale securities or related unrealized gain or loss as of December 31, 2021. The cost basis of available-for-sale debt securities includes an adjustment for the amortization of premium or discount since the date of purchase. The change in net unrealized gains on available-for-sale debt securities for the nine months ended September 30, 2022 and 2021 wa s $(0.8) million and $(0.9) million, respectively . Prior to the purchases of available-for-sale debt securities in the three months ended June 30, 2022, the Company disposed of all available-for-sale debt securities in the three months ended March 31, 2021 and therefore had no unrealized gain or loss as of September 30, 2021 and no change in net unrealized gains on available-for-sale debt securities for the three months ended September 30, 2021. Any unrealized holding gains or losses on available-for-sale debt securities as of September 30, 2022 are reported as accumulated other comprehensive gain or loss, which is a separate component of stockholders’ equity, net of tax, until realized. The following table reflects the composition of net realized gains or losses for the sales of the available-for-sale securities: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Realized gains (losses): Available-for-sale debt securities: Gains $ — $ — $ — $ 768 Losses — — — (90) Net $ — $ — $ — $ 678 Proceeds from sales $ — $ — $ — $ 7,817 Net realized gains on disposition of available-for-sale debt securities are computed using the specific identification method and are included in the condensed consolidated statements of operations. The following table presents certain information regarding contractual maturities of our available-for-sale debt securities: Maturity September 30, 2022 Amortized Cost % of Total Fair Value % of Total One year or less $ — — % $ — — % After one year through five years 48,399 100 % 47,584 100 % Total $ 48,399 100 % $ 47,584 100 % There were no available-for-sale debt securities with contractual maturities after five years. Expected maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Net unrealized losses on available-for-sale debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows: September 30, 2022 December 31, 2021 Corporate debt securities U.S. Treasury securities Foreign government securities Total Corporate debt securities U.S. Treasury securities Total Less than 12 months Fair value $ 18,179 $ 27,964 $ 1,442 $ 47,585 $ — $ — $ — Unrealized losses $ (308) $ (482) $ (25) $ (815) $ — $ — $ — Greater than 12 months Fair value $ — $ — $ — $ — $ — $ — $ — Unrealized losses $ — $ — $ — $ — $ — $ — $ — Total Fair value $ 18,179 $ 27,964 $ 1,442 $ 47,585 $ — $ — $ — Unrealized losses $ (308) $ (482) $ (25) $ (815) $ — $ — $ — We believe that any unrealized losses on our available-for-sale debt securities at September 30, 2022 are temporary based upon our current analysis of the issuers of the securities that we hold and current market conditions. We have no intent to sell, and it is more likely than not that we will not be required to sell, these securities until the fair value recovers to at least equal our cost basis or the securities mature. As of September 30, 2022, the Company did not have an allowance for credit losses for available-for-sale debt securities. Equity securities The Company disposed of all equity securities in the three months ended March 31, 2021. Mortgage loans The mortgage loan portfolio as of September 30, 2022 is comprised entirely of single-family residential mortgage loans. During the nine months ended September 30, 2022, the Company did not purchase any new mortgage loans. Mortgage loans, which include contractual terms to maturity of thirty years, are not categorized by contractual maturity as borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties. The change in the mortgage loans during the nine months ended September 30, 2022 was the result of principal prepayments and maturities. The cost and estimated fair value of mortgage loans are as follows: September 30, 2022 December 31, 2021 Cost Estimated Fair Value Cost Estimated Fair Value Mortgage loans $ 302 $ 302 $ 2,022 $ 2,022 Total $ 302 $ 302 $ 2,022 $ 2,022 Investment income Investment income from securities consists of the following: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Available-for-sale debt securities $ 428 $ — $ 491 $ 773 Held-to-maturity debt securities 316 543 1,062 1,507 Equity investments — — — (89) Mortgage loans 10 45 51 136 Other 110 — 235 61 Total $ 864 $ 588 $ 1,839 $ 2,388 Accrued interest receivable Accrued interest receivable from investments is included in receivables, net in the condensed consolidated balance sheets. The following table reflects the composition of accrued interest receivable for investments: September 30, 2022 December 31, 2021 Corporate debt securities $ 356 $ 874 U.S. Treasury securities 186 12 Foreign government securities 10 — Accrued interest receivable on investment securities $ 552 $ 886 Mortgage loans — 13 Accrued interest receivable on investments $ 552 $ 899 The Company does not recognize an allowance for credit losses for accrued interest receivable, which is recorded in the receivables line in the condensed consolidated balance sheets, because the Company writes off accrued investment timely. The Company writes off accrued interest receivables after three months by reversing interest income. Fair value measurement ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure financial assets or liabilities at fair value. The observability of inputs is impacted by a number of factors, including the type of asset or liability, characteristics specific to the asset or liability, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are as follows: Level 1 Quoted prices (unadjusted) in active markets for identical asset or liability at the measurement date are used. Level 2 Pricing inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Pricing inputs are unobservable and include situations where there is little, if any, market activity for the asset or liability. The inputs used in determination of fair value require significant judgment and estimation. When fair value inputs fall within different levels of the fair value hierarchy, the level in the fair value hierarchy within which the asset or liability is categorized in its entirety is determined based on the lowest level input that is significant to the asset or liability. Assessing the significance of a particular input to the valuation of an asset or liability in its entirety requires judgment and considers factors specific to the asset or liability. The categorization of an asset or liability within the hierarchy is based upon the pricing transparency of the asset or liability and does not necessarily correspond to the perceived risk of that asset or liability. The following table summarizes the Company’s investments measured at fair value. The Company’s available-for-sale securities in the following table are recorded at fair value on the accompanying condensed consolidated balance sheets. Assets September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Held-to-maturity: Corporate debt securities $ — $ 36,173 $ — $ 36,173 $ — $ 62,330 $ — $ 62,330 U.S. Treasury securities 7,883 — — 7,883 4,833 — — 4,833 Certificate of deposits — 237 — 237 — 237 — 237 Total held-to-maturity debt securities $ 7,883 $ 36,410 $ — $ 44,293 $ 4,833 $ 62,567 $ — $ 67,400 Available-for-sale: Corporate debt securities $ — $ 18,180 $ — $ 18,180 $ — $ — $ — $ — U.S. Treasury securities 27,963 — — 27,963 — — — — Foreign government securities — 1,441 — 1,441 — — — — Total available-for-sale debt securities $ 27,963 $ 19,621 $ — $ 47,584 $ — $ — $ — $ — Mortgage loans $ — $ — $ 302 $ 302 $ — $ — $ 2,022 $ 2,022 Total $ 35,846 $ 56,031 $ 302 $ 92,179 $ 4,833 $ 62,567 $ 2,022 $ 69,422 The Company classifies U.S. Treasury bonds within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets. Corporate debt securities and certificates of deposit are classified within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security which may be actively traded. The Company classifies mortgage loans as Level 3 due to the reliance on significant unobservable valuation inputs. The Company’s liabilities in the following table are recorded at fair value on the accompanying condensed consolidated balance sheets. The following table summarizes the Company’s liabilities measured at fair value: Liabilities September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Public Warrants $ 690 $ — $ — $ 690 $ 10,925 $ — $ — $ 10,925 Private Placement Warrants — 350 — 350 — 5,542 — 5,542 Sponsor Covered Shares — — 312 312 — — 5,415 5,415 Total $ 690 $ 350 $ 312 $ 1,352 $ 10,925 $ 5,542 $ 5,415 $ 21,882 The Company considers the Public Warrants to be Level 1 liabilities due to the use of an observable market quote in an active market under the ticker DOMA.WS. For the Private Placement Warrants, the Company considers the fair value of each Private Placement Warrant to be equivalent to that of each Public Warrant, with an immaterial adjustment for short-term marketability restrictions. As such, the Private Placement Warrants are classified as Level 2. The fair value of the Sponsor Covered Shares was determined using a Monte Carlo simulation valuation model using a distribution of potential stock price outcomes on a daily basis over the original 10-year vesting period. The unobservable significant inputs to the valuation model were as follows: September 30, Current stock price $ 0.44 Expected volatility 75.0 % Risk-free interest rate 3.90 % Current expected term 8.8 Expected dividend yield — % Annual change in control probability 2.0 % The changes for Level 3 items measured at fair value on a recurring basis using significant unobservable inputs are as follows: Sponsor Covered Shares Fair value as of December 31, 2021 $ 5,415 Change in fair value of Sponsor Covered Shares (5,103) Fair value as of September 30, 2022 $ 312 There were no transfers of assets or liabilities between Level 1 and Level 2 during the three or nine months ended September 30, 2022 and the year ended December 31, 2021. There were no transfers involving Level 3 assets or liabilities during the three or nine months ended September 30, 2022 and the year ended December 31, 2021. Cash and cash equivalents, restricted cash, receivables, prepaid expenses and other assets, accounts payable, and accrued expenses and other liabilities approximate fair value and are therefore excluded from the leveling table above. The cost basis is determined to approximate fair value due to the short term duration of these financial instruments. |
Revenue recognition
Revenue recognition | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue recognition | Revenue recognition Disaggregation of revenue Our revenue consists of: Three months ended Nine months ended 2022 2021 2022 2021 Revenue Stream Statements of Operations Classification Segment Total Revenue Revenue from insurance contracts: Direct Agents title insurance premiums Net premiums written Underwriting $ 15,241 $ 32,944 $ 56,982 $ 88,797 Direct Agents title insurance premiums Net premiums written Elimination — (96) — (976) Third-Party Agent title insurance premiums Net premiums written Underwriting 79,247 108,643 242,098 270,933 Total revenue from insurance contracts $ 94,488 $ 141,491 $ 299,080 $ 358,754 Revenue from contracts with customers: Escrow fees Escrow, title-related and other fees Distribution $ 8,581 $ 16,190 $ 30,949 $ 45,325 Other title-related fees and income Escrow, title-related and other fees Distribution 16,197 31,383 58,122 86,181 Other title-related fees and income Escrow, title-related and other fees Underwriting 1,064 823 2,402 2,621 Other title-related fees and income Escrow, title-related and other fees Elimination (1) (13,215) (27,944) (48,367) (75,035) Total revenue from contracts with customers $ 12,627 $ 20,452 $ 43,106 $ 59,092 Other revenue: Interest and investment income (2) Investment, dividend and other income Distribution $ 70 $ 68 $ 145 $ 155 Interest and investment income (2) Investment, dividend and other income Underwriting 790 493 1,707 1,483 Realized gains and losses, net Investment, dividend and other income Distribution (125) (21) (219) (25) Realized gains and losses, net Investment, dividend and other income Underwriting 6 99 (12) 905 Total other revenues $ 741 $ 639 $ 1,621 $ 2,518 Total revenues $ 107,856 $ 162,582 $ 343,807 $ 420,364 _________________ (1) Premiums retained by Direct Agents are recognized as income to the Distribution segment, and expense to the Underwriting segment. Upon consolidation, the impact of these internal segment transactions is eliminated. See Note 7. Segment information for additional breakdown. (2) Interest and investment income consists primarily of interest payments received on held-to-maturity debt securities, available-for-sale debt securities and mortgage loans. |
Liability for loss and loss adj
Liability for loss and loss adjustment expenses | 9 Months Ended |
Sep. 30, 2022 | |
Insurance [Abstract] | |
Liability for loss and loss adjustment expenses | Liability for loss and loss adjustment expenses A summary of the changes in the liability for loss and loss adjustment expenses for the nine months ending September 30, 2022 and 2021 is as follows: September 30, 2022 2021 Balance at the beginning of the year $ 80,267 $ 69,800 Provision for claims related to: Current year $ 18,192 $ 23,567 Prior years (2,606) (6,826) Total provision for claims $ 15,586 $ 16,741 Paid losses related to: Current year $ (2,665) $ (2,832) Prior years (9,397) (5,038) Total paid losses $ (12,062) $ (7,870) Balance at the end of the period $ 83,791 $ 78,671 Provision for claims as a percentage of net written premiums 5.2 % 4.7 % We continually update our liability for loss and loss adjustment expense estimates as new information becomes known, new loss patterns emerge, or as other contributing factors are considered and incorporated into the analysis. Estimating future title loss payments is difficult because of the complex nature of title claims, the long periods of time over which claims are paid, significantly varying dollar amounts of individual claims, and other factors. Current year incurred and paid losses includes current year reported claims as well as estimated future losses on such claims. For the nine months ended September 30, 2022, the prior year’s provision for claims release of $2.6 million is due to reported loss emergence which was lower than expected. Historically, this favorable loss experience has resulted in a decrease in the projection of ultimate loss for past policy years. Most recently, our favorable loss experience resulted in a decrease in the projection of ultimate loss for policy years 2018, 2020, and 2021. For the nine months ended September 30, 2021, the provision for claims reserve release related to prior years of $6.8 million is due to reported loss emergence which was lower than expected. This has resulted in a decrease in the projection of ultimate loss for policy years 2017-2020. The actuarial assumptions underlying the Company’s selected ultimate loss estimates place more consideration on title insurance industry benchmarks for more recent policy years. These title insurance benchmarks are based on industry long-term average loss ratios. As the Company’s claims experience matures, we refine those estimates to put more consideration to the Company’s actual claims experience. For the nine months ended September 30, 2022 and 2021, the Company’s actual claims experience reflects lower loss ratios than industry benchmarks from a current positive underwriting cycle and resulted in the favorable development. The liability for loss and loss adjustment expenses of $83.8 million and $80.3 million, as of September 30, 2022 and December 31, 2021, respectively, includes $0.1 million and $0.1 million, respectively, of reserves for the settlement of claims which the Company has deemed to be directly related to its escrow or agent related activities. The reserves for the settlement of claims related to escrow or agent related activities are not actuarially determined. |
Segment information
