COVER PAGE
COVER PAGE - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-39658 | |
Entity Registrant Name | ROOT, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-2717903 | |
Entity Address, Address Line One | 80 E. Rich Street | |
Entity Address, Address Line Two | Suite 500 | |
Entity Address, City or Town | Columbus | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 43215 | |
City Area Code | 866 | |
Local Phone Number | 980-9431 | |
Title of 12(b) Security | Class A common stock,$0.0001 par value per share | |
Trading Symbol | ROOT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001788882 | |
Current Fiscal Year End Date | --12-31 | |
Class A Shares | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 9.6 | |
Class B Shares | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 5 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Investments: | ||
Fixed maturities available-for-sale, at fair value (amortized cost: $171.1 and $134.2 at September 30, 2023 and December 31, 2022, respectively) | $ 164.5 | $ 128.4 |
Short-term investments (amortized cost: $2.6 and $0.4 at September 30, 2023 and December 31, 2022, respectively) | 2.6 | 0.4 |
Other investments | 4.4 | 4.4 |
Total investments | 171.5 | 133.2 |
Cash and cash equivalents | 635.3 | 762.1 |
Restricted cash | 1 | 1 |
Premiums receivable, net of allowance of $2.7 and $2.8 at September 30, 2023 and December 31, 2022, respectively | 187.9 | 111.9 |
Reinsurance recoverable and receivable, net of allowance of $2.9 and $0.2 at September 30, 2023 and December 31, 2022, respectively | 137.7 | 148.8 |
Prepaid reinsurance premiums | 36.1 | 74.2 |
Other assets | 70.7 | 81.7 |
Total assets | 1,240.2 | 1,312.9 |
Liabilities: | ||
Loss and loss adjustment expense reserves | 256.5 | 287.4 |
Unearned premiums | 218.9 | 136.5 |
Long-term debt and warrants | 298.3 | 295.4 |
Reinsurance premiums payable | 71.8 | 119.8 |
Accounts payable and accrued expenses | 47.8 | 39.7 |
Other liabilities | 57.8 | 45 |
Total liabilities | 951.1 | 923.8 |
Commitments and Contingencies (Note 11) | ||
Redeemable convertible preferred stock, $0.0001 par value, 100.0 shares authorized, 14.1 shares issued and outstanding at September 30, 2023 and December 31, 2022 (liquidation preference of $126.5) | 112 | 112 |
Stockholders’ equity: | ||
Additional paid-in capital | 1,874.9 | 1,850.7 |
Accumulated other comprehensive loss | (6.6) | (5.8) |
Accumulated loss | (1,691.2) | (1,567.8) |
Total stockholders’ equity | 177.1 | 277.1 |
Total liabilities, redeemable convertible preferred stock and stockholders’ equity | 1,240.2 | 1,312.9 |
Class A Shares | ||
Stockholders’ equity: | ||
Common stock, value | 0 | 0 |
Class B Shares | ||
Stockholders’ equity: | ||
Common stock, value | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED (Parenthetical) - USD ($) shares in Millions, $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Amortized cost, fixed maturities | $ 171.1 | $ 134.2 |
Amortized cost, short term investments | 2.6 | 0.4 |
Allowance for premiums receivable | 2.7 | 2.8 |
Allowance for credit loss | $ 2.9 | $ 0.2 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 100 | 100 |
Preferred stock, shares issued (in shares) | 14.1 | 14.1 |
Preferred stock, shares outstanding (in shares) | 14.1 | 14.1 |
Preferred stock, liquidation preference | $ 126.5 | $ 126.5 |
Class A Shares | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000 | 1,000 |
Common stock, shares issued (in shares) | 9.5 | 9.2 |
Common stock, shares outstanding (in shares) | 9.5 | 9.2 |
Class B Shares | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 269 | 269 |
Common stock, shares issued (in shares) | 5 | 5 |
Common stock, shares outstanding (in shares) | 5 | 5 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - UNAUDITED - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||
Net premiums earned | $ 100 | $ 68.6 | $ 223.9 | $ 221.6 |
Net investment income | 9 | 0.9 | 22.5 | 2.2 |
Net realized gains on investments | 0 | 0 | 0 | 1.1 |
Fee income | 6.2 | 3.8 | 13.2 | 13.1 |
Other income | 0.1 | 0.4 | 0.6 | 1.5 |
Total revenues | 115.3 | 73.7 | 260.2 | 239.5 |
Operating expenses: | ||||
Loss and loss adjustment expenses | 85.8 | 80.9 | 208.6 | 273.3 |
Sales and marketing | 13.1 | 8.1 | 22.8 | 44.8 |
Other insurance expense (benefit) | 18.3 | 1.1 | 22.2 | (5.7) |
Technology and development | 11.1 | 14.3 | 32.4 | 46.1 |
General and administrative | 21 | 26.4 | 63.2 | 96.4 |
Total operating expenses | 149.3 | 130.8 | 349.2 | 454.9 |
Operating loss | (34) | (57.1) | (89) | (215.4) |
Interest expense | (11.8) | (9.3) | (34.4) | (24) |
Loss before income tax expense | (45.8) | (66.4) | (123.4) | (239.4) |
Income tax expense | 0 | 0 | 0 | 0 |
Net loss | (45.8) | (66.4) | (123.4) | (239.4) |
Other comprehensive loss: | ||||
Changes in net unrealized losses on investments | (0.7) | (2.3) | (0.8) | (7.3) |
Comprehensive loss | $ (46.5) | $ (68.7) | $ (124.2) | $ (246.7) |
Loss per common share: basic (both Class A and B) (in dollars per share) | $ (3.16) | $ (4.71) | $ (8.57) | $ (17.10) |
Loss per common share: diluted (both Class A and B) (in dollars per share) | $ (3.16) | $ (4.71) | $ (8.57) | $ (17.10) |
Weighted-average common shares outstanding: basic (both Class A and B) (in shares) | 14.5 | 14.1 | 14.4 | 14 |
Weighted-average common shares outstanding: diluted (both Class A and B) (in shares) | 14.5 | 14.1 | 14.4 | 14 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY - UNAUDITED - USD ($) shares in Millions, $ in Millions | Total | Class A Shares | Class B Shares | Class A and Class B Common Stock | Class A and Class B Common Stock Class A Shares | Class A and Class B Common Stock Class B Shares | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Loss |
Beginning balance (in shares) at Dec. 31, 2021 | 14.1 | ||||||||
Beginning balance at Dec. 31, 2021 | $ 112 | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 14.1 | ||||||||
Ending balance at Sep. 30, 2022 | $ 112 | ||||||||
Beginning balance (in shares) at Dec. 31, 2021 | 7.9 | 6.1 | |||||||
Beginning balance at Dec. 31, 2021 | 536.4 | $ 0 | $ 1,806.1 | $ 0.4 | $ (1,270.1) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (239.4) | (239.4) | |||||||
Other comprehensive loss | (7.3) | (7.3) | |||||||
Conversion of Class B to Class A (in shares) | 1.1 | (1.1) | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares) | 0.1 | ||||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes | 0.4 | 0.4 | |||||||
Reclassification of early-exercised stock options from liabilities | 0.1 | 0.1 | |||||||
Common stock—share-based compensation expense | 21.8 | 21.8 | |||||||
Warrant compensation expense | 10.3 | 10.3 | |||||||
Warrant issuance costs | (1.1) | (1.1) | |||||||
Term Loan warrants issued | 0.6 | 0.6 | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 9.1 | 5 | |||||||
Ending balance at Sep. 30, 2022 | $ 321.8 | 0 | 1,838.2 | (6.9) | (1,509.5) | ||||
Beginning balance (in shares) at Jun. 30, 2022 | 14.1 | ||||||||
Beginning balance at Jun. 30, 2022 | $ 112 | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 14.1 | ||||||||
Ending balance at Sep. 30, 2022 | $ 112 | ||||||||
Beginning balance (in shares) at Jun. 30, 2022 | 8.9 | 5.2 | |||||||
Beginning balance at Jun. 30, 2022 | 381.3 | 0 | 1,829 | (4.6) | (1,443.1) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (66.4) | (66.4) | |||||||
Other comprehensive loss | (2.3) | (2.3) | |||||||
Conversion of Class B to Class A (in shares) | 0.2 | (0.2) | |||||||
Common stock—share-based compensation expense | 7.8 | 7.8 | |||||||
Warrant compensation expense | 1.5 | 1.5 | |||||||
Warrant issuance costs | (0.1) | (0.1) | |||||||
Ending balance (in shares) at Sep. 30, 2022 | 9.1 | 5 | |||||||
Ending balance at Sep. 30, 2022 | $ 321.8 | 0 | 1,838.2 | (6.9) | (1,509.5) | ||||
Beginning balance (in shares) at Dec. 31, 2022 | 14.1 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 112 | ||||||||
Ending balance (in shares) at Sep. 30, 2023 | 14.1 | ||||||||