Segment information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment information | Segment informationThe Company’s chief operating decision maker reviews financial performance and makes decisions about the allocation of resources for our operations through two reportable segments, (1) Distribution and (2) Underwriting. The Company’s reportable segments offer different products and services that are marketed through different channels for real estate closing transactions. They are managed separately because of the unique technology, service requirements and regulatory environment. A description of each of our reportable segments is as follows. • Distribution: Our Distribution segment reflects our Direct Agents operations of acquiring customer orders and providing title and escrow services for real estate closing transactions. We acquire customers through our partnerships with realtors, attorneys and non-centralized loan originators via a 105-branch footprint across ten states as of September 30, 2022 (“Local”) and our partnerships with national lenders and mortgage originators that maintain centralized lending operations representing our Doma Enterprise accounts (“Doma Enterprise”). • Underwriting: Our Underwriting segment reflects the results of our title insurance underwriting business, including policies referred through our Direct Agents and Third-Party Agents channels. The referring agents typically retain approximately 82% - 84% of the policy premiums in exchange for their services. The retention varies by state and agent. We use adjusted gross profit as the primary profitability measure for making decisions regarding ongoing operations. Adjusted gross profit is calculated by subtracting direct costs, such as premiums retained by agents, direct labor, other direct costs, and provision for claims, from total revenue. Our chief operating decision maker evaluates the results of the aforementioned segments on a pre-tax basis. Segment adjusted gross profit excludes certain items which are included in net loss, such as depreciation and amortization, corporate and other expenses, goodwill impairment, change in the fair value of Warrant and Sponsor Covered Shares liabilities, interest expense, and income tax expense, as these items are not considered by the chief operating decision maker in evaluating the segments’ overall operating performance. Our chief operating decision maker does not review nor consider assets allocated to our segments for the purpose of assessing performance or allocating resources. Accordingly, segments’ assets are not presented. The following table summarizes the operating results of the Company’s reportable segments: Three months ended September 30, 2022 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 94,488 $ — $ 94,488 Escrow, other title-related fees and other (1) 24,778 1,064 (13,215) 12,627 Investment, dividend and other income (55) 796 — 741 Total revenue $ 24,723 $ 96,348 $ (13,215) $ 107,856 Premiums retained by agents (2) $ — $ 78,356 $ (13,215) $ 65,141 Direct labor (3) 17,353 2,867 — 20,220 Other direct costs (4) 3,710 2,514 — 6,224 Provision for claims 737 3,928 — 4,665 Adjusted gross profit $ 2,923 $ 8,683 $ — $ 11,606 Nine months ended September 30, 2022 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 299,080 $ — $ 299,080 Escrow, other title-related fees and other (1) 89,071 2,402 (48,367) 43,106 Investment, dividend and other income (74) 1,695 — 1,621 Total revenue $ 88,997 $ 303,177 $ (48,367) $ 343,807 Premiums retained by agents (2) $ — $ 248,748 $ (48,367) $ 200,381 Direct labor (3) 63,997 7,911 — 71,908 Other direct costs (4) 15,143 7,923 — 23,066 Provision for claims 2,593 12,993 — 15,586 Adjusted gross profit $ 7,264 $ 25,602 $ — $ 32,866 Three months ended September 30, 2021 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 141,587 $ (96) $ 141,491 Escrow, other title-related fees and other (1) 47,573 823 (27,944) 20,452 Investment, dividend and other income 47 592 — 639 Total revenue $ 47,620 $ 143,002 $ (28,040) $ 162,582 Premiums retained by agents (2) $ — $ 119,636 $ (28,040) $ 91,596 Direct labor (3) 21,791 2,157 — 23,948 Other direct costs (4) 5,650 4,423 — 10,073 Provision for claims 1,243 5,442 — 6,685 Adjusted gross profit $ 18,936 $ 11,344 $ — $ 30,280 Nine months ended September 30, 2021 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 359,730 $ (976) $ 358,754 Escrow, other title-related fees and other (1) 131,506 2,621 (75,035) 59,092 Investment, dividend and other income 130 2,388 — 2,518 Total revenue $ 131,636 $ 364,739 $ (76,011) $ 420,364 Premiums retained by agents (2) $ — $ 303,126 $ (76,011) $ 227,115 Direct labor (3) 56,884 5,945 — 62,829 Other direct costs (4) 16,846 7,896 — 24,742 Provision for claims 1,777 14,964 — 16,741 Adjusted gross profit $ 56,129 $ 32,808 $ — $ 88,937 _________________ (1) Includes fee income from closings, escrow, title exams, ceding commission income, as well as premiums retained by Direct Agents. (2) This expense represents a deduction from the net premiums written for the amounts that are retained by Direct Agents and Third-Party Agents as compensation for their efforts to generate premium income for our Underwriting segment. The impact of premiums retained by our Direct Agents and the expense for reinsurance or co-insurance procured on Direct Agent sourced premiums are eliminated in consolidation. (3) Includes all compensation costs, including salaries, bonuses, incentive payments, and benefits, for personnel involved in the direct fulfillment of title and/or escrow services. Direct labor excludes severance costs. (4) Includes title examination expense, office supplies, and premium and other taxes. The following table provides a reconciliation of the Company’s total reportable segments’ adjusted gross profit to its total loss before income taxes: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Adjusted gross profit $ 11,606 $ 30,280 $ 32,866 $ 88,937 Depreciation and amortization 4,251 1,978 11,234 7,705 Corporate and other expenses (1) 54,151 53,393 187,182 133,234 Goodwill impairment 33,746 — 33,746 — Change in fair value of Warrant and Sponsor Covered Shares liabilities (1,438) 4,478 (20,531) 4,478 Interest expense 4,584 4,531 13,280 12,341 Loss before income taxes $ (83,688) $ (34,100) $ (192,045) $ (68,821) _________________ (1) Includes corporate and other costs not allocated to segments including corporate support function costs, such as legal, finance, human resources, technology support and certain other indirect operating expenses, such as sales and management payroll, and incentive related expenses. As of September 30, 2022 and December 31, 2021 the Distribution segment had allocated goodwill of $54.3 million and $88.1 million, respectively, and the Underwriting segment had allocated goodwill of $23.4 million. There were no additions from acquisitions, or adjustments to goodwill resulting from prior year acquisitions in either segment for the three and nine months ended September 30, 2022 and 2021. There was an impairment to goodwill in the Distribution segment of $33.7 million for the three and nine months ended September 30, 2022. There were no impairments to goodwill in the Underwriting segment for the three and nine months ended September 30, 2022. There were no impairments to goodwill in either segment for the three and nine months ended September 30, 2021. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior secured credit agreement On December 31, 2020, Old Doma executed a loan and security agreement with Hudson Structured Capital Management Ltd. (“HSCM”), providing for a $150.0 million senior secured term loan (“Senior Debt”) that was funded by the lenders, which are affiliates of HSCM, on January 29, 2021 (“Funding Date”). The Senior Debt matures five years from the Funding Date. Under the agreement, the Senior Debt will bear interest of 11.25% per annum, 5.0% of which will be paid on a current cash basis and the remainder to accrue and be added to the outstanding principal balance. Interest shall be compounded quarterly. If at any time Old Doma (now known as States Title) is in an event of default under the Senior Debt, outstanding amounts shall bear interest at the default interest rate of 15.00%. Upon funding, Old Doma issued penny warrants to affiliates of HSCM equal to 1.35% of Old Doma’s fully diluted shares. The warrants were net exercised on the Closing Date and such affiliates of HSCM received the right to receive approximately 4.2 million shares of our common stock. The Senior Debt is secured by a first-priority pledge and security interest in substantially all of the assets (tangible and intangible) of our wholly owned subsidiary States Title (which represent substantially all of our assets) and any of its existing and future domestic subsidiaries (in each case, subject to customary exclusions, including the exclusion of regulated insurance company subsidiaries). States Title is subject to customary affirmative, negative and financial covenants, including, among other things, minimum liquidity of $20.0 million (as of the last day of any month), minimum consolidated annual revenue of $130.0 million, limits on the incurrence of indebtedness, restrictions on asset sales outside the ordinary course of business and material acquisitions, limitations on dividends and other restricted payments. States Title was in compliance with the Senior Debt covenants as of September 30, 2022. The Senior Debt also includes customary events of default for facilities of this type and provides that, if an event of default occurs and is continuing, the Senior Debt will amortize requiring regular payments on a straight-line basis over the subsequent 24-month calendar period, but not to extend beyond the maturity date. The estimated fair value of the Senior Debt at September 30, 2022 was $159.9 million. No active or observable market exists for the Senior Debt and, as a result, this is a Level 3 fair value measurement. Therefore, the estimated |
Stock compensation expense
Stock compensation expense | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock compensation expense | Stock compensation expense The Company issued stock options (incentive stock options (“ISOs”) and non-statutory stock options (“NSOs”) and restricted stock awards (“RSAs”) to employees and key advisors under the Company’s 2019 Equity Incentive Plan, which has been approved by the board of directors. Granted stock options do not expire for 10 years and have vesting periods ranging from 7 to 60 months. The holder of one stock option may purchase one share of common stock at the underlying strike price. The Company issues restricted stock units (“RSUs”) and performance restricted stock units (“PRSUs”) under the Omnibus Incentive Plan. The RSUs are subject to time-based vesting, generally with a majority of the RSUs vesting 25% on the first anniversary of the award date and ratably thereafter for twelve quarters, such that the RSUs will be fully vested on the fourth anniversary of their award date. Eligible participants in the PRSUs will receive a number of earned shares based on Company financial results during the performance period, as established by the Company’s board of directors. Earned shares for the PRSUs will fully vest once the continuous employment service condition is met after the performance period. The RSUs and PRSUs are measured at fair market value on the grant date and stock-based compensation expense is recognized as the shares vest with a corresponding offset credited to additional paid-in-capital. In June 2022, the Company issued stock awards to its Chief Executive Officer under the Omnibus Incentive Plan that vest upon the satisfaction of a time-based service condition and a market condition (“market-based awards”). Both the service and the market condition must be satisfied for the award to vest. The market condition of the awards is based on the 90-day volume weighted average price of the common stock of the Company reaching a price hurdle of $5.00, $7.50, and $10.00 during a performance period of 4 years. The maximum number of shares that can be earned under the market-based awards is 2,435,325 shares, with one-third of the total award allocated to each identified average price threshold. The time-based service condition in the market-based awards is satisfied quarterly over sixteen quarters of continuous employment, such that the service condition included in the market-based awards will be fully satisfied on the fourth anniversary of their award date. The Company recognizes compensation expense related to the market-based awards using the accelerated attribution method over the requisite service period. For the three and nine months ended September 30, 2022, a decrease in stock-based compensation expense of $1.2 million and $4.2 million, respectively, was recognized due to changes in the estimated probability of the financial metrics associated with certain PRSUs. Stock-based compensation expense for the three months ended September 30, 2022 and 2021 was $7.7 million and $3.0 million, respectively. Stock-based compensation expense for the nine months ended September 30, 2022 and 2021 was $27.4 million and $9.0 million, respectively. Stock options (ISO and NSO) During the nine months ended September 30, 2022, the Company had the following stock option activity: Number of Stock Options Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Life (In years) Aggregate Intrinsic Value ($) Outstanding as of December 31, 2021 24,255,204 $ 0.51 7.91 $ 109,061 Granted — — 0 Exercised (1,960,728) 0.54 4.19 Cancelled or forfeited (3,213,233) 0.61 2.08 Outstanding as of September 30, 2022 19,081,243 $ 0.58 6.98 $ 198 Options exercisable as of September 30, 2022 13,349,677 $ 0.54 6.64 $ 198 As of September 30, 2022, there was $14.8 million of stock-based compensation expense that had yet to be recognized related to nonvested stock option grants. RSAs, RSUs and PRSUs During the nine months ended September 30, 2022, the Company had the following non-vested RSA, RSU and PRSU activity: Number of RSAs, RSUs and PRSUs Average Grant Date Fair Value ($) Non-vested at December 31, 2021 18,579,930 $ 6.11 Granted 38,084,744 1.90 Vested (3,032,377) 5.65 Adjustment for PRSUs expected to vest (3,172,883) 5.91 Cancelled or Forfeited (14,770,922) 3.70 Non-vested at September 30, 2022 35,688,492 $ 2.67 As of September 30, 2022, there was $87.8 million of stock-based compensation expense that had yet to be recognized related to nonvested RSAs, RSUs and PRSUs. Market-based awards The market-based awards were measured at fair market value on the grant date, and stock-based compensation expense is recognized as the shares vest with a corresponding offset credited to additional paid-in-capital. The fair value of the market-based awards was determined using a Monte Carlo simulation valuation model using a distribution of potential stock price outcomes on a daily basis over the original 4-year vesting period. The unobservable significant inputs to the valuation model at the time of award issuance were as follows: Stock price at issuance $ 0.92 Expected volatility 75.0 % Risk-free interest rate 3.14 % Current expected term 3.9 Expected dividend yield — % During the nine months ended September 30, 2022, the Company had the following non-vested market-based award activity: Number of Market-based awards Average Grant Date Fair Value ($) Non-vested at December 31, 2021 — $ — Granted 2,435,325 0.32 Vested — — Cancelled or Forfeited — — Non-vested at September 30, 2022 2,435,325 $ 0.32 |
Earnings per share
Earnings per share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | Earnings per share The calculation of the basic and diluted EPS is as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Numerator Net loss attributable to Doma Holdings, Inc. $ (84,113) $ (34,270) $ (192,791) $ (69,327) Denominator Weighted-average common shares – basic and diluted 326,820,954 245,003,754 325,207,884 128,105,954 Net loss per share attributable to stockholders Basic and diluted $ (0.26) $ (0.14) $ (0.59) $ (0.54) As we have reported net loss for each of the periods presented, all potentially dilutive securities are antidilutive. The following potential outstanding shares of common stock and contingently issuable shares w ere excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because the contingent criteria has not been satisfied and/or including them would have been antidilutive: As of September 30, 2022 2021 Outstanding stock options 19,081,243 26,283,820 Warrants for common and preferred stock 18,022,750 18,022,750 RSA’s, RSU’s and PRSU’s 35,688,492 938,304 Market-based awards 2,435,325 — Sponsor Covered Shares and Seller Earnout Shares 17,531,270 17,826,268 Total antidilutive securities 92,759,080 63,071,142 |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related party transactions | Related party transactions Equity held by Lennar In connection with the North American Title Acquisition, subsidiaries of Lennar were granted equity in the Company. As of September 30, 2022, Lennar, through its subsidiaries, held 25.1% of the Company on a fully diluted basis. Transactions with Lennar In the routine course of its business, Doma Title Insurance, Inc. (“DTI”) underwrites title insurance policies for a subsidiary of Lennar. The Company recorded the following revenues and premiums retained by Third-Party Agents from these transactions, which are included within our Underwriting segment: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 34,795 $ 30,298 $ 96,126 $ 81,925 Premiums retained by Third-Party Agents 27,932 24,772 77,542 66,606 September 30, 2022 December 31, 2021 Net receivables $ 3,850 $ 3,883 These amounts are included in receivables, net in the Company’s condensed consolidated balance sheets. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Legal matters The Company is subject to claims and litigation matters in the ordinary course of business. Management does not believe the resolution of any such matters will have a materially adverse effect on the Company’s financial position or results of operations. Commitments and other contingencies The Company also administers escrow deposits as a service to customers, a substantial portion of which are held at third-party financial institutions. Thes e escrow deposits amounted to $159.1 million and $204.8 million a t September 30, 2022 and December 31, 2021, respectively. Such deposits are not reflected in the condensed consolidated balance sheets, but the Company could be contingently liable for them under certain circumstances (for example, if the Company disposes of escrowed assets). Such contingent liabilities have not materially impacted the results of operations or financial condition to date and are not expected to do so in the future. |
Accrued expenses and other liab
Accrued expenses and other liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Accrued expenses and other liabilities | Accrued expenses and other liabilities Accrued expenses and other liabilities include the following: September 30, December 31, Employee compensation and benefits $ 23,380 $ 32,756 Other 11,575 21,393 Total accrued expenses and other liabilities $ 34,955 $ 54,149 Workforce reduction plans In the second and third quarter of 2022, the Company executed separate workforce reduction plans (collectively, the “Reduction Plans”) to improve cost efficiency and align with strategic investments in the Doma Intelligence platform. The Reduction Plans in the second and third quarter included the elimination of approximately 561 positions across the Company, or approximately 27% of the Company’s then current workforce. The Company is substantially complete with the Reduction Plans as of September 30, 2022. Liabilities associated with the Reduction Plans are included in accrued expenses and other liabilities in the condensed consolidated balance sheet as of September 30, 2022. The following table summarizes activity related to the liabilities associated with the Reduction Plans: Total Balance as of January 1, 2022 $ — Charges incurred (1) 8,396 Payments and other adjustments (7,829) Balance as of September 30, 2022 $ 567 ________________ (1) Charges incurred include employee benefits, severance, payroll taxes and related facilitation costs offset by forfeitures of bonus. In the nine months ended September 30, 2022, forfeited stock-based compensation associated with the Reduction Plans was $1.9 million. |
Employee benefit plan
Employee benefit plan | 9 Months Ended |
Sep. 30, 2022 | |
Retirement Benefits [Abstract] | |
Employee benefit plan | Employee benefit plan The Company sponsors a defined contribution 401(k) plan for its employees (the “Retirement Savings Plan”). The Retirement Savings Plan is a voluntary contributory plan under which employees may elect to defer compensation for federal income tax purposes under Section 401(k) of the Internal Revenue Code of 1986. All full-time employees age 18+ are eligible to enroll in the Retirement Savings Plan on their first day of employment. Company matching contributions begin upon employee enrollment in the Retirement Savings Plan. Prior to January 1, 2022, the Company provided an employer match up to 50% of the first 6% of elective contributions, and there were no matching contributions in excess of 3% of compensation. Effective January 1, 2022, the Company provides an employer match up to 100% on the first 1% of elective contributions and 50% on the next 5% of elective contributions. The maximum matching contribution is 3.5% of compensation. For the three months ended September 30, 2022 and 2021, the Company made contributions for the benefit of employees of $1.3 million and $0.7 million, respectively, to the Retirement Savings Plan. For the nine months ended September 30, 2022 and 2021, the Company made contributions for the benefit of employees of $3.6 million and $2.0 million to the Retirement Savings Plan. |
Research and development
Research and development | 9 Months Ended |
Sep. 30, 2022 | |
Research and Development [Abstract] | |
Research and development | Research and development For the three and nine months ended September 30, 2022 and 2021, the Company recorded the following related to research and development expenses and capitalized internally developed software costs: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Research and development expenses incurred $ 3,660 $ 5,402 $ 14,781 $ 10,849 Capitalized internally developed software costs 8,393 5,347 25,603 14,157 Research and development spend, inclusive of capitalized internally developed software cost $ 12,053 $ 10,749 $ 40,384 $ 25,006 Our research and development costs reflect certain payroll-related costs of employees directly associated with such activities and certain software subscription costs, which are included in personnel costs on the condensed consolidated statements of operations. Capitalized internally developed software and acquired software costs are included in fixed assets, net in the condensed consolidated balance sheets. |
Warrant liabilities
Warrant liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Other Liabilities Disclosure [Abstract] | |
Warrant liabilities | Warrant liabilities As a result of the Business Combination, the Company assumed, as of the Closing Date, Public Warrants to purchase an aggregate of 11,500,000 shares of our common stock and Private Placement Warrants to purchase an aggregate of 5,833,333 shares of our common stock. Each whole Warrant entitles the holder to purchase one share of common stock at a price of $11.50. The Warrants became exercisable commencing on December 4, 2021, which is one year from the closing of the initial public offering of Capitol; provided, that we maintain an effective registration statement under the Securities Act of 1934, as amended (the “Securities Act”), covering our common stock. Redemption of Public Warrants when the price per share of our common stock equals or exceeds $18.00 The Company may call the Public Warrants for redemption: • in whole and not in part; • at a price of $0.01 per Public Warrant; • upon not less than 30 days’ prior written notice of redemption to each Public Warrant holder; and • if, and only if, the last reported sale price of our common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of common stock and equity-linked securities as described above) for any 20 trading days within a 30-trading day period ending three business days before the Company sends to the notice of redemption to the Public Warrant holders. The Company will not redeem the Public Warrants as described above unless a registration statement under the Securities Act covering the issuance of the shares of common stock issuable upon a cashless exercise of the Public Warrants is then effective and a current prospectus relating to those shares of common stock is available throughout the 30-day redemption period, except if the Public Warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. Redemption of Public Warrants when the price per share of our common stock equals or exceeds $10.00 The Company may redeem the outstanding Public Warrants: • in whole and not in part; • at $0.10 per Public Warrant upon a minimum of 30 days’ prior written notice of redemption; provided that holders will be able to exercise their Public Warrants prior to redemption and receive a number of shares based on the redemption date and the “fair market value” of common stock except as otherwise described below; • if, and only if, the last reported sale price of our common stock equals or exceeds $10.00 per share (as adjusted per stock splits, stock dividends, reorganizations, reclassifications, recapitalizations and the like and for certain issuances of common stock and equity-linked securities as described above) on the trading day prior to the date on which the Company sends the notice of redemption to the Public Warrant holders; and • if, and only if, the last reported sale price of common stock is less than $18.00 per share (as adjusted for stock for stock splits, stock dividends, reorganizations, recapitalizations and the like and for certain issuances of common stock and equity-linked securities), the Private Placement Warrants are also concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above. Beginning on the date the notice of redemption is given until the Public Warrants are redeemed or exercised, holders may elect to exercise their Public Warrants on a cashless basis. The “fair market value” of our common stock will mean the volume-weighted average price of our common stock for the ten Public Warrants be exercisable in connection with this redemption feature for more than 0.361 shares of common stock per Public Warrant (subject to adjustment). The Private Placement Warrants are identical to the Public Warrants except that the Private Placement Warrants, (i) subject to limited exceptions, are not redeemable by us, (ii) may be exercised for cash or on a cashless basis and (iii) are entitled to registration rights (including the shares of our common stock issuable upon exercise of the Private Placement Warrants), in each case, so long as they are held by the initial purchasers or any of their permitted transferees (as further described in the warrant agreement, dated as of December 1, 2020, between the Company and Continental Stock Transfer & Trust Company, a New York corporation, as warrant agent (the “Warrant Agreement”). If the Private Placement Warrants are held by holders other than the initial purchasers or any of their permitted transferees, they will be redeemable by us and exercisable by the holders on the same basis as the Public Warrants. On September 3, 2021, the Company filed a Registration Statement on Form S-1 (No. 333-258942), as amended, with the SEC (which was declared effective on September 8, 2021; and the Company subsequently filed a post-effective amendment thereto, which was declared effective on March 30, 2022), which related to, among other things, the issuance of an aggregate of up to 17,333,333 shares of common stock issuable upon the exercise of the Warrants. As of September 30, 2022, the aggregate values of the Public and Private Warrants were $0.7 million and $0.4 million, respectively, representing Warrants outstanding to purchase 11,500,000 shares and 5,833,333 shares , respectively, of our common stock. As of December 31, 2021, the aggregate values of the Public and Private Warrants were $10.9 million and $5.5 million, respectively, representing Warrants outstanding to purchase 11,500,000 shares and 5,833,333 shares , respectively, of our common stock. The Warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities in the condensed consolidated balance sheets. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of Warrants and Sponsor Covered Shares liabilities |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company has operating leases consisting of office space and office equipment. Lease terms and options vary in the Company's operating leases dependent upon the underlying leased asset. We exclude options to extend or terminate a lease from our recognition as part of our right-of-use assets and lease liabilities until those options are known and/or executed, as we typically do not exercise options to purchase the underlying leased asset. As of September 30, 2022, we have leases with remaining terms of 1 month to 7.0 years, some of which may include no options for renewal and others with options to extend the lease terms from 1 year to 5 years. The components of our operating leases were as follows: Nine months ended September 30, 2022 Components of lease expense: Operating lease expense $ 9,097 Less sublease income (250) Net lease expense 8,847 Cash flow information related to leases: Operating cash outflow from operating leases during the nine months ended September 30, 2022 $ 8,174 September 30, 2022 Right-of-use assets obtained during the nine months ended September 30, 2022 in exchange for new operating lease liabilities $ 9,857 Weighted average remaining lease term 4.19 years Weighted average discount rate 10 % Maturities of lease liabilities: September 30, 2022 2022 $ 2,614 2023 9,719 2024 8,272 2025 6,066 2026 4,585 Thereafter 4,462 Total lease payments 35,718 Less imputed interest (6,629) Lease liabilities $ 29,089 |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent eventsIn the preparation of the accompanying condensed consolidated financial statements, the Company has evaluated all material subsequent events or transactions that occurred after the balance sheet date through the date on which the financial statements were issued for potential recognition or disclosure in the Company's financial statements, noting no subsequent events or transactions that require disclosure. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying condensed consolidated balance sheet as of September 30, 2022 and the condensed consolidated statements of operations, condensed consolidated statements of comprehensive loss, and condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the financial information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments necessary for the fair presentation of the Company’s balance sheet as of September 30, 2022 and its results of operations, including its comprehensive loss, and stockholders’ equity for the three and nine months ended September 30, 2022 and 2021 and cash flows for the nine months ended September 30, 2022 and 2021. All adjustments are of a normal recurring nature. The results for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for any subsequent quarter or for the fiscal year ending December 31, 2022. These unaudited interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements and related notes. References to the Accounting Standard Codification (“ASC”) and Accounting Standard Updates (“ASU”) included hereinafter refer to the Accounting Standards Codification and Updates issued by the Financial Accounting Standards Board (“FASB”) as the source of authoritative U.S. GAAP. The accompanying condensed consolidated financial statements include the accounts of the Company and the accounts of the Company’s wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from the estimates made by management. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized prospectively. Significant items subject to such estimates and assumptions include, but are not limited to, reserves for incurred but not reported claims, the useful lives of property and equipment, accrued net premiums written from Third-Party Agent (as defined in Item 2) referrals, fair value measurements, valuation of goodwill and the valuations of stock-based compensation arrangements and the Sponsor Covered Shares liability (as defined below). |
Title plants | Title plantsTitle plants are carried at cost, with costs incurred to maintain, update and operate title plants expensed as incurred. Because properly maintained title plants have indefinite lives and do not diminish in value with the passage of time, no provision has been made for depreciation or amortization. The Company analyzes the title plants for impairment when events or circumstances indicate that the carrying amount may not be recoverable. This analysis includes, but is not limited to, the effects of obsolescence, duplication, demand and other economic factors. |