Ending balance at Sep. 30, 2023 | $ 112 | ||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 9.2 | 5 | 9.2 | 5 | |||||
Beginning balance at Dec. 31, 2022 | 277.1 | 0 | 1,850.7 | (5.8) | (1,567.8) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (123.4) | (123.4) | |||||||
Other comprehensive loss | $ (0.8) | (0.8) | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares) | 0 | 0.3 | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes | $ 0 | ||||||||
Common stock—share-based compensation expense | 12.4 | 12.4 | |||||||
Warrant compensation expense | 13.3 | 13.3 | |||||||
Warrant issuance costs | (1.5) | (1.5) | |||||||
Ending balance (in shares) at Sep. 30, 2023 | 9.5 | 5 | 9.5 | 5 | |||||
Ending balance at Sep. 30, 2023 | $ 177.1 | 0 | 1,874.9 | (6.6) | (1,691.2) | ||||
Beginning balance (in shares) at Jun. 30, 2023 | 14.1 | ||||||||
Beginning balance at Jun. 30, 2023 | $ 112 | ||||||||
Ending balance (in shares) at Sep. 30, 2023 | 14.1 | ||||||||
Ending balance at Sep. 30, 2023 | $ 112 | ||||||||
Beginning balance (in shares) at Jun. 30, 2023 | 9.4 | 5 | |||||||
Beginning balance at Jun. 30, 2023 | 214.4 | 0 | 1,865.7 | (5.9) | (1,645.4) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (45.8) | (45.8) | |||||||
Other comprehensive loss | (0.7) | (0.7) | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares) | 0.1 | ||||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes | 0 | ||||||||
Common stock—share-based compensation expense | 4.7 | 4.7 | |||||||
Warrant compensation expense | 5 | 5 | |||||||
Warrant issuance costs | (0.5) | (0.5) | |||||||
Ending balance (in shares) at Sep. 30, 2023 | 9.5 | 5 | 9.5 | 5 | |||||
Ending balance at Sep. 30, 2023 | $ 177.1 | $ 0 | $ 1,874.9 | $ (6.6) | $ (1,691.2) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (123.4) | $ (239.4) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 12.4 | 21.8 |
Warrant compensation expense | 13.3 | 10.3 |
Depreciation and amortization | 8.2 | 9.5 |
Bad debt expense | 10.6 | 13.7 |
Net realized gains on investments | 0 | (1.1) |
Gain on lease modification | (0.3) | (0.2) |
Changes in operating assets and liabilities: | ||
Premiums receivable | (83.9) | 4.5 |
Reinsurance recoverable and receivable | 8.5 | 19 |
Prepaid reinsurance premiums | 38.1 | 14.6 |
Other assets | 10.6 | (2) |
Losses and loss adjustment expenses reserves | (30.9) | (26) |
Unearned premiums | 82.4 | (22.8) |
Reinsurance premiums payable | (48) | 8.8 |
Accounts payable and accrued expenses | 9.6 | 17.5 |
Other liabilities | 13.1 | 7.9 |
Net cash used in operating activities | (79.7) | (163.9) |
Cash flows from investing activities: | ||
Purchases of investments | (61.7) | (30.8) |
Proceeds from maturities, call and pay downs of investments | 22.3 | 26.7 |
Sales of investments | 0.5 | 7.1 |
Capitalization of internally developed software | (7.1) | (7.4) |
Purchases of fixed assets | (0.2) | 0 |
Purchases of indefinite-lived intangible assets and transaction costs | 0 | (1.3) |
Net cash used in investing activities | (46.2) | (5.7) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options and restricted stock units, net of tax (withholding)/proceeds | (0.9) | |
Proceeds from exercise of stock options and restricted stock units, net of tax (withholding)/proceeds | 0.3 | |
Proceeds from issuance of debt and related warrants, net of issuance costs | 0 | 286 |
Payment of preferred stock and related warrants issuance costs | 0 | (3) |
Net cash (used in) provided by financing activities | (0.9) | 283.3 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (126.8) | 113.7 |
Cash, cash equivalents and restricted cash at beginning of period | 763.1 | 707 |
Cash, cash equivalents and restricted cash at end of period | $ 636.3 | $ 820.7 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESSRoot, Inc. is a holding company which, directly or indirectly, maintains 100% ownership of each of its subsidiaries, including, among others, Root Insurance Company and Root Property & Casualty Insurance Company, both Ohio-domiciled insurance companies, and Root Reinsurance Company, Ltd., a Cayman Islands-domiciled reinsurance company, together with Root, Inc., “we,” “us” or “our.” We were formed in 2015 and began writing personal auto insurance in July 2016. We are a technology company operating primarily a direct-to-consumer model with the majority of our personal insurance customers acquired through mobile applications and our embedded platform. We offer auto and renters insurance products underwritten by Root Insurance Company and Root Property & Casualty Insurance Company. |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation —In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. All such adjustments are of a normal and recurring nature. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission, or SEC, on February 22, 2023. Basis of Consolidation —The unaudited condensed consolidated financial statements include the accounts of Root, Inc. and its subsidiaries, all of which are wholly owned. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. All intercompany accounts and transactions have been eliminated. Use of Estimates —The preparation of the unaudited condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in our unaudited condensed consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, or LAE, valuation allowances for income taxes and allowance for expected credit losses on premium receivables and reinsurance recoverables. Revision of Previously Issued Financial Statements —During the fourth quarter of 2022, we identified errors in our first, second and third quarter financial statements for 2022 and revised the quarterly presentation of certain sales and marketing and general and administrative expenses on our condensed consolidated statements of operations and comprehensive loss related to the purported misappropriation of funds by a senior marketing employee. The errors did not impact periods prior to 2022. In accordance with SEC Staff Accounting Bulletin, or SAB, No. 99, Materiality, and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , we assessed the materiality of these errors on our financial statements and concluded the errors were not material to the unaudited interim financial statements for the three and nine months ended September 30, 2022. The following tables present the effect of the revision on the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022, condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity and condensed consolidated statement of cash flows as of and for the nine months ended September 30, 2022. Three Months Ended September 30, 2022 (unaudited) Nine Months Ended September 30, 2022 (unaudited) As reported Adjustments As Corrected As reported Adjustments As Corrected (in millions, except per share amounts) Condensed consolidated statements of operations and comprehensive loss: Sales and marketing $ 5.7 $ 2.4 $ 8.1 $ 45.8 $ (1.0) $ 44.8 General and administrative 26.4 — 26.4 86.3 10.1 96.4 Total operating expenses 128.4 2.4 130.8 445.8 9.1 454.9 Operating loss (54.7) (2.4) (57.1) (206.3) (9.1) (215.4) Loss before income tax expense (64.0) (2.4) (66.4) (230.3) (9.1) (239.4) Net loss (64.0) (2.4) (66.4) (230.3) (9.1) (239.4) Comprehensive loss $ (66.3) $ (2.4) $ (68.7) $ (237.6) $ (9.1) $ (246.7) Weighted-average common shares outstanding: basic and diluted (both Class A and B) 14.1 14.1 14.0 14.0 Loss per common share: basic and diluted (both Class A and B) $ (4.54) $ (4.71) $ (16.45) $ (17.10) As of September 30, 2022 (unaudited) As reported Adjustments As Corrected (in millions) Condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity: Accumulated loss $ (1,500.4) $ (9.1) $ (1,509.5) Total stockholders’ equity $ 330.9 $ (9.1) $ 321.8 Nine Months Ended September 30, 2022 (unaudited) As reported Adjustments As Corrected (in millions) Condensed consolidated statement of cash flows: Net loss $ (230.3) $ (9.1) $ (239.4) Other assets (11.1) 9.1 (2.0) Net cash used in operating