Goodwill | Goodwill Goodwill represents the excess of the acquisition price over the fair value of assets acquired and liabilities assumed in a business combination. Goodwill is assigned to one or more reporting units on the date of acquisition. We review our goodwill for impairment annually on October 1 of each year and between annual tests if events or circumstances arise that would more likely than not reduce the fair value of any one of our reporting units below its respective carrying amount. In performing our annual goodwill impairment test, we first perform a qualitative assessment, which requires that we consider macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, changes in the Company’s stock price, changes in management or key personnel, changes in strategy, changes in customers, changes in the composition or carrying amount of a reporting unit or other factors that have the potential to impact fair value. If, after assessing the totality of events and circumstances, we determine that it is more likely than not that the fair values of our reporting units are greater than the carrying amounts, then the quantitative goodwill impairment test is not performed. If the fair value of the reporting unit is less than its carrying amount, a non-cash impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, with the loss not exceeding the total amount of goodwill allocated to that reporting unit. Any impairment is charged to operations in the period that the impairment is identified. |
Reinsurance | Reinsurance The Company utilizes excess of loss and quota share reinsurance programs to limit its maximum loss exposure by reinsuring certain risks with other insurers. The Company has two reinsurance treaties: the Excess of Loss Treaty and the Quota Share Treaty. Under the Excess of Loss Treaty, we cede liability over $15.0 million on all files. Excess of loss reinsurance coverage protects the Company from a large loss from a single loss occurrence. The Excess of Loss Treaty provides for ceding liability above the retention of $15.0 million for all policies up to a liability cap of $500.0 million. Under the Quota Share Treaty, during the period from January 1, 2021 to February 23, 2021 the Company ceded 100% of the written premium on its instantly underwriting policies. Effective February 24, 2021, the Company cedes 25% of the written premium on our instantly underwritten policies. Payments and recoveries on reinsured losses for the Company’s title insurance business were immaterial during the three and nine months ended September 30, 2022 and 2021. Ceding commission from reinsurance transactions are presented as revenue within the “Escrow, other title-related fees and other” revenue line item in the consolidated statements of operations. |
Income taxes | Income taxes Our effective tax rate for the nine months ended September 30, 2022 and 2021 was (1)% as a result of a full valuation allowance recorded against the deferred tax assets. In determining the realizability of the net U.S. federal and state deferred tax assets, we consider numerous factors including historical profitability, estimated future taxable income, prudent and feasible tax planning strategies, and the industry in which we operate. As of September 30, 2022 and December 31, 2021, the Company carried a valuation allowance against deferred tax assets as management believes it is more likely than not that the benefit of the net deferred tax assets covered by that valuation allowance will not be realized. A net deferred tax liability has been recorded as of September 30, 2022 and December 31, 2021 o f $2.0 million and $1.8 million, respectively, and is included in accrued expenses and other liabilities within the accompanying condensed consolidated balance sheets. Management reassesses the realization of the deferred tax assets each reporting period. The Company has approximatel y $0.2 million of |
Leases | Leases The Company determines if a contract contains a lease at inception of the contract. The Company's inventory of leases primarily consists of operating office space and office equipment leases which are recorded as a lease obligation liability and as a lease right-of-use asset on the accompanying condensed consolidated balance sheet. The lease right-of-use asset represents the Company's right to use each underlying asset for the lease term and the lease obligation liability represents the Company's obligation over the lease term. The Company's lease obligation is recorded at the present value of the lease payments based on the term of the lease. The Company applies an incremental borrowing rate of interest as of the effective date of adoption or the lease effective date equivalent to a collateralized borrowing rate with similar terms. The discount rate used to calculate the present value of our future |
Concentration of credit risk | Concentration of credit risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions and our investment portfolio. The Company has not experienced losses on the cash accounts and management believes the Company is not exposed to significant risks on such accounts. Additionally, we manage the exposure to credit risk in our investment portfolio by investing in high quality securities and diversifying our holdings. Our investment portfolio is comprised of corporate debt, certificates of deposit, single-family residential mortgage loans, and U.S. Treasuries. |
Recently issued and adopted accounting pronouncements and recently issued but not adopted accounting pronouncements | Recently issued and adopted accounting pronouncements In June 2016, the FASB issued ASU No. 2016-13 Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The amendments in this and the related ASUs introduce broad changes to accounting for credit impairment of financial instruments. The primary updates include the introduction of a new current expected credit loss (“CECL”) model that is based on expected rather than incurred losses for instruments measured at amortized cost and amends the accounting for impairment of held-to-maturity securities and available-for-sale securities. This model incorporates past experience, current conditions and reasonable and supportable forecasts affecting collectability of these instruments. The amendments in this update are effective for public entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. For all other entities, the amendment is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The early adoption of this new guidance on January 1, 2022 required the Company to record an allowance for credit losses for the Company’s held-to-maturity investment portfolio, which resulted in an allowance of $0.4 million and a corresponding $0.4 million adjustment for the cumulative effect of a change in accounting principle, net of income taxes. For more information on the held-to-maturity allowance for credit losses, refer to Note 4 of this Quarterly Report. Prior to the adoption of the new guidance, the Company utilized an aging model to estimate credit losses on accounts receivable. As this aging model is allowed under the new guidance, there is no impact to the Company’s allowance for credit losses for accounts receivable. The adoption of this new standard did not have a significant impact on the condensed consolidated statements of operations or the condensed consolidated statements of cash flows. The guidance also requires additional disclosures regarding the Company’s held-to-maturity allowance for credit losses, which have been included within Note 4. In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which provides guidance for accounting for leases. ASU 2016-02 requires lessees to classify leases as either finance or operating leases and to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of the lease classification. The lease classification will determine whether the lease expense is recognized based on an effective interest rate method or on a straight-line basis over the term of the lease. Modified or new leases subsequent to the effective date will follow ASC 2016-02. Accounting for lessors remains largely unchanged from current U.S. GAAP. Under ASU 2020-05, the effective date for adoption of ASU 2016-02 is fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. We early adopted this new guidance on January 1, 2022 under a modified retrospective transition approach using the cumulative-effect adjustment transition method approved by the FASB, which results in reporting for the comparative periods presented in accordance with the previous lease guidance under ASC 840. We elected the package of practical expedients but did not adopt the hindsight practical expedient as of January 1, 2022. The package of practical expedients allowed the Company not to reassess whether the arrangement contains a lease, lease classification and whether previously capitalized costs qualify as initial direct costs. The practical expedients allowed the Company to continue classifying all of its leases as operating leases as they were previously classified under ASC 840. The Company recognized lease liabilities of $24.4 million and corresponding right-of-use assets of $23.8 million in our consolidated balance sheet on January 1, 2022. The difference between the lease liabilities and corresponding right-of-use assets related to prepaid rent and deferred lease obligations recognized in prepaid expenses, deposits and other assets and accrued expenses and other liabilities, respectively, in our consolidated balance sheet on January 1, 2022, resulting in no cumulative-effect adjustment to opening equity. The new standard did not have a significant impact on the condensed consolidated statements of operations or the condensed consolidated statements of cash flows. The guidance also requires additional disclosures regarding the Company’s lease portfolio, which have been included within Note 17. In January 2020, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes (Topic 740). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. Specifically, ASU 2019-12 eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 is effective for annual periods beginning after December 15, 2020, and interim periods beginning after December 15, 2020. ASU 2019-12 is effective for private entities for annual periods beginning after December 15, 2021, and interim periods beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU 2019-12 under the private company transition guidance beginning January 1, 2022, and the adoption of this standard did not have a material impact on the Company’s condensed consolidated financial statements or disclosures given the Company has a full valuation allowance and the scenarios for which the guidance offer simplification are not significant for the Company. Recently issued but not adopted accounting pronouncements In August 2018, the FASB issued ASU 2018-12, Financial Services-Insurance (Topic 944), Targeted Improvements to the Accounting for Long-Duration Contracts, effective for fiscal years beginning after December 15, 2022 including interim periods within those fiscal years. In June of 2020, the FASB deferred the effective date of ASU 2018-12 for one-year in response to implementation challenges resulting from COVID-19. This update requires insurance companies to annually review and update the assumptions used for measuring the liability under long-duration contracts. The amendments in this ASU may be early adopted as of the beginning of an annual reporting period for which financial statements have not yet been issued, including interim financial statements. We do not currently expect to early adopt this standard. Although we have long-duration contracts, this specific guidance is not expected to impact our title insurance operations; therefore, we do not expect this standard to have a material impact on our condensed consolidated financial statements. |
Fair value measurement | Fair value measurement ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure financial assets or liabilities at fair value. The observability of inputs is impacted by a number of factors, including the type of asset or liability, characteristics specific to the asset or liability, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are as follows: Level 1 Quoted prices (unadjusted) in active markets for identical asset or liability at the measurement date are used. Level 2 Pricing inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Pricing inputs are unobservable and include situations where there is little, if any, market activity for the asset or liability. The inputs used in determination of fair value require significant judgment and estimation. When fair value inputs fall within different levels of the fair value hierarchy, the level in the fair value hierarchy within which the asset or liability is categorized in its entirety is determined based on the lowest level input that is significant to the asset or liability. Assessing the significance of a particular input to the valuation of an asset or liability in its entirety requires judgment and considers factors specific to the asset or liability. The categorization of an asset or liability within the hierarchy is based upon the pricing transparency of the asset or liability and does not necessarily correspond to the perceived risk of that asset or liability. |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Gross Earned and Ceded Premiums | Gross premiums earned and ceded premiums are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross premiums earned 94,889 142,995 301,638 363,650 Ceded premiums (401) (1,504) (2,558) (4,896) Net premiums earned 94,488 141,491 299,080 358,754 Percentage of amount assumed to net 99.6 % 98.9 % 99.2 % 98.7 % |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Reverse Recapitalization [Abstract] | |
Schedule of Goodwill | The changes in the carrying value of goodwill, by segment, were as follows: Distribution Underwriting Total Beginning balance, January 1, 2022 $ 88,074 $ 23,413 $ 111,487 Impairment losses (33,746) — (33,746) Ending balance, September 30, 2022 $ 54,328 $ 23,413 $ 77,741 |
Investments and fair value me_2
Investments and fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments, All Other Investments [Abstract] | |
Summary of Held-to-Maturity Debt Securities | The cost basis, fair values and gross unrealized gains and losses of our held-to-maturity debt securities are as follows: September 30, 2022 December 31, 2021 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities (1) $ 38,258 $ 4 $ (2,089) $ 36,173 $ 62,078 $ 459 $ (207) $ 62,330 U.S. Treasury securities 8,070 — (187) 7,883 4,849 — (16) 4,833 Certificates of deposit 237 — — 237 237 — — 237 Total $ 46,565 $ 4 $ (2,276) $ 44,293 $ 67,164 $ 459 $ (223) $ 67,400 _______________ (1) Includes both U.S. and foreign corporate debt securities. Net unrealized losses on held-to-maturity debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows: September 30, 2022 December 31, 2021 Corporate debt securities U.S. Treasury securities Total Corporate debt securities U.S. Treasury securities Total Less than 12 months Fair value $ 31,606 $ 6,455 $ 38,061 $ 18,309 $ 4,667 $ 22,976 Unrealized losses $ (1,638) $ (163) $ (1,801) $ (192) $ (16) $ (208) Greater than 12 months Fair value $ 3,316 $ 1,428 $ 4,744 $ 605 $ — $ 605 Unrealized losses $ (451) $ (24) $ (475) $ (15) $ — $ (15) Total Fair value $ 34,922 $ 7,883 $ 42,805 $ 18,914 $ 4,667 $ 23,581 Unrealized losses $ (2,089) $ (187) $ (2,276) $ (207) $ (16) $ (223) |
Summary of Investments by Maturity Date | The following table presents certain information regarding contractual maturities of our held-to-maturity debt securities: Maturity September 30, 2022 Amortized Cost % of Total Fair Value % of Total One year or less $ 22,688 49 % $ 22,356 50 % After one year through five years 23,877 51 % 21,937 50 % Total $ 46,565 100 % $ 44,293 100 % |
Summary of Held to Maturity Debt Securities Allowance for Credit Loss | The calculated allowance is recorded as an offset to held-to-maturity debt securities in the condensed consolidated balance sheets and in the investment, dividend and other income line on the condensed consolidated statements of operations. Rollforward of Credit Loss Allowance for Held-to-Maturity Debt Securities Beginning balance, January 1, 2022 $ 399 Current-period provision for expected credit losses 34 Write-off charged against the allowance, if any — Recoveries of amounts previously written off, if any — Ending balance of the allowance for credit losses, September 30, 2022 $ 433 |
Summary of Available-for-Sale Debt Securities | The cost basis, fair values and gross unrealized gains and losses of our available-for-sale debt securities are as follows: September 30, 2022 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities (1) $ 18,488 $ — $ (308) $ 18,180 U.S. Treasury securities 28,445 — (482) 27,963 Foreign government securities 1,466 — (25) 1,441 Total $ 48,399 $ — $ (815) $ 47,584 _______________ (1) Includes both U.S. and foreign corporate debt securities. Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Realized gains (losses): Available-for-sale debt securities: Gains $ — $ — $ — $ 768 Losses — — — (90) Net $ — $ — $ — $ 678 Proceeds from sales $ — $ — $ — $ 7,817 The following table presents certain information regarding contractual maturities of our available-for-sale debt securities: Maturity September 30, 2022 Amortized Cost % of Total Fair Value % of Total One year or less $ — — % $ — — % After one year through five years 48,399 100 % 47,584 100 % Total $ 48,399 100 % $ 47,584 100 % Net unrealized losses on available-for-sale debt securities and the fair value of the related securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows: September 30, 2022 December 31, 2021 Corporate debt securities U.S. Treasury securities Foreign government securities Total Corporate debt securities U.S. Treasury securities Total Less than 12 months Fair value $ 18,179 $ 27,964 $ 1,442 $ 47,585 $ — $ — $ — Unrealized losses $ (308) $ (482) $ (25) $ (815) $ — $ — $ — Greater than 12 months Fair value $ — $ — $ — $ — $ — $ — $ — Unrealized losses $ — $ — $ — $ — $ — $ — $ — Total Fair value $ 18,179 $ 27,964 $ 1,442 $ 47,585 $ — $ — $ — Unrealized losses $ (308) $ (482) $ (25) $ (815) $ — $ — $ — |