activities $ (163.9) $ — $ (163.9) Cash, Cash Equivalents and Restricted Cash —The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amount in the condensed consolidated statements of cash flows: As of September 30, December 31, 2023 2022 (dollars in millions) Cash and cash equivalents $ 635.3 $ 762.1 Restricted cash 1.0 1.0 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 636.3 $ 763.1 Performance-Based Restricted Stock Units —During the third quarter of 2023, we granted 0.4 million performance-based restricted stock units, or PSUs, to certain key employees as part of our equity compensation plan. The PSUs are expected to vest over a derived service period of one Stock Compensation . The service condition with respect to the four tranches of PSUs will be met in installments on April 1, 2024, and each of the subsequent three anniversaries of that date, or Vesting Date Requirement, subject to the individual’s continued service through such dates. Stock price goals must be met on or after the respective tranche’s Vesting Date Requirement and are based on the average closing price per share of our Class A common stock over a consecutive 45 day trading period. Any tranche of PSUs with respect to which the stock price goal has not been met as of April 1, 2028 (the final day of the performance period) will be forfeited as of such date. The PSU compensation expense is recognized based on the grant date fair value of the award, which was determined by simulating Root’s stock prices using a Monte Carlo simulation in a risk-neutral framework, assuming a Geometric Brownian Motion. The simulation is repeated 100,000 times, and the average of the discounted values for each tranche is the grant date fair value for that tranche. The median time to vest is the derived service period. Employing a Monte Carlo simulation requires a range of inputs for each uncertain variable, and establishing linkage between the assumptions, if necessary. Inputs and assumptions used in our analysis included our stock price at grant date, exercise prices, the term of the PSUs, equity volatility, risk-free rate and dividend yield. Equity volatility was derived using a blended volatility assumption of 50% weight on Root’s historical volatility calculated from daily stock returns since IPO from the grant date and a 50% weight based on Root’s term matched simple average peer volatility as of the valuation date because our company-specific volatility is not sufficient by itself at the time of grant. The expense is recognized via a graded vesting method over the derived service period. In the event that both the service condition and market condition are met earlier, expense would be accelerated. If the service condition is not achieved, previously recognized compensation cost for the associated tranche is reversed. In the event that the market conditions are never achieved before the expiration date, but the service condition is met, the respective compensation costs remain recognized. |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENTS | INVESTMENTS The amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities at September 30, 2023 and December 31, 2022 are as follows: September 30, 2023 Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value (dollars in millions) Fixed maturities: U.S. Treasury securities and agencies $ 16.8 $ — $ — $ (0.4) $ 16.4 Municipal securities 25.6 — — (1.3) 24.3 Corporate debt securities 69.4 — — (2.9) 66.5 Residential mortgage-backed securities 12.3 — — (0.5) 11.8 Commercial mortgage-backed securities 31.0 — — (1.3) 29.7 Other debt obligations 16.0 — — (0.2) 15.8 Total fixed maturities 171.1 — — (6.6) 164.5 Short-term investments 2.6 — — — 2.6 Total $ 173.7 $ — $ — $ (6.6) $ 167.1 December 31, 2022 Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value (dollars in millions) Fixed maturities: U.S. Treasury securities and agencies $ 11.3 $ — $ — $ (0.3) $ 11.0 Municipal securities 21.4 — — (1.2) 20.2 Corporate debt securities 60.5 — — (2.7) 57.8 Residential mortgage-backed securities 5.5 — — (0.3) 5.2 Commercial mortgage-backed securities 24.4 — — (1.2) 23.2 Other debt obligations 11.1 — 0.1 (0.2) 11.0 Total fixed maturities 134.2 — 0.1 (5.9) 128.4 Short-term investments 0.4 — — — 0.4 Total $ 134.6 $ — $ 0.1 $ (5.9) $ 128.8 Management reviewed the available-for-sale securities at each balance sheet date to consider whether it was necessary to recognize a credit loss as of September 30, 2023 and December 31, 2022. We do not intend to sell the investments and it is not more likely than not that we will be required to sell the security before recovery. Management concluded that the available-for-sale securities’ unrealized losses were due to non-credit related factors and, therefore, there was no allowance for credit loss as of September 30, 2023 and December 31, 2022. The following tables reflect the gross unrealized losses and fair value of short-term investments and available-for-sale fixed maturity securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2023 and December 31, 2022: September 30, 2023 Less than 12 Months 12 Months or More Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized (dollars in millions) Fixed maturities: U.S. Treasury securities and agencies $ 10.2 $ (0.2) $ 6.2 $ (0.2) $ 16.4 $ (0.4) Municipal securities 7.9 (0.2) 15.7 (1.1) 23.6 (1.3) Corporate debt securities 27.1 (0.8) 39.3 (2.1) 66.4 (2.9) Residential mortgage-backed securities 8.5 (0.2) 2.7 (0.3) 11.2 (0.5) Commercial mortgage-backed securities 13.5 (0.4) 15.8 (0.9) 29.3 (1.3) Other debt obligations 9.5 (0.1) 3.8 (0.1) 13.3 (0.2) Total fixed maturities 76.7 (1.9) 83.5 (4.7) 160.2 (6.6) Short-term investments 1.1 — — — 1.1 — Total $ 77.8 $ (1.9) $ 83.5 $ (4.7) $ 161.3 $ (6.6) December 31, 2022 Less than 12 Months 12 Months or More Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized (dollars in millions) Fixed maturities: U.S. Treasury securities and agencies $ 6.9 $ (0.1) $ 4.1 $ (0.2) $ 11.0 $ (0.3) Municipal securities 11.5 (0.5) 8.2 (0.7) 19.7 (1.2) Corporate debt securities 45.3 (1.6) 11.5 (1.1) 56.8 (2.7) Residential mortgage-backed securities 2.2 — 1.9 (0.3) 4.1 (0.3) Commercial mortgage-backed securities 18.3 (0.8) 4.6 (0.4) 22.9 (1.2) Other debt obligations 6.8 (0.2) — — 6.8 (0.2) Total fixed maturities 91.0 (3.2) 30.3 (2.7) 121.3 (5.9) Short-term investments 0.1 — — — 0.1 — Total $ 91.1 $ (3.2) $ 30.3 $ (2.7) $ 121.4 $ (5.9) Other Investments As of September 30, 2023 and December 31, 2022, other investments related to our private equity investments were $4.4 million. There were no realized gains or losses for the three and nine months ended September 30, 2023. We recognized zero and $1.2 million of realized gains for the three and nine months ended September 30, 2022, respectively. We recorded the gain on sale of our private equity investments within net realized gains on investments in our condensed consolidated statements of operations and comprehensive loss. There were no unrealized gains and losses or impairment losses recognized on private equity investments for the three and nine months ended September 30, 2023 and 2022. The following table reflects the gross and net realized gains and losses on short-term investments, available-for-sale fixed maturities and other investments that have been included in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Realized gains on investments $ — $ — $ — $ 1.2 Realized losses on investments — — — (0.1) Net realized gains on investments $ — $ — $ — $ 1.1 The following table sets forth the amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities by contractual maturity at September 30, 2023: September 30, 2023 Amortized Cost Fair Value (dollars in millions) Due in one year or less $ 33.3 $ 32.8 Due after one year through five years 102.3 98.1 Due five years through 10 years 21.4 20.4 Due after 10 years 16.7 15.8 Total $ 173.7 $ 167.1 The following table sets forth the components of net investment income