Schedule of Cost and Estimated Fair Value of Mortgage Loans and Accrued Interest Receivable | The cost and estimated fair value of mortgage loans are as follows: September 30, 2022 December 31, 2021 Cost Estimated Fair Value Cost Estimated Fair Value Mortgage loans $ 302 $ 302 $ 2,022 $ 2,022 Total $ 302 $ 302 $ 2,022 $ 2,022 Accrued interest receivable from investments is included in receivables, net in the condensed consolidated balance sheets. The following table reflects the composition of accrued interest receivable for investments: September 30, 2022 December 31, 2021 Corporate debt securities $ 356 $ 874 U.S. Treasury securities 186 12 Foreign government securities 10 — Accrued interest receivable on investment securities $ 552 $ 886 Mortgage loans — 13 Accrued interest receivable on investments $ 552 $ 899 |
Schedule of Investment Income | Investment income from securities consists of the following: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Available-for-sale debt securities $ 428 $ — $ 491 $ 773 Held-to-maturity debt securities 316 543 1,062 1,507 Equity investments — — — (89) Mortgage loans 10 45 51 136 Other 110 — 235 61 Total $ 864 $ 588 $ 1,839 $ 2,388 |
Summary of Company's Assets Measured at Fair Value | The following table summarizes the Company’s investments measured at fair value. The Company’s available-for-sale securities in the following table are recorded at fair value on the accompanying condensed consolidated balance sheets. Assets September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Held-to-maturity: Corporate debt securities $ — $ 36,173 $ — $ 36,173 $ — $ 62,330 $ — $ 62,330 U.S. Treasury securities 7,883 — — 7,883 4,833 — — 4,833 Certificate of deposits — 237 — 237 — 237 — 237 Total held-to-maturity debt securities $ 7,883 $ 36,410 $ — $ 44,293 $ 4,833 $ 62,567 $ — $ 67,400 Available-for-sale: Corporate debt securities $ — $ 18,180 $ — $ 18,180 $ — $ — $ — $ — U.S. Treasury securities 27,963 — — 27,963 — — — — Foreign government securities — 1,441 — 1,441 — — — — Total available-for-sale debt securities $ 27,963 $ 19,621 $ — $ 47,584 $ — $ — $ — $ — Mortgage loans $ — $ — $ 302 $ 302 $ — $ — $ 2,022 $ 2,022 Total $ 35,846 $ 56,031 $ 302 $ 92,179 $ 4,833 $ 62,567 $ 2,022 $ 69,422 |
Summary of Company's Liabilities Measured at Fair Value | The Company’s liabilities in the following table are recorded at fair value on the accompanying condensed consolidated balance sheets. The following table summarizes the Company’s liabilities measured at fair value: Liabilities September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Public Warrants $ 690 $ — $ — $ 690 $ 10,925 $ — $ — $ 10,925 Private Placement Warrants — 350 — 350 — 5,542 — 5,542 Sponsor Covered Shares — — 312 312 — — 5,415 5,415 Total $ 690 $ 350 $ 312 $ 1,352 $ 10,925 $ 5,542 $ 5,415 $ 21,882 |
Summary of the Fair Values of the Sponsor Earnout Shares Using a Monte Carlo Simulation Valuation Model | The fair value of the Sponsor Covered Shares was determined using a Monte Carlo simulation valuation model using a distribution of potential stock price outcomes on a daily basis over the original 10-year vesting period. The unobservable significant inputs to the valuation model were as follows: September 30, Current stock price $ 0.44 Expected volatility 75.0 % Risk-free interest rate 3.90 % Current expected term 8.8 Expected dividend yield — % Annual change in control probability 2.0 % |
Summary of Changes for Level 3 Items Measured at Fair Value | The changes for Level 3 items measured at fair value on a recurring basis using significant unobservable inputs are as follows: Sponsor Covered Shares Fair value as of December 31, 2021 $ 5,415 Change in fair value of Sponsor Covered Shares (5,103) Fair value as of September 30, 2022 $ 312 |
Revenue recognition (Tables)
Revenue recognition (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenue | Our revenue consists of: Three months ended Nine months ended 2022 2021 2022 2021 Revenue Stream Statements of Operations Classification Segment Total Revenue Revenue from insurance contracts: Direct Agents title insurance premiums Net premiums written Underwriting $ 15,241 $ 32,944 $ 56,982 $ 88,797 Direct Agents title insurance premiums Net premiums written Elimination — (96) — (976) Third-Party Agent title insurance premiums Net premiums written Underwriting 79,247 108,643 242,098 270,933 Total revenue from insurance contracts $ 94,488 $ 141,491 $ 299,080 $ 358,754 Revenue from contracts with customers: Escrow fees Escrow, title-related and other fees Distribution $ 8,581 $ 16,190 $ 30,949 $ 45,325 Other title-related fees and income Escrow, title-related and other fees Distribution 16,197 31,383 58,122 86,181 Other title-related fees and income Escrow, title-related and other fees Underwriting 1,064 823 2,402 2,621 Other title-related fees and income Escrow, title-related and other fees Elimination (1) (13,215) (27,944) (48,367) (75,035) Total revenue from contracts with customers $ 12,627 $ 20,452 $ 43,106 $ 59,092 Other revenue: Interest and investment income (2) Investment, dividend and other income Distribution $ 70 $ 68 $ 145 $ 155 Interest and investment income (2) Investment, dividend and other income Underwriting 790 493 1,707 1,483 Realized gains and losses, net Investment, dividend and other income Distribution (125) (21) (219) (25) Realized gains and losses, net Investment, dividend and other income Underwriting 6 99 (12) 905 Total other revenues $ 741 $ 639 $ 1,621 $ 2,518 Total revenues $ 107,856 $ 162,582 $ 343,807 $ 420,364 _________________ (1) Premiums retained by Direct Agents are recognized as income to the Distribution segment, and expense to the Underwriting segment. Upon consolidation, the impact of these internal segment transactions is eliminated. See Note 7. Segment information for additional breakdown. (2) Interest and investment income consists primarily of interest payments received on held-to-maturity debt securities, available-for-sale debt securities and mortgage loans. |
Liability for loss and loss a_2
Liability for loss and loss adjustment expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Insurance [Abstract] | |
Summary of Liability for Loss and Loss Adjustment Expenses | A summary of the changes in the liability for loss and loss adjustment expenses for the nine months ending September 30, 2022 and 2021 is as follows: September 30, 2022 2021 Balance at the beginning of the year $ 80,267 $ 69,800 Provision for claims related to: Current year $ 18,192 $ 23,567 Prior years (2,606) (6,826) Total provision for claims $ 15,586 $ 16,741 Paid losses related to: Current year $ (2,665) $ (2,832) Prior years (9,397) (5,038) Total paid losses $ (12,062) $ (7,870) Balance at the end of the period $ 83,791 $ 78,671 Provision for claims as a percentage of net written premiums 5.2 % 4.7 % |
Segment information (Tables)
Segment information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Summary of Operating Results of the Company's Reportable Segments | The following table summarizes the operating results of the Company’s reportable segments: Three months ended September 30, 2022 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 94,488 $ — $ 94,488 Escrow, other title-related fees and other (1) 24,778 1,064 (13,215) 12,627 Investment, dividend and other income (55) 796 — 741 Total revenue $ 24,723 $ 96,348 $ (13,215) $ 107,856 Premiums retained by agents (2) $ — $ 78,356 $ (13,215) $ 65,141 Direct labor (3) 17,353 2,867 — 20,220 Other direct costs (4) 3,710 2,514 — 6,224 Provision for claims 737 3,928 — 4,665 Adjusted gross profit $ 2,923 $ 8,683 $ — $ 11,606 Nine months ended September 30, 2022 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 299,080 $ — $ 299,080 Escrow, other title-related fees and other (1) 89,071 2,402 (48,367) 43,106 Investment, dividend and other income (74) 1,695 — 1,621 Total revenue $ 88,997 $ 303,177 $ (48,367) $ 343,807 Premiums retained by agents (2) $ — $ 248,748 $ (48,367) $ 200,381 Direct labor (3) 63,997 7,911 — 71,908 Other direct costs (4) 15,143 7,923 — 23,066 Provision for claims 2,593 12,993 — 15,586 Adjusted gross profit $ 7,264 $ 25,602 $ — $ 32,866 Three months ended September 30, 2021 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 141,587 $ (96) $ 141,491 Escrow, other title-related fees and other (1) 47,573 823 (27,944) 20,452 Investment, dividend and other income 47 592 — 639 Total revenue $ 47,620 $ 143,002 $ (28,040) $ 162,582 Premiums retained by agents (2) $ — $ 119,636 $ (28,040) $ 91,596 Direct labor (3) 21,791 2,157 — 23,948 Other direct costs (4) 5,650 4,423 — 10,073 Provision for claims 1,243 5,442 — 6,685 Adjusted gross profit $ 18,936 $ 11,344 $ — $ 30,280 Nine months ended September 30, 2021 Distribution Underwriting Eliminations Consolidated total Net premiums written $ — $ 359,730 $ (976) $ 358,754 Escrow, other title-related fees and other (1) 131,506 2,621 (75,035) 59,092 Investment, dividend and other income 130 2,388 — 2,518 Total revenue $ 131,636 $ 364,739 $ (76,011) $ 420,364 Premiums retained by agents (2) $ — $ 303,126 $ (76,011) $ 227,115 Direct labor (3) 56,884 5,945 — 62,829 Other direct costs (4) 16,846 7,896 — 24,742 Provision for claims 1,777 14,964 — 16,741 Adjusted gross profit $ 56,129 $ 32,808 $ — $ 88,937 _________________ (1) Includes fee income from closings, escrow, title exams, ceding commission income, as well as premiums retained by Direct Agents. (2) This expense represents a deduction from the net premiums written for the amounts that are retained by Direct Agents and Third-Party Agents as compensation for their efforts to generate premium income for our Underwriting segment. The impact of premiums retained by our Direct Agents and the expense for reinsurance or co-insurance procured on Direct Agent sourced premiums are eliminated in consolidation. (3) Includes all compensation costs, including salaries, bonuses, incentive payments, and benefits, for personnel involved in the direct fulfillment of title and/or escrow services. Direct labor excludes severance costs. (4) Includes title examination expense, office supplies, and premium and other taxes. |
Reconciliation of Company's Total Reportable Segments' Adjusted Gross Profit to Total Loss Before Income Taxes | The following table provides a reconciliation of the Company’s total reportable segments’ adjusted gross profit to its total loss before income taxes: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Adjusted gross profit $ 11,606 $ 30,280 $ 32,866 $ 88,937 Depreciation and amortization 4,251 1,978 11,234 7,705 Corporate and other expenses (1) 54,151 53,393 187,182 133,234 Goodwill impairment 33,746 — 33,746 — Change in fair value of Warrant and Sponsor Covered Shares liabilities (1,438) 4,478 (20,531) 4,478 Interest expense 4,584 4,531 13,280 12,341 Loss before income taxes $ (83,688) $ (34,100) $ (192,045) $ (68,821) _________________ (1) Includes corporate and other costs not allocated to segments including corporate support function costs, such as legal, finance, human resources, technology support and certain other indirect operating expenses, such as sales and management payroll, and incentive related expenses. |
Stock compensation expense (Tab
Stock compensation expense (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock Option Activity | During the nine months ended September 30, 2022, the Company had the following stock option activity: Number of Stock Options Weighted Average Exercise Price ($) Weighted Average Remaining Contractual Life (In years) Aggregate Intrinsic Value ($) Outstanding as of December 31, 2021 24,255,204 $ 0.51 7.91 $ 109,061 Granted — — 0 Exercised (1,960,728) 0.54 4.19 Cancelled or forfeited (3,213,233) 0.61 2.08 Outstanding as of September 30, 2022 19,081,243 $ 0.58 6.98 $ 198 Options exercisable as of September 30, 2022 13,349,677 $ 0.54 6.64 $ 198 |
Summary of Nonvested RSA, RSU and PRSU & Market-based Award Activity | During the nine months ended September 30, 2022, the Company had the following non-vested RSA, RSU and PRSU activity: Number of RSAs, RSUs and PRSUs Average Grant Date Fair Value ($) Non-vested at December 31, 2021 18,579,930 $ 6.11 Granted 38,084,744 1.90 Vested (3,032,377) 5.65 Adjustment for PRSUs expected to vest (3,172,883) 5.91 Cancelled or Forfeited (14,770,922) 3.70 Non-vested at September 30, 2022 35,688,492 $ 2.67 During the nine months ended September 30, 2022, the Company had the following non-vested market-based award activity: Number of Market-based awards Average Grant Date Fair Value ($) Non-vested at December 31, 2021 — $ — Granted 2,435,325 0.32 Vested — — Cancelled or Forfeited — — Non-vested at September 30, 2022 2,435,325 $ 0.32 |
Summary of Share-Based Payment Award, Valuation Assumptions | The fair value of the market-based awards was determined using a Monte Carlo simulation valuation model using a distribution of potential stock price outcomes on a daily basis over the original 4-year vesting period. The unobservable significant inputs to the valuation model at the time of award issuance were as follows: Stock price at issuance $ 0.92 Expected volatility 75.0 % Risk-free interest rate 3.14 % Current expected term 3.9 Expected dividend yield — % |
Earnings per share (Tables)
Earnings per share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings Per Share | The calculation of the basic and diluted EPS is as follows: Three months ended September 30, Nine months ended September 30, 2022 2021 2022 2021 Numerator Net loss attributable to Doma Holdings, Inc. $ (84,113) $ (34,270) $ (192,791) $ (69,327) Denominator Weighted-average common shares – basic and diluted 326,820,954 245,003,754 325,207,884 128,105,954 Net loss per share attributable to stockholders Basic and diluted $ (0.26) $ (0.14) $ (0.59) $ (0.54) |
Schedule of Antidilutive Securities Excluded from Computation | The following potential outstanding shares of common stock and contingently issuable shares w ere excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because the contingent criteria has not been satisfied and/or including them would have been antidilutive: As of September 30, 2022 2021 Outstanding stock options 19,081,243 26,283,820 Warrants for common and preferred stock 18,022,750 18,022,750 RSA’s, RSU’s and PRSU’s 35,688,492 938,304 Market-based awards 2,435,325 — Sponsor Covered Shares and Seller Earnout Shares 17,531,270 17,826,268 Total antidilutive securities 92,759,080 63,071,142 |
Related party transactions (Tab
Related party transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | The Company recorded the following revenues and premiums retained by Third-Party Agents from these transactions, which are included within our Underwriting segment: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Revenues $ 34,795 $ 30,298 $ 96,126 $ 81,925 Premiums retained by Third-Party Agents 27,932 24,772 77,542 66,606 September 30, 2022 December 31, 2021 Net receivables $ 3,850 $ 3,883 |
Accrued expenses and other li_2
Accrued expenses and other liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities include the following: September 30, December 31, Employee compensation and benefits $ 23,380 $ 32,756 Other 11,575 21,393 Total accrued expenses and other liabilities $ 34,955 $ 54,149 |
Schedule of Liabilities Associated With Reduction Plans | The following table summarizes activity related to the liabilities associated with the Reduction Plans: Total Balance as of January 1, 2022 $ — Charges incurred (1) 8,396 Payments and other adjustments (7,829) Balance as of September 30, 2022 $ 567 ________________ |
Research and development (Table
Research and development (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Research and Development [Abstract] | |
Summary of Research and Development Expenses | For the three and nine months ended September 30, 2022 and 2021, the Company recorded the following related to research and development expenses and capitalized internally developed software costs: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Research and development expenses incurred $ 3,660 $ 5,402 $ 14,781 $ 10,849 Capitalized internally developed software costs 8,393 5,347 25,603 14,157 Research and development spend, inclusive of capitalized internally developed software cost $ 12,053 $ 10,749 $ 40,384 $ 25,006 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Summary of Lease Cost | The components of our operating leases were as follows: Nine months ended September 30, 2022 Components of lease expense: Operating lease expense $ 9,097 Less sublease income (250) Net lease expense 8,847 Cash flow information related to leases: Operating cash outflow from operating leases during the nine months ended September 30, 2022 $ 8,174 September 30, 2022 Right-of-use assets obtained during the nine months ended September 30, 2022 in exchange for new operating lease liabilities $ 9,857 Weighted average remaining lease term 4.19 years Weighted average discount rate 10 % |
Summary of Operating Lease Maturities | Maturities of lease liabilities: September 30, 2022 2022 $ 2,614 2023 9,719 2024 8,272 2025 6,066 2026 4,585 Thereafter 4,462 Total lease payments 35,718 Less imputed interest (6,629) Lease liabilities $ 29,089 |
Organization and business ope_2
Organization and business operations (Details) | 9 Months Ended |
Sep. 30, 2022 segment state | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states operated in | state | 45 |
Number of reportable segments | segment | 2 |
Summary of significant accoun_4
Summary of significant accounting policies - Title Plants (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Title Plant | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Impairment of title plants | $ 0 | $ 0 | $ 0 | $ 0 |
Summary of significant accoun_5
Summary of significant accounting policies - Reinsurance (Details) $ in Millions | 2 Months Ended | 9 Months Ended | |
Feb. 24, 2021 | Feb. 23, 2021 | Sep. 30, 2022 USD ($) treaty | |
Reinsurance Retention Policy [Line Items] | |||
Number of reinsurance treaties | treaty | 2 | ||
Reinsurance Policy, Type [Axis]: Excess of Loss Treaty | |||
Reinsurance Retention Policy [Line Items] | |||
Amount retained | $ 15 | ||
Maximum amount reinsured | $ 500 | ||
Reinsurance Policy, Type [Axis]: Quota Share Treaty | |||
Reinsurance Retention Policy [Line Items] | |||
Reinsured percentage | 25% | 100% |
Summary of significant accoun_6
Summary of significant accounting policies - Schedule of gross premiums written and ceded premiums (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reinsurance Retention Policy [Line Items] | ||||
Gross premiums earned | $ 94,889 | $ 142,995 | $ 301,638 | $ 363,650 |
Ceded premiums | (401) | (1,504) | (2,558) | (4,896) |
Net premiums earned | $ 94,488 | $ 141,491 | $ 299,080 | $ 358,754 |
Premiums Earned, Net | Product Concentration Risk | Amount Assumed To Net Premiums | ||||
Reinsurance Retention Policy [Line Items] | ||||
Concentration risk percent | 99.60% | 98.90% | 99.20% | 98.70% |
Summary of significant accoun_7
Summary of significant accounting policies - Income Taxes (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Effective tax rate | (1.00%) | (1.00%) | |
Operating loss carryforwards, subject to expiration | $ 0.2 | ||
Accrued Liabilities and Other Liabilities | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net deferred tax liability | $ 2 | $ 1.8 |
Summary of significant accoun_8
Summary of significant accounting policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Equity | $ (185,192) | $ (262,279) | $ (311,981) | $ (350,924) | $ (381,873) | $ (177,626) | $ (197,662) | $ (188,031) | |
Lease liabilities | 29,089 | ||||||||
Lease right-of-use assets | 27,636 | ||||||||
Accumulated Deficit | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Equity | $ 385,369 | $ 301,256 | $ 242,604 | 192,179 | $ 148,450 | $ 114,180 | $ 90,881 | $ 79,123 | |
Accounting Standards Update 2016-13 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit loss | $ 400 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Equity | 399 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Accumulated Deficit | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Equity | $ 399 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | Accumulated Deficit | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Equity | 400 | ||||||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-02 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Lease liabilities | 24,400 | ||||||||
Lease right-of-use assets | $ 23,800 |
Business Combination - Capitol
Business Combination - Capitol Business Combination (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | ||||||
Jul. 28, 2021 USD ($) tranche $ / shares shares | Jul. 27, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 $ / shares shares | Sep. 03, 2021 shares | Dec. 04, 2020 $ / shares shares | |
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Cash acquired through reverse recapitalization | $ | $ 345,000 | ||||||
Common stock redeemed | $ | 294,900 | ||||||
Net proceeds from Business Combination and PIPE Investment | $ | $ 20,100 | $ 0 | $ 624,952 | ||||
Number of shares issued in transaction (in shares) | 30,000,000 | ||||||
Sale price per share (in usd per share) | $ / shares | $ 10 | ||||||
Purchase price | $ | $ 300,000 | ||||||
Common stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Recapitalization exchange ratio | 5.994933 | ||||||
Transaction costs | $ | $ 67,000 | ||||||
Common stock, shares outstanding (in shares) | 321,461,822 | 327,872,190 | 323,347,806 | ||||
Common stock, shares authorized (in shares) | 2,000,000,000 | 2,000,000,000 | |||||
Preferred stock, shares authorized (in shares) | 100,000,000 | ||||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.0001 | ||||||
Common stock, shares issued (in shares) | 327,872,190 | 323,347,806 | |||||
Preferred stock, shares issued (in shares) | 0 | ||||||
Preferred stock, shares outstanding (in shares) | 0 | ||||||
Number of warrants (in shares) | 17,333,333 | ||||||
Capitol | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Transaction costs | $ | $ 12,100 | ||||||
Public Warrants | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Number of warrants (in shares) | 11,500,000 | 11,500,000 | 11,500,000 | ||||
Number of shares called by each warrant (in shares) | 1 | ||||||
Exercise price of warrants (in usd per share) | $ / shares | $ 11.50 | ||||||
Private Placement Warrants | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Number of warrants (in shares) | 5,833,333 | 5,833,333 | 5,833,333 | ||||
Number of shares called by each warrant (in shares) | 1 | ||||||
Exercise price of warrants (in usd per share) | $ / shares | $ 11.50 | ||||||
Sponsor Covered Shares | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Common stock, shares outstanding (in shares) | 13,256.64 | ||||||
Percentage of shares subject to vesting | 20% | ||||||
Number of vesting tranches | tranche | 2 | ||||||
Period threshold for change in control | 10 years | ||||||
Sponsor Covered Shares | Sale price of common stock equals or exceeds $15 | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Percentage of vesting shares | 50% | ||||||
Stock price trigger (in usd per share) | $ / shares | $ 15 | ||||||
Trading days threshold | 20 days | ||||||
Consecutive trading days threshold | 30 days | ||||||
Sponsor Covered Shares | Sale price of common stock equals or exceeds $17.50 | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Percentage of vesting shares | 50% | ||||||
Stock price trigger (in usd per share) | $ / shares | $ 17.50 | ||||||
Trading days threshold | 20 days | ||||||
Consecutive trading days threshold | 30 days | ||||||
Earnout Shares | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Number of vesting tranches | tranche | 2 | ||||||
Additional shares receivable | 5% | ||||||
Earnout Shares | Sale price of common stock equals or exceeds $15 | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Percentage of vesting shares | 50% | ||||||
Stock price trigger (in usd per share) | $ / shares | $ 15 | ||||||
Trading days threshold | 20 days | ||||||
Consecutive trading days threshold | 30 days | ||||||
Earnout Shares | Sale price of common stock equals or exceeds $17.50 | |||||||
Schedule Of Reverse Recapitalization [Line Items] | |||||||
Percentage of vesting shares | 50% | ||||||
Stock price trigger (in usd per share) | $ / shares | $ 17.50 | ||||||
Trading days threshold | 20 days | ||||||
Consecutive trading days threshold | 30 days |
Business Combination - North Am
Business Combination - North American Title Acquisition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Jan. 07, 2019 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 77,741 | $ 77,741 | $ 111,487 | |||
Goodwill impairment | 33,746 | $ 0 | 33,746 | $ 0 | ||
Accumulated impairment losses to goodwill | $ 33,700 | $ 33,700 | ||||
North American Title Acquisition | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred | $ 171,700 | |||||
Goodwill | 111,500 | |||||
North American Title Acquisition | Notes Payable, Related Party | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred, seller financing notes | $ 87,000 |
Business Combination - Goodwill
Business Combination - Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill [Roll Forward] | ||||
Beginning balance, January 1, 2022 | $ 111,487,000 | |||
Goodwill impairment | $ (33,746,000) | $ 0 | (33,746,000) | $ 0 |
Ending balance, September 30, 2022 | 77,741,000 | 77,741,000 | ||
Distribution | ||||
Goodwill [Roll Forward] | ||||
Beginning balance, January 1, 2022 | 88,074,000 | |||
Goodwill impairment | (33,700,000) | 0 | (33,746,000) | 0 |
Ending balance, September 30, 2022 | 54,328,000 | 54,328,000 | ||
Underwriting | ||||
Goodwill [Roll Forward] | ||||
Beginning balance, January 1, 2022 | 23,413,000 | |||
Goodwill impairment | 0 | $ 0 | 0 | $ 0 |
Ending balance, September 30, 2022 | $ 23,413,000 | $ 23,413,000 |
Investments and fair value me_3
Investments and fair value measurements - Summary of Held-to-Maturity Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 46,565 | $ 67,164 |
Unrealized Gains | 4 | 459 |
Unrealized Losses | (2,276) | (223) |
Fair Value | 44,293 | 67,400 |
Corporate debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 38,258 | 62,078 |
Unrealized Gains | 4 | 459 |
Unrealized Losses | (2,089) | (207) |
Fair Value | 36,173 | 62,330 |
U.S. Treasury securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 8,070 | 4,849 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (187) | (16) |
Fair Value | 7,883 | 4,833 |
Certificates of deposit | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 237 | 237 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | $ 237 | $ 237 |
Investments and fair value me_4
Investments and fair value measurements - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Investments, All Other Investments [Abstract] | ||||
Debt securities, held-to-maturity, restricted | $ 4,400,000 | $ 4,200,000 | ||
Change in net unrealized gains (losses) on held-to-maturity debt | (2,500,000) | $ (300,000) | ||
Change in net unrealized gains on available-for-sale debt securities | $ 0 | $ (800,000) | $ (900,000) |
Investments and fair value me_5
Investments and fair value measurements - Summary of Held-to-Maturity Debt Securities Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
One year or less | $ 22,688 | |
After one year through five years | 23,877 | |
Amortized Cost | $ 46,565 | $ 67,164 |
Amortized Cost, Percent of Total | ||
One year or less | 49% | |
After one year through five years | 51% | |
Total | 100% | |
Fair Value | ||
One year or less | $ 22,356 | |
After one year through five years | 21,937 | |
Fair Value | $ 44,293 | $ 67,400 |
Fair Value, Percent of Total | ||
One year or less | 50% | |
After one year through five years | 50% | |
Total | 100% |
Investments and fair value me_6
Investments and fair value measurements - Schedule of Unrealized Loss on Held-to-Maturity Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Corporate debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
HTM, Less than 12 months, Fair value | $ 31,606 | $ 18,309 |
HTM, Less than 12 months, Unrealized losses | (1,638) | (192) |
HTM, Greater than 12 months, Fair value | 3,316 | 605 |
HTM, Greater than 12 months, Unrealized losses | (451) | (15) |
HTM, Fair value | 34,922 | 18,914 |
HTM, Unrealized losses | (2,089) | (207) |
U.S. Treasury securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
HTM, Less than 12 months, Fair value | 6,455 | 4,667 |
HTM, Less than 12 months, Unrealized losses | (163) | (16) |
HTM, Greater than 12 months, Fair value | 1,428 | 0 |
HTM, Greater than 12 months, Unrealized losses | (24) | 0 |
HTM, Fair value | 7,883 | 4,667 |
HTM, Unrealized losses | (187) | (16) |
Certificates of deposit | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
HTM, Less than 12 months, Fair value | 38,061 | 22,976 |
HTM, Less than 12 months, Unrealized losses | (1,801) | (208) |
HTM, Greater than 12 months, Fair value | 4,744 | 605 |
HTM, Greater than 12 months, Unrealized losses | (475) | (15) |
HTM, Fair value | 42,805 | 23,581 |
HTM, Unrealized losses | $ (2,276) | $ (223) |
Investments and fair value me_7
Investments and fair value measurements - Debt Securities Held to Maturity Allowance for Credit Loss (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Rollforward of Credit Loss Allowance for Held-to-Maturity Debt Securities | |
Beginning balance, January 1, 2022 | $ 0 |
Current-period provision for expected credit losses | 34 |
Write-off charged against the allowance, if any | 0 |
Recoveries of amounts previously written off, if any | 0 |
Ending balance of the allowance for credit losses, September 30, 2022 | 433 |
Cumulative Effect, Period of Adoption, Adjusted Balance | |
Rollforward of Credit Loss Allowance for Held-to-Maturity Debt Securities | |
Beginning balance, January 1, 2022 | $ 399 |
Investments and fair value me_8
Investments and fair value measurements - Summary of Available-for-Sale Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 48,399 | $ 0 |
Unrealized Gains | 0 | |
Unrealized Losses | (815) | |
Fair Value | 47,584 | $ 0 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 18,488 | |
Unrealized Gains | 0 | |
Unrealized Losses | (308) | |
Fair Value | 18,180 | |
U.S. Treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 28,445 | |
Unrealized Gains | 0 | |
Unrealized Losses | (482) | |
Fair Value | 27,963 | |
Foreign government securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 1,466 | |
Unrealized Gains | 0 | |
Unrealized Losses | (25) | |
Fair Value | $ 1,441 |
Investments and fair value me_9
Investments and fair value measurements - Summary of Realized Gains (Losses) on Available-for-Sale Debt Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Available-for-sale debt securities: | ||||
Gains | $ 0 | $ 0 | $ 0 | $ 768 |
Losses | 0 | 0 | 0 | (90) |
Net | 0 | 0 | 0 | 678 |
Proceeds from sales | $ 0 | $ 0 | $ 0 | $ 7,817 |
Investments and fair value m_10
Investments and fair value measurements - Summary of Available-for-Sale Debt Securities Maturity (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Amortized Cost | |
One year or less | $ 0 |
After one year through five years | 48,399 |
Total | $ 48,399 |
Amortized Cost, Percent of Total | |
One year or less | 0% |
After one year through five years | 100% |
Total | 100% |
Fair Value | |
One year or less | $ 0 |
After one year through five years | 47,584 |
Total | $ 47,584 |
Fair Value, Percent of Total | |
One year or less | 0% |
After one year through five years | 100% |
Total | 100% |
Investments and fair value m_11
Investments and fair value measurements - Available-for-sale Debt Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt securities, Available-for-sale securities, less than 12 months, fair value | $ 47,585 | $ 0 |
Debt securities, available-for-sale, less than 12 months, unrealized loss | (815) | 0 |
Debt securities, available-for-sale, Greater than 12 months, fair value | 0 | 0 |
Debt securities, available-for-sale, Greater than 12 months, unrealized losses | 0 | 0 |
Debt securities, available-for-sale, fair value | 47,585 | 0 |
Debt securities, available-for-sale, unrealized losses | (815) | 0 |
Corporate debt securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt securities, Available-for-sale securities, less than 12 months, fair value | 18,179 | 0 |
Debt securities, available-for-sale, less than 12 months, unrealized loss | (308) | 0 |
Debt securities, available-for-sale, Greater than 12 months, fair value | 0 | 0 |
Debt securities, available-for-sale, Greater than 12 months, unrealized losses | 0 | 0 |
Debt securities, available-for-sale, fair value | 18,179 | 0 |