for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Interest on bonds $ 1.4 $ 0.6 $ 3.3 $ 1.7 Interest on deposits and cash equivalents 7.9 0.6 19.8 1.2 Total 9.3 1.2 23.1 2.9 Investment expense (0.3) (0.3) (0.6) (0.7) Net investment income $ 9.0 $ 0.9 $ 22.5 $ 2.2 The following tables summarize the credit ratings of short-term investments and available-for-sale fixed maturity securities at September 30, 2023 and December 31, 2022: September 30, 2023 Amortized Cost Fair Value % of Total (dollars in millions) S&P Global rating or equivalent AAA $ 51.2 $ 49.3 29.5 % AA+, AA, AA-, A-1 62.4 60.2 36.0 A+, A, A- 46.3 44.2 26.5 BBB+, BBB, BBB- 13.8 13.4 8.0 Total $ 173.7 $ 167.1 100.0 % December 31, 2022 Amortized Cost Fair Value % of Total (dollars in millions) S&P Global rating or equivalent AAA $ 62.5 $ 59.9 46.5 % AA+, AA, AA-, A-1 19.9 19.1 14.8 A+, A, A- 38.4 36.5 28.3 BBB+, BBB, BBB- 13.8 13.3 10.4 Total $ 134.6 $ 128.8 100.0 % |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | FAIR VALUE OF FINANCIAL INSTRUMENTS The following tables provide information about our financial assets measured and reported at fair value as of September 30, 2023 and December 31, 2022: September 30, 2023 Level 1 Level 2 Level 3 Total (dollars in millions) Assets Fixed maturities: U.S. Treasury securities and agencies $ 15.4 $ 1.0 $ — $ 16.4 Municipal securities — 24.3 — 24.3 Corporate debt securities — 66.5 — 66.5 Residential mortgage-backed securities — 11.8 — 11.8 Commercial mortgage-backed securities — 29.7 — 29.7 Other debt obligations — 15.8 — 15.8 Total fixed maturities 15.4 149.1 — 164.5 Short-term investments 2.4 0.2 — 2.6 Cash equivalents 363.6 — — 363.6 Total assets at fair value $ 381.4 $ 149.3 $ — $ 530.7 December 31, 2022 Level 1 Level 2 Level 3 Total (dollars in millions) Assets Fixed maturities: U.S. Treasury securities and agencies $ 9.2 $ 1.8 $ — $ 11.0 Municipal securities — 20.2 — 20.2 Corporate debt securities — 57.8 — 57.8 Residential mortgage-backed securities — 5.2 — 5.2 Commercial mortgage-backed securities — 23.2 — 23.2 Other debt obligations — 11.0 — 11.0 Total fixed maturities 9.2 119.2 — 128.4 Short-term investments — 0.4 — 0.4 Cash equivalents 487.3 — — 487.3 Total assets at fair value $ 496.5 $ 119.6 $ — $ 616.1 We estimate the fair value of all our different classes of Level 2 fixed maturities and short-term investments by using quoted prices from a combination of an independent pricing vendor or broker/dealer, pricing models, quoted prices of securities with similar characteristics or discounted cash flows. All significant inputs were observable in the active markets. Private Equity Investments Measured at Fair Value on a Non-Recurring Basis Private equity investments that have been remeasured during the period due to an observable event or impairment are classified within Level 3 in the fair value hierarchy because we estimate the value based on valuation methods which may include a combination of the observable transaction price at the transaction date and other unobservable inputs including volatility, rights, and obligations of the investments we hold. See Note 3, “Investments,” for further information on our private equity investments. Fair Value of Long-Term Debt The carrying amount of long-term debt is recorded at the unpaid balance, net of discount and debt issuance costs. The fair value of outstanding long-term debt is classified within Level 2 of the fair value hierarchy. The fair value is based on a model referencing observable interest rates and spreads to project and discount cash flows to present value. As of September 30, 2023 and December 31, 2022, the carrying amounts and fair values of these financial instruments were as follows: Carrying Amount as of September 30, 2023 Estimated Fair Value as of September 30, 2023 Carrying Amount as of December 31, 2022 Estimated Fair Value as of December 31, 2022 (dollars in millions) Long-term debt $ 298.3 $ 304.8 $ 295.4 $ 309.7 |
LOSS AND LOSS ADJUSTMENT EXPENS
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | 9 Months Ended |
Sep. 30, 2023 | |
Insurance [Abstract] | |
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES The following provides a reconciliation of the beginning and ending reserve balances for loss and LAE, net of reinsurance: Nine Months Ended September 30, 2023 2022 (dollars in millions) Gross loss and LAE reserves, January 1 $ 287.4 $ 320.2 Reinsurance recoverable on unpaid losses (76.4) (79.5) Net loss and LAE reserves, January 1 211.0 240.7 Net incurred loss and LAE related to: Current year 209.2 273.5 Prior years (0.6) (0.2) Total incurred 208.6 273.3 Net paid loss and LAE related to: Current year 87.4 155.5 Prior years 117.3 135.6 Total paid 204.7 291.1 Net loss and LAE reserves, September 30 214.9 222.9 Plus reinsurance recoverable on unpaid losses 41.6 71.3 Gross loss and LAE reserves, September 30 $ 256.5 $ 294.2 Incurred losses and LAE attributable to prior accident years was a decrease of $0.6 million and $0.2 million for the nine months ended September 30, 2023 and 2022, respectively. For the nine months ended September 30, 2023, the development of incurred losses and LAE related to prior periods was a result of lower-than-expected reported losses on injury coverages, partially offset by losses on commutations of certain reinsurance agreements and higher-than-expected LAE on prior accident periods. For the nine months ended September 30, 2022, the development of incurred losses and LAE related to prior periods was a result of lower-than-expected LAE on prior accident period claims, partially offset by higher-than-expected reported losses on property damage and collision claims due to inflation. |
REINSURANCE
REINSURANCE | 9 Months Ended |
Sep. 30, 2023 | |
Insurance [Abstract] | |
REINSURANCE | REINSURANCE The following table reflects amounts affecting the condensed consolidated statements of operations and comprehensive loss for reinsurance for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Premiums written: Direct $ 192.7 $ 139.6 $ 444.6 $ 443.9 Assumed 31.5 11.1 59.3 34.1 Ceded (22.3) (81.0) (159.4) (264.5) Net premiums written $ 201.9 $ 69.7 $ 344.5 $ 213.5 Premiums earned: Direct $ 141.6 $ 144.5 $ 381.9 $ 469.3 Assumed 18.2 10.8 39.5 31.5 Ceded (59.8) (86.7) (197.5) (279.2) Net premiums earned $ 100.0 $ 68.6 $ 223.9 $ 221.6 Losses and LAE incurred: Direct $ 106.8 $ 126.1 $ 297.1 $ 430.0 Assumed 13.4 11.3 29.8 35.7 Ceded (34.4) (56.5) (118.3) (192.4) Net losses and LAE incurred $ 85.8 $ 80.9 $ 208.6 $ 273.3 During the third quarter of 2023, we commuted certain agreements with our reinsurers which resulted in $4.4 million of net premiums earned, $4.2 million of loss and loss adjustment expenses and $5.8 million of other insurance expense (benefit), respectively, on the condensed consolidated statements of operations and comprehensive loss. A portion of the loss and loss adjustment expenses is related to an allowance for credit losses of $2.8 million, that was established due to a commutation with one of our reinsurers as of September 30, 2023. Additionally, in connection with the commutation of certain agreements with reinsurers during the third quarter of 2023, we received cash and cash equivalents of $3.9 million, reinsurance recoverable and receivable decreased by $6.1 million, prepaid reinsurance premiums was reduced by $33.5 million and reinsurance premiums payable decreased by $30.2 million all of which are reported within the condensed consolidated balance sheets. In the event that all or any of the reinsuring companies might be unable to meet their obligations under existing reinsurance agreements, we would be liable to the policyholder for such defaulted amounts. Gross premiums written by state is as follows for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Amount % of Total Amount % of Total Amount % of Total Amount % of Total (dollars in millions) State: Texas $ 36.8 16.4 % $ 26.2 17.4 % $ 80.1 15.9 % $ 89.5 18.7 % Georgia 26.3 11.7 15.0 10.0 56.0 11.1 48.8 10.2 Colorado 15.3 6.8 10.3 6.8 37.8 7.5 30.8 6.4 Pennsylvania 12.1 5.4 9.1 6.0 29.0 5.8 26.8 5.6 South Carolina 11.8 5.3 4.5 3.0 28.6 5.7 16.4 3.4 Utah 8.3 3.7 8.0 5.3 22.9 4.5 24.1 5.0 Arizona 11.0 4.9 4.3 2.9 21.7 4.3 13.3 2.8 Ohio 8.4 3.7 3.9 2.6 16.9 3.4 11.8 2.5 Oklahoma 7.2 3.2 5.2 3.5 16.7 3.3 16.1 3.4 Missouri 8.7 3.9 4.3 2.9 16.1 3.2 14.2 3.0 All others states 78.3 35.0 59.9 39.6 178.1 35.3 186.2 39.0 Total $ 224.2 100.0 % $ 150.7 100.0 % $ 503.9 100.0 % $ 478.0 100.0 % |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBTIn January 2022, we entered into a $300.0 million five-year term loan, or Term Loan, with the principal amount due and payable upon maturity on January 27, 2027. Interest is payable quarterly and is determined on a floating interest rate currently calculated on the Secured Overnight Financing Rate, or SOFR, with a 1.0% floor, plus 9.0%. The following summarizes the carrying value of long-term debt as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 (dollars in millions) Term Loan $ 300.0 $ 300.0 Accrued interest payable 7.9 7.3 Unamortized discount, debt issuance costs and warrants (9.6) (11.9) Total $ 298.3 $ 295.4 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The consolidated effective tax rate was zero for the three and nine months ended September 30, 2023 and 2022. The difference between these rates and the U.S. federal income tax rate of 21% was primarily due to a full valuation allowance on our U.S. deferred tax assets. As of September 30, 2023 and December 31, 2022, we did not have any unrecognized tax benefits for uncertain tax positions and had no interest or penalties related to uncertain tax positions. |
RESTRUCTURING COSTS
RESTRUCTURING COSTS | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING COSTS | RESTRUCTURING COSTS In 2022, we conducted strategic initiatives to reduce operating costs, improve efficiency, and increase focus on our strategic priorities. These initiatives resulted in restructuring actions that included a reduction in workforce levels, contract terminations, and in certain instances, a reduction in office space. These restructuring actions include the following costs: Employee costs —consist of severance, benefits, share-based compensation, and employee compensation expense dependent upon continuous employment for certain employees and related employee costs. Real estate exit costs —consist of real estate exit costs primarily related to accelerated amortization of right-of-use assets, leasehold improvements and furniture and fixtures. Other costs —primarily consist of contract termination costs incurred as part of our efforts to improve efficiency and reduce operating costs and accelerated expense for software that no longer has economic benefit. As of September 30, 2023, we expect to incur approximately $1.7 million of employee compensation expense, dependent upon continuous employment for certain employees, to be recognized ratably through the fourth quarter of 2023. We expect a cash expenditure related to these employee compensation costs in January 2024. As of September 30, 2023, except as discussed above, we do not expect to incur any additional material expenditures in future periods related to restructuring actions that have occurred. The following table displays restructuring costs recorded in general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss: Three Months Ended September 30, Nine Months Ended September 30, Cumulative Incurred Through September 30, 2023 2023 2022 2023 2022 (dollars in millions) Restructuring costs: Employee costs $ 1.8 $ — $ 5.9 $ 5.6 $ 21.4 Real estate exit costs — — — 2.1 2.1 Other costs 0.1 — 3.5 0.7 4.5 Total restructuring costs $ 1.9 $ — $ 9.4 $ 8.4 $ 28.0 Employee costs Other costs Total liability (dollars in millions) Restructuring activity: Restructuring liability as of January 1, 2023 $ 3.1 $ 0.1 $ 3.2 Expense incurred 5.5 3.4 8.9 Payments (2.0) (3.5) (5.5) Restructuring liability as of September 30, 2023 $ 6.6 $ — $ 6.6 |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Warrants In October 2021, we issued Carvana eight tranches of warrants, comprised of three tranches of “short-term warrants” and five tranches of “long-term warrants,” with the opportunity to purchase a maximum of 7.2 million shares of Class A common stock. As of September 30, 2023, we determined the remaining unvested short-term warrants were probable of vesting. Under that scenario, it is not a possible outcome for the long-term warrants to also vest, so they are considered not probable of vesting. We recognized warrant compensation expense related to these equity-classified warrants based on progress toward completing the integrated automobile insurance solution for Carvana’s online buying platform, or the Integrated Platform, and policies originating through the Integrated Platform. All of these warrants are out-of-the-money and therefore have no intrinsic value as of September 30, 2023. The following table displays warrant compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Warrant compensation expense: Sales and marketing $ — $ — $ — $ 8.8 Other insurance expense (benefit) 5.0 1.5 13.3 1.5 Total warrant compensation expense $ 5.0 $ 1.5 $ 13.3 $ 10.3 As of September 30, 2023, there was $7.8 million of unrecognized compensation cost related to warrants. The remaining costs are expected to be recognized over a period of approximately one year. Employee Share-Based Compensation We maintain an equity incentive plan, or the Plan, for the issuance and grant of equity awards (restricted stock, restricted stock units, or RSUs, PSUs, and incentive and nonqualified stock options) to our officers, directors, employees and certain advisors. As of September 30, 2023, we had 1.2 million common shares available for issuance under the Plan. The following table displays share-based compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Share-based compensation expense: Loss and loss adjustment expenses $ 0.2 $ 0.2 $ 0.5 $ 0.6 Sales and marketing 0.1 0.3 0.3 0.7 Other insurance expense (benefit) 0.1 0.3 0.4 0.8 Technology and development 0.9 1.1 2.4 3.1 General and administrative 3.4 5.9 8.8 16.6 Total share-based compensation expense $ 4.7 $ 7.8 $ 12.4 $ 21.8 The following table provides total share-based compensation expense by type of award: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Share-based compensation expense: Restricted stock unit expense $ 4.4 $ 7.4 $ 11.4 $ 20.5 Performance-based restricted stock unit expense 0.1 — 0.1 — Stock option expense 0.2 0.4 0.9 1.3 Total share-based compensation expense $ 4.7 $ 7.8 $ 12.4 $ 21.8 As of September 30, 2023, there was $1.2 million, $25.3 million, and $2.2 million of unrecognized compensation cost related to unvested stock options, RSUs, and PSUs, respectively. The remaining costs are expected to be recognized over a period of approximately three years for unvested stock options and four years for RSUs and PSUs. Performance-Based Restricted Stock Units The fair value of the PSUs is estimated on the date of grant using a Monte Carlo simulation with Geometric Brownian Motion that uses certain inputs, assumptions and estimates, as follows: expected term of approximately five years, based on the contractual term of the PSUs; risk-free interest rate of 4.06%, based on U.S. Constant Maturity Yield Curve over a similar term; dividend rate of 0.0%, based on our historical and expected future dividend payouts; and volatility of 76%, and other factors. The following table provides other key terms of the PSUs: Performance-Based Restricted Stock Units Stock Price Goals Shares Issued Grant Date Fair Value per Share (in millions, except per share amounts) Tranches: Tranche 1 $ 16.76 — $ 7.69 Tranche 2 25.14 0.1 6.70 Tranche 3 33.52 0.1 5.87 Tranche 4 $ 41.90 0.2 $ 5.10 0.4 Restricted Stock Units and Performance-Based Restricted Stock Units A summary of RSU and PSU activity for the nine months ended September 30, 2023 is as follows: Nine Months Ended September 