Debt securities, available-for-sale, unrealized losses | (308) | 0 |
U.S. Treasury securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt securities, Available-for-sale securities, less than 12 months, fair value | 27,964 | 0 |
Debt securities, available-for-sale, less than 12 months, unrealized loss | (482) | 0 |
Debt securities, available-for-sale, Greater than 12 months, fair value | 0 | 0 |
Debt securities, available-for-sale, Greater than 12 months, unrealized losses | 0 | 0 |
Debt securities, available-for-sale, fair value | 27,964 | 0 |
Debt securities, available-for-sale, unrealized losses | (482) | $ 0 |
Foreign government securities | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Debt securities, Available-for-sale securities, less than 12 months, fair value | 1,442 | |
Debt securities, available-for-sale, less than 12 months, unrealized loss | (25) | |
Debt securities, available-for-sale, Greater than 12 months, fair value | 0 | |
Debt securities, available-for-sale, Greater than 12 months, unrealized losses | 0 | |
Debt securities, available-for-sale, fair value | 1,442 | |
Debt securities, available-for-sale, unrealized losses | $ (25) |
Investments and fair value m_12
Investments and fair value measurements - Summary of Mortgage Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Net Investment Income [Line Items] | ||
Mortgage loans | $ 302 | $ 2,022 |
Cost | ||
Net Investment Income [Line Items] | ||
Mortgage loans | 302 | 2,022 |
Estimated Fair Value | ||
Net Investment Income [Line Items] | ||
Mortgage loans | $ 302 | $ 2,022 |
Investments and fair value m_13
Investments and fair value measurements - Schedule of Investment Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net Investment Income [Line Items] | ||||
Interest and investment income | $ 864 | $ 588 | $ 1,839 | $ 2,388 |
Available-for-sale debt securities | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | 428 | 0 | 491 | 773 |
Held-to-maturity debt securities | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | 316 | 543 | 1,062 | 1,507 |
Equity investments | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | 0 | 0 | 0 | (89) |
Mortgage loans | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | 10 | 45 | 51 | 136 |
Other | ||||
Net Investment Income [Line Items] | ||||
Interest and investment income | $ 110 | $ 0 | $ 235 | $ 61 |
Investments and fair value m_14
Investments and fair value measurements - Summary of Accrued Interest (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | $ 552 | $ 899 |
Accrued interest receivable on investment securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | 552 | 886 |
Corporate debt securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | 356 | 874 |
U.S. Treasury securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | 186 | 12 |
Foreign government securities | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | 10 | 0 |
Mortgage loans | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Accrued interest receivable on investments | $ 0 | $ 13 |
Investments and fair value m_15
Investments and fair value measurements - Summary of Company's Investments Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | $ 44,293 | $ 67,400 |
Total available-for-sale debt securities | 47,584 | 0 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 36,173 | 62,330 |
Total available-for-sale debt securities | 18,180 | |
U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 7,883 | 4,833 |
Total available-for-sale debt securities | 27,963 | |
Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 237 | 237 |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 44,293 | 67,400 |
Total available-for-sale debt securities | 47,584 | 0 |
Mortgage loans | 302 | 2,022 |
Total | 92,179 | 69,422 |
Fair Value, Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 36,173 | 62,330 |
Total available-for-sale debt securities | 18,180 | 0 |
Fair Value, Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 7,883 | 4,833 |
Total available-for-sale debt securities | 27,963 | 0 |
Fair Value, Recurring | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 237 | 237 |
Total available-for-sale debt securities | 1,441 | 0 |
Level 1 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 7,883 | 4,833 |
Total available-for-sale debt securities | 27,963 | 0 |
Mortgage loans | 0 | 0 |
Total | 35,846 | 4,833 |
Level 1 | Fair Value, Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 0 | 0 |
Total available-for-sale debt securities | 0 | 0 |
Level 1 | Fair Value, Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 7,883 | 4,833 |
Total available-for-sale debt securities | 27,963 | 0 |
Level 1 | Fair Value, Recurring | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 0 | 0 |
Total available-for-sale debt securities | 0 | 0 |
Level 2 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 36,410 | 62,567 |
Total available-for-sale debt securities | 19,621 | 0 |
Mortgage loans | 0 | 0 |
Total | 56,031 | 62,567 |
Level 2 | Fair Value, Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 36,173 | 62,330 |
Total available-for-sale debt securities | 18,180 | 0 |
Level 2 | Fair Value, Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 0 | 0 |
Total available-for-sale debt securities | 0 | 0 |
Level 2 | Fair Value, Recurring | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 237 | 237 |
Total available-for-sale debt securities | 1,441 | 0 |
Level 3 | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 0 | 0 |
Total available-for-sale debt securities | 0 | 0 |
Mortgage loans | 302 | 2,022 |
Total | 302 | 2,022 |
Level 3 | Fair Value, Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 0 | 0 |
Total available-for-sale debt securities | 0 | 0 |
Level 3 | Fair Value, Recurring | U.S. Treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 0 | 0 |
Total available-for-sale debt securities | 0 | 0 |
Level 3 | Fair Value, Recurring | Certificates of deposit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total held-to-maturity debt securities | 0 | 0 |
Total available-for-sale debt securities | $ 0 | $ 0 |
Investments and fair value m_16
Investments and fair value measurements - Summary of Company's Liabilities Measured at Fair Value (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 1,352 | $ 21,882 |
Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 690 | 10,925 |
Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 350 | 5,542 |
Sponsor Covered Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 312 | 5,415 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 690 | 10,925 |
Level 1 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 690 | 10,925 |
Level 1 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 1 | Sponsor Covered Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 350 | 5,542 |
Level 2 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 2 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 350 | 5,542 |
Level 2 | Sponsor Covered Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 312 | 5,415 |
Level 3 | Public Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 3 | Private Placement Warrants | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | 0 | 0 |
Level 3 | Sponsor Covered Shares | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liability | $ 312 | $ 5,415 |
Investments and fair value m_17
Investments and fair value measurements - Summary of Fair Values of the Sponsor Earnout Shares Using a Monte Carlo Simulation Valuation Model (Details) | Sep. 30, 2022 yr $ / shares |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Share price (in usd per share) | $ / shares | $ 0.92 |
Sponsor Covered Shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Share price (in usd per share) | $ / shares | $ 0.44 |
Vesting Period | Sponsor Covered Shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | yr | 10 |
Expected volatility | Sponsor Covered Shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 0.750 |
Risk-free interest rate | Sponsor Covered Shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 0.0390 |
Current expected term | Sponsor Covered Shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | yr | 8.8 |
Expected dividend yield | Sponsor Covered Shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 0 |
Annual change in control probability | Sponsor Covered Shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative, measurement input | 0.020 |
Investments and fair value m_18
Investments and fair value measurements - Changes for Level 3 Items Measured at Fair Value (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value as of December 31, 2021 | $ 5,415 |
Change in fair value of Sponsor Covered Shares | (5,103) |
Fair value as of September 30, 2022 | $ 312 |
Revenue recognition (Details)
Revenue recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | [1] | $ 94,488 | $ 141,491 | $ 299,080 | $ 358,754 |
Escrow, title-related and other fees | 12,627 | 20,452 | 43,106 | 59,092 | |
Total other revenues | 741 | 639 | 1,621 | 2,518 | |
Total revenues | 107,856 | 162,582 | 343,807 | 420,364 | |
Eliminations | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 0 | (96) | 0 | (976) | |
Escrow, title-related and other fees | (13,215) | (27,944) | (48,367) | (75,035) | |
Total other revenues | 0 | 0 | 0 | 0 | |
Total revenues | (13,215) | (28,040) | (48,367) | (76,011) | |
Underwriting | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 94,488 | 141,587 | 299,080 | 359,730 | |
Escrow, title-related and other fees | 1,064 | 823 | 2,402 | 2,621 | |
Interest and investment income | 790 | 493 | 1,707 | 1,483 | |
Realized gains and losses, net | 6 | 99 | (12) | 905 | |
Total other revenues | 796 | 592 | 1,695 | 2,388 | |
Total revenues | 96,348 | 143,002 | 303,177 | 364,739 | |
Distribution | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 0 | 0 | 0 | 0 | |
Escrow, title-related and other fees | 24,778 | 47,573 | 89,071 | 131,506 | |
Interest and investment income | 70 | 68 | 145 | 155 | |
Realized gains and losses, net | (125) | (21) | (219) | (25) | |
Total other revenues | (55) | 47 | (74) | 130 | |
Total revenues | 24,723 | 47,620 | 88,997 | 131,636 | |
Direct Agents title insurance premiums | Eliminations | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 0 | (96) | 0 | (976) | |
Direct Agents title insurance premiums | Underwriting | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 15,241 | 32,944 | 56,982 | 88,797 | |
Third-Party Agent title insurance premiums | Underwriting | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Net premiums written | 79,247 | 108,643 | 242,098 | 270,933 | |
Escrow fees | Distribution | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Escrow, title-related and other fees | 8,581 | 16,190 | 30,949 | 45,325 | |
Other title-related fees and income | Eliminations | |||||
Disaggregation of Revenue [Line Items] | |||||
Escrow, title-related and other fees | (13,215) | (27,944) | (48,367) | (75,035) | |
Other title-related fees and income | Underwriting | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Escrow, title-related and other fees | 1,064 | 823 | 2,402 | 2,621 | |
Other title-related fees and income | Distribution | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Escrow, title-related and other fees | $ 16,197 | $ 31,383 | $ 58,122 | $ 86,181 | |
[1]Net premiums written includes revenues from a related party of $34.8 million and $30.3 million during the three months ended September 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $96.1 million and $81.9 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11). |
Liability for loss and loss a_3
Liability for loss and loss adjustment expenses - Summary of Liability for Loss and Loss Adjustment Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||
Balance at the beginning of the year | $ 80,267 | $ 69,800 | ||
Provision for claims related to: | ||||
Current year | 18,192 | 23,567 | ||
Prior years | (2,606) | (6,826) | ||
Total provision for claims | $ 4,665 | $ 6,685 | 15,586 | 16,741 |
Paid losses related to: | ||||
Current year | (2,665) | (2,832) | ||
Prior years | (9,397) | (5,038) | ||
Total paid losses | (12,062) | (7,870) | ||
Balance at the end of the period | $ 83,791 | $ 78,671 | $ 83,791 | $ 78,671 |
Provision for Incurred Claims Concentration Risk | Premiums Written, Net | Liability for Unpaid Claims and Claims Adjustment Expense, Net | ||||
Paid losses related to: | ||||
Concentration risk percent | 5.20% | 4.70% |
Liability for loss and loss a_4
Liability for loss and loss adjustment expenses - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Insurance [Abstract] | ||||
Prior year reserve release | $ 2,606 | $ 6,826 | ||
Liability for loss and loss adjustment expenses | 83,791 | $ 78,671 | $ 80,267 | $ 69,800 |
Reserves for settlement related to escrow or agent activities | $ 100 | $ 100 |
Segment information - Narrative
Segment information - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) state | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) state branch segment | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Number of states operated in | state | 45 | 45 | |||
Goodwill | $ 77,741,000 | $ 77,741,000 | $ 111,487,000 | ||
Acquired goodwill | 0 | $ 0 | 0 | $ 0 | |
Goodwill adjustments | 0 | 0 | 0 | 0 | |
Goodwill impairment | $ 33,746,000 | 0 | $ 33,746,000 | 0 | |
Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Number of branches | branch | 105 | ||||
Number of states operated in | state | 10 | 10 | |||
Goodwill | $ 54,328,000 | $ 54,328,000 | 88,074,000 | ||
Goodwill impairment | 33,700,000 | 0 | 33,746,000 | 0 | |
Underwriting | |||||
Segment Reporting Information [Line Items] | |||||
Goodwill | 23,413,000 | 23,413,000 | $ 23,413,000 | ||
Goodwill impairment | $ 0 | $ 0 | $ 0 | $ 0 | |
Underwriting | Minimum | |||||
Segment Reporting Information [Line Items] | |||||
Premium percentage retained | 82% | ||||
Underwriting | Maximum | |||||
Segment Reporting Information [Line Items] | |||||
Premium percentage retained | 84% |
Segment information - Summary o
Segment information - Summary of Operating Results by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Segment Reporting Information [Line Items] | |||||
Net premiums written | [1] | $ 94,488 | $ 141,491 | $ 299,080 | $ 358,754 |
Escrow, other title-related fees and other | 12,627 | 20,452 | 43,106 | 59,092 | |
Investment, dividend and other income | 741 | 639 | 1,621 | 2,518 | |
Total revenues | 107,856 | 162,582 | 343,807 | 420,364 | |
Premiums retained by agents | [2] | 65,141 | 91,596 | 200,381 | 227,115 |
Direct labor | 20,220 | 23,948 | 71,908 | 62,829 | |
Other direct costs | 6,224 | 10,073 | 23,066 | 24,742 | |
Provision for claims | 4,665 | 6,685 | 15,586 | 16,741 | |
Adjusted gross profit | 11,606 | 30,280 | 32,866 | 88,937 | |
Operating Segments | Distribution | |||||
Segment Reporting Information [Line Items] | |||||
Net premiums written | 0 | 0 | 0 | 0 | |
Escrow, other title-related fees and other | 24,778 | 47,573 | 89,071 | 131,506 | |
Investment, dividend and other income | (55) | 47 | (74) | 130 | |
Total revenues | 24,723 | 47,620 | 88,997 | 131,636 | |
Premiums retained by agents | 0 | 0 | 0 | 0 | |
Direct labor | 17,353 | 21,791 | 63,997 | 56,884 | |
Other direct costs | 3,710 | 5,650 | 15,143 | 16,846 | |
Provision for claims | 737 | 1,243 | 2,593 | 1,777 | |
Adjusted gross profit | 2,923 | 18,936 | 7,264 | 56,129 | |
Operating Segments | Underwriting | |||||
Segment Reporting Information [Line Items] | |||||
Net premiums written | 94,488 | 141,587 | 299,080 | 359,730 | |
Escrow, other title-related fees and other | 1,064 | 823 | 2,402 | 2,621 | |
Investment, dividend and other income | 796 | 592 | 1,695 | 2,388 | |
Total revenues | 96,348 | 143,002 | 303,177 | 364,739 | |
Premiums retained by agents | 78,356 | 119,636 | 248,748 | 303,126 | |
Direct labor | 2,867 | 2,157 | 7,911 | 5,945 | |
Other direct costs | 2,514 | 4,423 | 7,923 | 7,896 | |
Provision for claims | 3,928 | 5,442 | 12,993 | 14,964 | |
Adjusted gross profit | 8,683 | 11,344 | 25,602 | 32,808 | |
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net premiums written | 0 | (96) | 0 | (976) | |
Escrow, other title-related fees and other | (13,215) | (27,944) | (48,367) | (75,035) | |
Investment, dividend and other income | 0 | 0 | 0 | 0 | |
Total revenues | (13,215) | (28,040) | (48,367) | (76,011) | |
Premiums retained by agents | (13,215) | (28,040) | (48,367) | (76,011) | |
Direct labor | 0 | 0 | 0 | 0 | |
Other direct costs | 0 | 0 | 0 | 0 | |
Provision for claims | 0 | 0 | 0 | 0 | |
Adjusted gross profit | $ 0 | $ 0 | $ 0 | $ 0 | |