30, 2023 Restricted Stock Units and Performance-Based Restricted Stock Units Number of Shares Weighted-Average Aggregate Intrinsic Value (in millions, except per share amounts) Nonvested at January 1, 2023 1.1 $ 51.81 $ 5.0 Granted 1.6 6.62 Vested (0.5) 50.44 2.8 Forfeited, expired or canceled (0.2) 53.75 Nonvested at September 30, 2023 2.0 $ 15.79 $ 18.9 Stock Options A summary of option activity for the nine months ended September 30, 2023 is as follows: Nine Months Ended September 30, 2023 Options Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in millions, except exercise price and term amounts) Outstanding and exercisable at January 1, 2023 0.2 $ 38.15 5.63 $ 0.2 Granted — 8.94 Exercised — — — Forfeited, expired or canceled (0.1) 44.86 Outstanding and exercisable at September 30, 2023 0.1 $ 33.74 4.53 $ 0.5 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES From time to time, we are party to litigation and legal proceedings relating to our business operations. Except as disclosed below, we do not believe that we are party to any current or pending legal action that could reasonably be expected to have a material adverse effect on our financial condition or results of operations and cash flow. On December 19, 2022, a purported class action complaint was filed against the Company’s subsidiary, Root Insurance Company, in the U.S. District Court for the Western District of Texas (Case No. 1:22-cv-01328-LY) by an individual on her behalf and further claiming to represent a putative class of insureds. The complaint alleges that Root Insurance Company breached its insurance contract and violated specific provisions of the Texas Prompt Payment of Claims Act for an alleged failure to include sales tax in total loss vehicle settlements. The complaint seeks damages to include payment of alleged benefits owed under the policy, in addition to pre- and post-judgment interest and attorneys fees on behalf of the named plaintiff and the putative class members. Root Insurance Company’s motion to dismiss the claims set forth in the complaint was granted and the lawsuit was dismissed with prejudice on August 22, 2023, which dismissal has been appealed. The Company believes that the claims in this lawsuit are without merit and intends to defend against them vigorously. The lawsuit is in its early stages. Therefore, at this time, we cannot predict the outcome or estimate the likelihood or magnitude of our possible or potential loss contingency. On June 27, 2022, a verified shareholder derivative complaint was filed against certain of the Company’s current and former officers and directors in the U.S. District Court for the District of Delaware (Case No. 1:22- cv-00865). The Company was named as a nominal defendant. The complaint alleges that defendants made false or misleading statements and omissions of purportedly material fact, in violation of Section 10(b) of the Securities Exchange Act of 1934, or the Exchange Act, and Rule 10b-5 thereunder, breached their fiduciary duties and/or aided and abetted the breach of fiduciary duties, were unjustly enriched, wasted corporate assets, and are liable under Section 11(f) of the Securities Act of 1933, or the Securities Act, in connection with and following the Company’s initial public offering. The complaint seeks unspecified damages. The Company believes that the claims in this lawsuit are without merit and intends to defend against them vigorously. The lawsuit is currently stayed pending final resolution of the below matter and, at this time, we cannot predict the outcome or estimate the likelihood or magnitude of our possible or potential loss contingency. On March 19, 2021, a purported class action complaint was filed against the Company and certain of its current and former officers and directors in the U.S. District Court for the Southern District of Ohio (Case No. 2:21-cv-01197) on behalf of certain Root shareholders. The complaint alleges that defendants made false or misleading statements and omissions of purportedly material fact, in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 thereunder, and of Sections 11 and 15 of the Securities Act in connection with and following the Company’s initial public offering. The complaint seeks unspecified damages. The defendants’ motion to dismiss the claims set forth in the complaint was granted and the lawsuit was dismissed with prejudice on March 31, 2023, which dismissal has been appealed. The Company believes that the claims in this lawsuit are without merit and intends to defend against them vigorously. The lawsuit is in the early stages and, at this time, we cannot predict the outcome or estimate the likelihood or magnitude of our possible or potential loss contingency. We are contingently liable for possible future assessments under regulatory requirements for insolvencies and impairments of unaffiliated insurance companies. |
OTHER COMPREHENSIVE LOSS AND AC
OTHER COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
OTHER COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME | OTHER COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME The following table presents the changes in our accumulated other comprehensive (loss) income, or AOCI, for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Beginning balance $ (5.9) $ (4.6) $ (5.8) $ 0.4 Other comprehensive loss before reclassifications (0.7) (2.3) (0.8) (7.4) Net realized losses on investments reclassified from AOCI to net loss — — — 0.1 Other comprehensive loss (0.7) (2.3) (0.8) (7.3) Ending balance $ (6.6) $ (6.9) $ (6.6) $ (6.9) |
LOSS PER SHARE
LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
LOSS PER SHARE | LOSS PER SHARE The following table displays the computation of basic and diluted loss per share for both Class A and Class B common stock for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in millions, except per share amounts) Net loss $ (45.8) $ (66.4) $ (123.4) $ (239.4) Weighted-average common shares outstanding: basic and diluted (both Class A and B) 14.5 14.1 14.4 14.0 Loss per common share: basic and diluted (both Class A and B) $ (3.16) $ (4.71) $ (8.57) $ (17.10) We excluded the following potentially dilutive common stock equivalents, presented based on amounts outstanding at each period end, from the computation of diluted loss per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect: As of September 30, 2023 2022 (in millions) Options to purchase common stock 0.1 0.2 Nonvested shares subject to repurchase 0.1 0.1 Restricted stock units and performance-based restricted stock units 2.0 1.3 Redeemable convertible preferred stock (as converted to common stock) 0.8 0.8 Warrants to purchase common stock 7.7 7.7 Total 10.7 10.1 |
GEOGRAPHICAL BREAKDOWN OF GROSS
GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN | 9 Months Ended |
Sep. 30, 2023 | |
Insurance [Abstract] | |
GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN | REINSURANCE The following table reflects amounts affecting the condensed consolidated statements of operations and comprehensive loss for reinsurance for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Premiums written: Direct $ 192.7 $ 139.6 $ 444.6 $ 443.9 Assumed 31.5 11.1 59.3 34.1 Ceded (22.3) (81.0) (159.4) (264.5) Net premiums written $ 201.9 $ 69.7 $ 344.5 $ 213.5 Premiums earned: Direct $ 141.6 $ 144.5 $ 381.9 $ 469.3 Assumed 18.2 10.8 39.5 31.5 Ceded (59.8) (86.7) (197.5) (279.2) Net premiums earned $ 100.0 $ 68.6 $ 223.9 $ 221.6 Losses and LAE incurred: Direct $ 106.8 $ 126.1 $ 297.1 $ 430.0 Assumed 13.4 11.3 29.8 35.7 Ceded (34.4) (56.5) (118.3) (192.4) Net losses and LAE incurred $ 85.8 $ 80.9 $ 208.6 $ 273.3 During the third quarter of 2023, we commuted certain agreements with our reinsurers which resulted in $4.4 million of net premiums earned, $4.2 million of loss and loss adjustment expenses and $5.8 million of other insurance expense (benefit), respectively, on the condensed consolidated statements of operations and comprehensive loss. A portion of the loss and loss adjustment expenses is related to an allowance for credit losses of $2.8 million, that was established due to a commutation with one of our reinsurers as of September 30, 2023. Additionally, in connection with the commutation of certain agreements with reinsurers during the third quarter of 2023, we received cash and cash equivalents of $3.9 million, reinsurance recoverable and receivable decreased by $6.1 million, prepaid reinsurance premiums was reduced by $33.5 million and reinsurance premiums payable decreased by $30.2 million all of which are reported within the condensed consolidated balance sheets. In the event that all or any of the reinsuring companies might be unable to meet their obligations under existing reinsurance agreements, we would be liable to the policyholder for such defaulted amounts. Gross premiums written by state is as follows for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Amount % of Total Amount % of Total Amount % of Total Amount % of Total (dollars in millions) State: Texas $ 36.8 16.4 % $ 26.2 17.4 % $ 80.1 15.9 % $ 89.5 18.7 % Georgia 26.3 11.7 15.0 10.0 56.0 11.1 48.8 10.2 Colorado 15.3 6.8 10.3 6.8 37.8 7.5 30.8 6.4 Pennsylvania 12.1 5.4 9.1 6.0 29.0 5.8 26.8 5.6 South Carolina 11.8 5.3 4.5 3.0 28.6 5.7 16.4 3.4 Utah 8.3 3.7 8.0 5.3 22.9 4.5 24.1 5.0 Arizona 11.0 4.9 4.3 2.9 21.7 4.3 13.3 2.8 Ohio 8.4 3.7 3.9 2.6 16.9 3.4 11.8 2.5 Oklahoma 7.2 3.2 5.2 3.5 16.7 3.3 16.1 3.4 Missouri 8.7 3.9 4.3 2.9 16.1 3.2 14.2 3.0 All others states 78.3 35.0 59.9 39.6 178.1 35.3 186.2 39.0 Total $ 224.2 100.0 % $ 150.7 100.0 % $ 503.9 100.0 % $ 478.0 100.0 % |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation —In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. All such adjustments are of a normal and recurring nature. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission, or SEC, on February 22, 2023. |
Basis of Consolidation | Basis of Consolidation —The unaudited condensed consolidated financial statements include the accounts of Root, Inc. and its subsidiaries, all of which are wholly owned. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. All intercompany accounts and transactions have been eliminated. |
Use of Estimates | Use of Estimates —The preparation of the unaudited condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in our unaudited condensed consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, or LAE, valuation allowances for income taxes and allowance for expected credit losses on premium receivables and reinsurance recoverables. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following tables present the effect of the revision on the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2022, condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity and condensed consolidated statement of cash flows as of and for the nine months ended September 30, 2022. Three Months Ended September 30, 2022 (unaudited) Nine Months Ended September 30, 2022 (unaudited) As reported Adjustments As Corrected As reported Adjustments As Corrected (in millions, except per share amounts) Condensed consolidated statements of operations and comprehensive loss: Sales and marketing $ 5.7 $ 2.4 $ 8.1 $ 45.8 $ (1.0) $ 44.8 General and administrative 26.4 — 26.4 86.3 10.1 96.4 Total operating expenses 128.4 2.4 130.8 445.8 9.1 454.9 Operating loss (54.7) (2.4) (57.1) (206.3) (9.1) (215.4) Loss before income tax expense (64.0) (2.4) (66.4) (230.3) (9.1) (239.4) Net loss (64.0) (2.4) (66.4) (230.3) (9.1) (239.4) Comprehensive loss $ (66.3) $ (2.4) $ (68.7) $ (237.6) $ (9.1) $ (246.7) Weighted-average common shares outstanding: basic and diluted (both Class A and B) 14.1 14.1 14.0 14.0 Loss per common share: basic and diluted (both Class A and B) $ (4.54) $ (4.71) $ (16.45) $ (17.10) As of September 30, 2022 (unaudited) As reported Adjustments As Corrected (in millions) Condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity: Accumulated loss $ (1,500.4) $ (9.1) $ (1,509.5) Total stockholders’ equity $ 330.9 $ (9.1) $ 321.8 Nine Months Ended September 30, 2022 (unaudited) As reported Adjustments As Corrected (in millions) Condensed consolidated statement of cash flows: Net loss $ (230.3) $ (9.1) $ (239.4) Other assets (11.1) 9.1 (2.0) Net cash used in operating activities $ (163.9) $ — $ (163.9) |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amount in the condensed consolidated statements of cash flows: As of September 30, December 31, 2023 2022 (dollars in millions) Cash and cash equivalents $ 635.3 $ 762.1 Restricted cash 1.0 1.0 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 636.3 $ 763.1 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of AFS Debt Securities | The amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities at September 30, 2023 and December 31, 2022 are as follows: September 30, 2023 Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value (dollars in millions) Fixed maturities: U.S. Treasury securities and agencies $ 16.8 $ — $ — $ (0.4) $ 16.4 Municipal securities 25.6 — — (1.3) 24.3 Corporate debt securities 69.4 — — (2.9) 66.5 Residential mortgage-backed securities 12.3 — — (0.5) 11.8 Commercial mortgage-backed securities 31.0 — — (1.3) 29.7 Other debt obligations 16.0 — — (0.2) 15.8 Total fixed maturities 171.1 — — (6.6) 164.5 Short-term investments 2.6 — — — 2.6 Total $ 173.7 $ — $ — $ (6.6) $ 167.1 December 31, 2022 Amortized Cost Allowance for Expected Credit Losses Gross Unrealized Gains Gross Unrealized Losses Fair Value (dollars in millions) Fixed maturities: U.S. Treasury securities and agencies $ 11.3 $ — $ — $ (0.3) $ 11.0 Municipal securities 21.4 — — (1.2) 20.2 Corporate debt securities 60.5 — — (2.7) 57.8 Residential mortgage-backed securities 5.5 — — (0.3) 5.2 Commercial mortgage-backed securities 24.4 — — (1.2) 23.2 Other debt obligations 11.1 — 0.1 (0.2) 11.0 Total fixed maturities 134.2 — 0.1 (5.9) 128.4 Short-term investments 0.4 — — — 0.4 Total $ 134.6 $ — $ 0.1 $ (5.9) $ 128.8 The following table reflects the gross and net realized gains and losses on short-term investments, available-for-sale fixed maturities and other investments that have been included in the condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Realized gains on investments $ — $ — $ — $ 1.2 Realized losses on investments — — — (0.1) Net realized gains on investments $ — $ — $ — $ 1.1 The following table sets forth the amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities by contractual maturity at September 30, 2023: September 30, 2023 Amortized Cost Fair Value (dollars in millions) Due in one year or less $ 33.3 $ 32.8 Due after one year through five years 102.3 98.1 Due five years through 10 years 21.4 20.4 Due after 10 years 16.7 15.8 Total $ 173.7 $ 167.1 |
Schedule of Unrealized Losses | The following tables reflect the gross unrealized losses and fair value of short-term investments and available-for-sale fixed maturity securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2023 and December 31, 2022: September 30, 2023 Less than 12 Months 12 Months or More Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized (dollars in millions) Fixed maturities: U.S. Treasury securities and agencies $ 10.2 $ (0.2) $ 6.2 $ (0.2) $ 16.4 $ (0.4) Municipal securities 7.9 (0.2) 15.7 (1.1) 23.6 (1.3) Corporate debt securities 27.1 (0.8) 39.3 (2.1) 66.4 (2.9) Residential mortgage-backed securities 8.5 (0.2) 2.7 (0.3) 11.2 (0.5) Commercial mortgage-backed securities 13.5 (0.4) 15.8 (0.9) 29.3 (1.3) Other debt obligations 9.5 (0.1) 3.8 (0.1) 13.3 (0.2) Total fixed maturities 76.7 (1.9) 83.5 (4.7) 160.2 (6.6) Short-term investments 1.1 — — — 1.1 — Total $ 77.8 $ (1.9) $ 83.5 $ (4.7) $ 161.3 $ (6.6) December 31, 2022 Less than 12 Months 12 Months or More Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized (dollars in millions) Fixed maturities: U.S. Treasury securities and agencies $ 6.9 $ (0.1) $ 4.1 $ (0.2) $ 11.0 $ (0.3) Municipal securities 11.5 (0.5) 8.2 (0.7) 19.7 (1.2) Corporate debt securities 45.3 (1.6) 11.5 (1.1) 56.8 (2.7) Residential mortgage-backed securities 2.2 — 1.9 (0.3) 4.1 (0.3) Commercial mortgage-backed securities 18.3 (0.8) 4.6 (0.4) 22.9 (1.2) Other debt obligations 6.8 (0.2) — — 6.8 (0.2) Total fixed maturities 91.0 (3.2) 30.3 (2.7) 121.3 (5.9) Short-term investments 0.1 — — — 0.1 — Total $ 91.1 $ (3.2) $ 30.3 $ (2.7) $ 121.4 $ (5.9) |