[1]Net premiums written includes revenues from a related party of $34.8 million and $30.3 million during the three months ended September 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $96.1 million and $81.9 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11).[2]Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.9 million and $24.8 million during the three months ended September 30, 2022 and 2021, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $77.5 million and $66.6 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11). |
Segment information - Reconcili
Segment information - Reconciliation of Adjusted Gross Profit to Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting [Abstract] | ||||
Adjusted gross profit | $ 11,606 | $ 30,280 | $ 32,866 | $ 88,937 |
Depreciation and amortization | 4,251 | 1,978 | 11,234 | 7,705 |
Corporate and other expenses | 54,151 | 53,393 | 187,182 | 133,234 |
Goodwill impairment | 33,746 | 0 | 33,746 | 0 |
Change in fair value of Warrant and Sponsor Covered Shares liabilities | (1,438) | 4,478 | (20,531) | 4,478 |
Interest expense | 4,584 | 4,531 | 13,280 | 12,341 |
Loss before income taxes | $ (83,688) | $ (34,100) | $ (192,045) | $ (68,821) |
Debt (Details)
Debt (Details) - USD ($) | Jan. 29, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | Sep. 03, 2021 |
Debt Instrument [Line Items] | ||||
Number of warrants (in shares) | 17,333,333 | |||
Penny Warrant | ||||
Debt Instrument [Line Items] | ||||
Percentage of shares called by each warrant | 1.35% | |||
Number of warrants (in shares) | 4,200,000 | |||
Senior Debt | Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 150,000,000 | |||
Debt instrument, term | 5 years | |||
Debt instrument, stated interest rate | 11.25% | |||
Debt instrument, percentage of interest paid in cash | 5% | |||
Debt instrument, debt default interest rate | 15% | |||
Minimum liquidity covenant | $ 20,000,000 | |||
Minimum consolidated revenue covenant | $ 130,000,000 | |||
Period for monthly payments | 24 months | |||
Debt fair value | $ 159,900,000 |
Stock compensation expense - Na
Stock compensation expense - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 $ / shares shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Decrease in stock-based compensation expense | $ 1.2 | $ 4.2 | |||
Stock based compensation expense | 7.7 | $ 3 | 27.4 | $ 9 | |
Stock-based compensation expense not yet recognized related to options | 14.8 | $ 14.8 | |||
Outstanding stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
Conversion ratio | 1 | ||||
Outstanding stock options | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 7 months | ||||
Outstanding stock options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 60 months | ||||
RSA’s, RSU’s and PRSU’s | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense not yet recognized | 87.8 | $ 87.8 | |||
Restricted Stock | Anniversary One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25% | ||||
Restricted Stock | Anniversary Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25% | ||||
Restricted Stock | Anniversary Three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25% | ||||
Restricted Stock | Anniversary Four | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 25% | ||||
Market-based awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Stock-based compensation expense not yet recognized | $ 0.7 | $ 0.7 | |||
Market-based awards | Omnibus Incentive Plan 2021 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Number of shares authorized (in shares) | shares | 2,435,325 | ||||
Share allocation per threshold | 33.333% | ||||
Time-based service condition satisfied period | 4 years | ||||
Market-based awards | Omnibus Incentive Plan 2021 | Stock Price Threshold One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock weighted average price (in usd per share) | $ / shares | $ 5 | ||||
Market-based awards | Omnibus Incentive Plan 2021 | Stock Price Threshold Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock weighted average price (in usd per share) | $ / shares | 7.50 | ||||
Market-based awards | Omnibus Incentive Plan 2021 | Stock Price Threshold Three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock weighted average price (in usd per share) | $ / shares | $ 10 |
Stock compensation expense - Su
Stock compensation expense - Summary of Stock Options (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Number of Stock Options | ||
Beginning balance outstanding (in shares) | shares | 24,255,204 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | (1,960,728) | |
Cancelled or forfeited (in shares) | shares | (3,213,233) | |
Ending balance outstanding (in shares) | shares | 19,081,243 | 24,255,204 |
Options exercisable, Number of Stock Options (in shares) | shares | 13,349,677 | |
Weighted Average Exercise Price ($) | ||
Beginning balance outstanding (in usd per share) | $ / shares | $ 0.51 | |
Granted (in usd per share) | $ / shares | 0 | |
Exercised (in usd per share) | $ / shares | 0.54 | |
Cancelled or forfeited (in usd per share) | $ / shares | 0.61 | |
Ending balance outstanding (in usd per share) | $ / shares | 0.58 | $ 0.51 |
Options exercisable, Weighted Average Exercise Price (in usd per share) | $ / shares | $ 0.54 | |
Stock Option Activity, Additional Disclosures | ||
Outstanding balance, Weighted Average Remaining Contractual Life | 6 years 11 months 23 days | 7 years 10 months 28 days |
Granted, Weighted Average Remaining Contractual Life | 0 days | |
Exercised, Weighted Average Remaining Contractual Life | 4 years 2 months 8 days | |
Cancelled or forfeited, Weighted Average Remaining Contractual Life | 2 years 29 days | |
Options Exercisable, Weighted Average Remaining Contractual Life | 6 years 7 months 20 days | |
Outstanding, Aggregate Intrinsic Value | $ | $ 198 | $ 109,061 |
Options exercisable, Aggregate Intrinsic Value | $ | $ 198 |
Stock compensation expense - No
Stock compensation expense - Nonvested Restricted Stock Awards (Details) - RSA’s, RSU’s and PRSU’s | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of Market-based awards | |
Beginning balance non-vested (in shares) | shares | 18,579,930 |
Granted (in shares) | shares | 38,084,744 |
Vested (in shares) | shares | (3,032,377) |
Adjustment for PRSUs expected to vest (in shares) | shares | (3,172,883) |
Cancelled or Forfeited (in shares) | shares | (14,770,922) |
Ending balance non-vested (in shares) | shares | 35,688,492 |
Average Grant Date Fair Value ($) | |
Beginning balance non-vested (in usd per share) | $ / shares | $ 6.11 |
Granted (in usd per share) | $ / shares | 1.90 |
Exercised (in usd per share) | $ / shares | 5.65 |
Adjustment for PRSUs expected to vest (in usd per share) | $ / shares | 5.91 |
Cancelled or Forfeited (in usd per share) | $ / shares | 3.70 |
Ending balance non-vested (in usd per share) | $ / shares | $ 2.67 |
Stock compensation expense - Th
Stock compensation expense - The Unobservable Significant Inputs To The Valuation Model (Details) | 9 Months Ended |
Sep. 30, 2022 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock price at issuance (in usd per share) | $ 0.92 |
Market-based awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 75% |
Risk-free interest rate | 3.14% |
Current expected term | 3 years 10 months 24 days |
Expected dividend yield | 0% |
Stock compensation expense - _2
Stock compensation expense - Nonvested Market-based awards (Details) - Market-based awards | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of Market-based awards | |
Beginning balance non-vested (in shares) | shares | 0 |
Granted (in shares) | shares | 2,435,325 |
Vested (in shares) | shares | 0 |
Cancelled or Forfeited (in shares) | shares | 0 |
Ending balance non-vested (in shares) | shares | 2,435,325 |
Average Grant Date Fair Value ($) | |
Beginning balance non-vested (in usd per share) | $ / shares | $ 0 |
Granted (in usd per share) | $ / shares | 0.32 |
Exercised (in usd per share) | $ / shares | 0 |
Cancelled or Forfeited (in usd per share) | $ / shares | 0 |
Ending balance non-vested (in usd per share) | $ / shares | $ 0.32 |
Earnings per share - Basic and
Earnings per share - Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator | ||||||||
Net loss attributable to Doma Holdings, Inc. | $ (84,113) | $ (58,652) | $ (50,026) | $ (34,270) | $ (23,299) | $ (11,758) | $ (192,791) | $ (69,327) |
Denominator | ||||||||
Weighted-average common shares - basic (in shares) | 326,820,954 | 245,003,754 | 325,207,884 | 128,105,954 | ||||
Weighted-average common shares - diluted (in shares) | 326,820,954 | 245,003,754 | 325,207,884 | 128,105,954 | ||||
Net loss per share attributable to stockholders | ||||||||
Basic (in usd per share) | $ (0.26) | $ (0.14) | $ (0.59) | $ (0.54) | ||||
Diluted (in usd per share) | $ (0.26) | $ (0.14) | $ (0.59) | $ (0.54) |
Earnings per share - Antidiluti
Earnings per share - Antidilutive Securities Excluded from Computation (Details) - shares | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 92,759,080 | 63,071,142 |
Outstanding stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 19,081,243 | 26,283,820 |
Warrants for common and preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 18,022,750 | 18,022,750 |
RSA’s, RSU’s and PRSU’s | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 35,688,492 | 938,304 |
Market-based awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 2,435,325 | 0 |
Sponsor Covered Shares and Seller Earnout Shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded (in shares) | 17,531,270 | 17,826,268 |
Related party transactions - Na
Related party transactions - Narrative (Details) | Sep. 30, 2022 |
Lennar | Doma Holding, Inc | |
Related Party Transaction [Line Items] | |
Equity ownership | 25.10% |
Related party transactions - Su
Related party transactions - Summary of Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | ||
Related Party Transaction [Line Items] | ||||||
Revenues | [1] | $ 94,488 | $ 141,491 | $ 299,080 | $ 358,754 | |
Premiums retained by Third-Party Agents | [2] | 65,141 | 91,596 | 200,381 | 227,115 | |
Net receivables | 10,469 | 10,469 | $ 15,498 | |||
Lennar | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Revenues | 34,795 | 30,298 | 96,126 | 81,925 | ||
Premiums retained by Third-Party Agents | 27,932 | $ 24,772 | 77,542 | $ 66,606 | ||
Net receivables | $ 3,850 | $ 3,850 | $ 3,883 | |||
[1]Net premiums written includes revenues from a related party of $34.8 million and $30.3 million during the three months ended September 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $96.1 million and $81.9 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11).[2]Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.9 million and $24.8 million during the three months ended September 30, 2022 and 2021, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $77.5 million and $66.6 million during the nine months ended September 30, 2022 and 2021, respectively (see Note 11). |
Commitments and contingencies -
Commitments and contingencies - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Escrow Deposit, Contingent Liability | ||
Loss Contingencies [Line Items] | ||
Contingent liabilities | $ 159.1 | $ 204.8 |
Accrued expenses and other li_3
Accrued expenses and other liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Employee compensation and benefits | $ 23,380 | $ 32,756 |
Other | 11,575 | 21,393 |
Total accrued expenses and other liabilities | $ 34,955 | $ 54,149 |
Accrued expenses and other li_4
Accrued expenses and other liabilities- Workforce Reduction Plan (Details) $ in Millions | 6 Months Ended | 9 Months Ended |
Sep. 30, 2022 position | Sep. 30, 2022 USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Forfeited stock-based compensation, reduction plan | $ | $ 1.9 | |
Workforce Reduction Plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Number of positions expected to be eliminated | position | 561 | |
Percentage of workforce expected to be eliminated | 27% |
Accrued expenses and other li_5
Accrued expenses and other liabilities - Schedule of Liabilities Associated With Reduction Plans (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Restructuring Reserve [Roll Forward] | |
Balance as of January 1, 2022 | $ 0 |
Charges incurred | 8,396 |
Payments and other adjustments | (7,829) |
Balance as of September 30, 2022 | $ 567 |
Employee benefit plan (Details)
Employee benefit plan (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | |||||
Employer matching contribution percentage | 50% | ||||
Employer matching percentage of employee's gross pay | 6% | ||||
Maximum annual contributions per employee that receive an employer match, percent | 3.50% | 3% | |||
Defined contributions | $ 1.3 | $ 0.7 | $ 3.6 | $ 2 | |
First 1% | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Employer matching contribution percentage | 100% | ||||
Employer matching percentage of employee's gross pay | 1% | ||||
Next 5% | |||||
Defined Contribution Plan Disclosure [Line Items] | |||||
Employer matching contribution percentage | 50% | ||||
Employer matching percentage of employee's gross pay | 5% |
Research and development (Detai
Research and development (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Research and Development [Abstract] | ||||
Research and development expenses incurred | $ 3,660 | $ 5,402 | $ 14,781 | $ 10,849 |
Capitalized internally developed software costs | 8,393 | 5,347 | 25,603 | 14,157 |
Research and development spend, inclusive of capitalized internally developed software cost | $ 12,053 | $ 10,749 | $ 40,384 | $ 25,006 |
Warrant liabilities (Details)
Warrant liabilities (Details) $ / shares in Units, $ in Thousands | Jul. 28, 2021 $ / shares | Sep. 30, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Dec. 04, 2021 | Sep. 03, 2021 shares | Dec. 04, 2020 $ / shares shares |
Class of Warrant or Right [Line Items] | ||||||
Number of warrants (in shares) | shares | 17,333,333 | |||||
Warrant, term | 1 year | |||||
Warrant liabilities | $ | $ 1,040 | $ 16,467 | ||||
Public Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of warrants (in shares) | shares | 11,500,000 | 11,500,000 | 11,500,000 | |||
Number of shares called by each warrant (in shares) | shares | 1 | |||||
Exercise price of warrants (in usd per share) | $ 11.50 | |||||
Redemption period | 30 days | |||||
Fair market value price period | 10 days | |||||
Fair market value, maximum conversion ratio | 0.361 | |||||
Warrant liabilities | $ | $ 700 | $ 10,900 | ||||
Private Placement Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Number of warrants (in shares) | shares | 5,833,333 | 5,833,333 | 5,833,333 | |||
Number of shares called by each warrant (in shares) | shares | 1 | |||||
Exercise price of warrants (in usd per share) | $ 11.50 | |||||
Warrant liabilities | $ | $ 400 | $ 5,500 | ||||
Common stock equals or exceeds $18 | Public Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Stock price redemption threshold (in usd per share) | $ 18 | |||||
Redemption price (in usd per share) | $ 0.01 | |||||
Notice required for redemption of warrants | 30 days | |||||
Trading days threshold for warrant redemption | 20 days | |||||
Consecutive trading days threshold for redemption | 30 days | |||||
Common stock equals or exceeds $10 | Public Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Stock price redemption threshold (in usd per share) | $ 10 | |||||
Redemption price (in usd per share) | $ 0.10 | |||||
Notice required for redemption of warrants | 30 days | |||||
Common stock equals or exceeds $10 | Minimum | Public Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Stock price redemption threshold (in usd per share) | $ 10 | |||||
Common stock equals or exceeds $10 | Maximum | Public Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Stock price redemption threshold (in usd per share) | $ 18 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Sep. 30, 2022 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 month |
Renewal term | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 7 years |
Renewal term | 5 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Components of lease expense: | |
Operating lease expense | $ 9,097 |
Less sublease income | (250) |
Net lease expense | 8,847 |
Cash flow information related to leases: | |
Operating cash outflow from operating leases during the nine months ended September 30, 2022 | 8,174 |
Right-of-use assets obtained during the nine months ended September 30, 2022 in exchange for new operating lease liabilities | $ 9,857 |
Weighted average remaining lease term | 4 years 2 months 8 days |
Weighted average discount rate | 10% |
Leases - Lease Maturity (Detail
Leases - Lease Maturity (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Maturities of lease liabilities: | |
2022 | $ 2,614 |
2023 | 9,719 |
2024 | 8,272 |
2025 | 6,066 |
2026 | 4,585 |
Thereafter | 4,462 |
Total lease payments | 35,718 |
Less imputed interest | (6,629) |
Lease liabilities | $ 29,089 |