Schedule of Net Investment Income | The following table sets forth the components of net investment income for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Interest on bonds $ 1.4 $ 0.6 $ 3.3 $ 1.7 Interest on deposits and cash equivalents 7.9 0.6 19.8 1.2 Total 9.3 1.2 23.1 2.9 Investment expense (0.3) (0.3) (0.6) (0.7) Net investment income $ 9.0 $ 0.9 $ 22.5 $ 2.2 |
Schedule of Credit Ratings | The following tables summarize the credit ratings of short-term investments and available-for-sale fixed maturity securities at September 30, 2023 and December 31, 2022: September 30, 2023 Amortized Cost Fair Value % of Total (dollars in millions) S&P Global rating or equivalent AAA $ 51.2 $ 49.3 29.5 % AA+, AA, AA-, A-1 62.4 60.2 36.0 A+, A, A- 46.3 44.2 26.5 BBB+, BBB, BBB- 13.8 13.4 8.0 Total $ 173.7 $ 167.1 100.0 % December 31, 2022 Amortized Cost Fair Value % of Total (dollars in millions) S&P Global rating or equivalent AAA $ 62.5 $ 59.9 46.5 % AA+, AA, AA-, A-1 19.9 19.1 14.8 A+, A, A- 38.4 36.5 28.3 BBB+, BBB, BBB- 13.8 13.3 10.4 Total $ 134.6 $ 128.8 100.0 % |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value | The following tables provide information about our financial assets measured and reported at fair value as of September 30, 2023 and December 31, 2022: September 30, 2023 Level 1 Level 2 Level 3 Total (dollars in millions) Assets Fixed maturities: U.S. Treasury securities and agencies $ 15.4 $ 1.0 $ — $ 16.4 Municipal securities — 24.3 — 24.3 Corporate debt securities — 66.5 — 66.5 Residential mortgage-backed securities — 11.8 — 11.8 Commercial mortgage-backed securities — 29.7 — 29.7 Other debt obligations — 15.8 — 15.8 Total fixed maturities 15.4 149.1 — 164.5 Short-term investments 2.4 0.2 — 2.6 Cash equivalents 363.6 — — 363.6 Total assets at fair value $ 381.4 $ 149.3 $ — $ 530.7 December 31, 2022 Level 1 Level 2 Level 3 Total (dollars in millions) Assets Fixed maturities: U.S. Treasury securities and agencies $ 9.2 $ 1.8 $ — $ 11.0 Municipal securities — 20.2 — 20.2 Corporate debt securities — 57.8 — 57.8 Residential mortgage-backed securities — 5.2 — 5.2 Commercial mortgage-backed securities — 23.2 — 23.2 Other debt obligations — 11.0 — 11.0 Total fixed maturities 9.2 119.2 — 128.4 Short-term investments — 0.4 — 0.4 Cash equivalents 487.3 — — 487.3 Total assets at fair value $ 496.5 $ 119.6 $ — $ 616.1 |
Schedule of Carrying Amounts and Fair Values of Financial Instruments | As of September 30, 2023 and December 31, 2022, the carrying amounts and fair values of these financial instruments were as follows: Carrying Amount as of September 30, 2023 Estimated Fair Value as of September 30, 2023 Carrying Amount as of December 31, 2022 Estimated Fair Value as of December 31, 2022 (dollars in millions) Long-term debt $ 298.3 $ 304.8 $ 295.4 $ 309.7 |
LOSS AND LOSS ADJUSTMENT EXPE_2
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Insurance [Abstract] | |
Schedule of Reconciliation of Reserve Balances for Loss and LAE, Net of Reinsurance | The following provides a reconciliation of the beginning and ending reserve balances for loss and LAE, net of reinsurance: Nine Months Ended September 30, 2023 2022 (dollars in millions) Gross loss and LAE reserves, January 1 $ 287.4 $ 320.2 Reinsurance recoverable on unpaid losses (76.4) (79.5) Net loss and LAE reserves, January 1 211.0 240.7 Net incurred loss and LAE related to: Current year 209.2 273.5 Prior years (0.6) (0.2) Total incurred 208.6 273.3 Net paid loss and LAE related to: Current year 87.4 155.5 Prior years 117.3 135.6 Total paid 204.7 291.1 Net loss and LAE reserves, September 30 214.9 222.9 Plus reinsurance recoverable on unpaid losses 41.6 71.3 Gross loss and LAE reserves, September 30 $ 256.5 $ 294.2 |
REINSURANCE (Tables)
REINSURANCE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Insurance [Abstract] | |
Schedule of Comprehensive Loss For Reinsurance | The following table reflects amounts affecting the condensed consolidated statements of operations and comprehensive loss for reinsurance for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Premiums written: Direct $ 192.7 $ 139.6 $ 444.6 $ 443.9 Assumed 31.5 11.1 59.3 34.1 Ceded (22.3) (81.0) (159.4) (264.5) Net premiums written $ 201.9 $ 69.7 $ 344.5 $ 213.5 Premiums earned: Direct $ 141.6 $ 144.5 $ 381.9 $ 469.3 Assumed 18.2 10.8 39.5 31.5 Ceded (59.8) (86.7) (197.5) (279.2) Net premiums earned $ 100.0 $ 68.6 $ 223.9 $ 221.6 Losses and LAE incurred: Direct $ 106.8 $ 126.1 $ 297.1 $ 430.0 Assumed 13.4 11.3 29.8 35.7 Ceded (34.4) (56.5) (118.3) (192.4) Net losses and LAE incurred $ 85.8 $ 80.9 $ 208.6 $ 273.3 Gross premiums written by state is as follows for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Amount % of Total Amount % of Total Amount % of Total Amount % of Total (dollars in millions) State: Texas $ 36.8 16.4 % $ 26.2 17.4 % $ 80.1 15.9 % $ 89.5 18.7 % Georgia 26.3 11.7 15.0 10.0 56.0 11.1 48.8 10.2 Colorado 15.3 6.8 10.3 6.8 37.8 7.5 30.8 6.4 Pennsylvania 12.1 5.4 9.1 6.0 29.0 5.8 26.8 5.6 South Carolina 11.8 5.3 4.5 3.0 28.6 5.7 16.4 3.4 Utah 8.3 3.7 8.0 5.3 22.9 4.5 24.1 5.0 Arizona 11.0 4.9 4.3 2.9 21.7 4.3 13.3 2.8 Ohio 8.4 3.7 3.9 2.6 16.9 3.4 11.8 2.5 Oklahoma 7.2 3.2 5.2 3.5 16.7 3.3 16.1 3.4 Missouri 8.7 3.9 4.3 2.9 16.1 3.2 14.2 3.0 All others states 78.3 35.0 59.9 39.6 178.1 35.3 186.2 39.0 Total $ 224.2 100.0 % $ 150.7 100.0 % $ 503.9 100.0 % $ 478.0 100.0 % |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The following summarizes the carrying value of long-term debt as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 (dollars in millions) Term Loan $ 300.0 $ 300.0 Accrued interest payable 7.9 7.3 Unamortized discount, debt issuance costs and warrants (9.6) (11.9) Total $ 298.3 $ 295.4 |
RESTRUCTURING COSTS (Tables)
RESTRUCTURING COSTS (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs | The following table displays restructuring costs recorded in general and administrative expenses on the condensed consolidated statements of operations and comprehensive loss: Three Months Ended September 30, Nine Months Ended September 30, Cumulative Incurred Through September 30, 2023 2023 2022 2023 2022 (dollars in millions) Restructuring costs: Employee costs $ 1.8 $ — $ 5.9 $ 5.6 $ 21.4 Real estate exit costs — — — 2.1 2.1 Other costs 0.1 — 3.5 0.7 4.5 Total restructuring costs $ 1.9 $ — $ 9.4 $ 8.4 $ 28.0 Employee costs Other costs Total liability (dollars in millions) Restructuring activity: Restructuring liability as of January 1, 2023 $ 3.1 $ 0.1 $ 3.2 Expense incurred 5.5 3.4 8.9 Payments (2.0) (3.5) (5.5) Restructuring liability as of September 30, 2023 $ 6.6 $ — $ 6.6 |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense | The following table displays warrant compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Warrant compensation expense: Sales and marketing $ — $ — $ — $ 8.8 Other insurance expense (benefit) 5.0 1.5 13.3 1.5 Total warrant compensation expense $ 5.0 $ 1.5 $ 13.3 $ 10.3 The following table displays share-based compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Share-based compensation expense: Loss and loss adjustment expenses $ 0.2 $ 0.2 $ 0.5 $ 0.6 Sales and marketing 0.1 0.3 0.3 0.7 Other insurance expense (benefit) 0.1 0.3 0.4 0.8 Technology and development 0.9 1.1 2.4 3.1 General and administrative 3.4 5.9 8.8 16.6 Total share-based compensation expense $ 4.7 $ 7.8 $ 12.4 $ 21.8 The following table provides total share-based compensation expense by type of award: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Share-based compensation expense: Restricted stock unit expense $ 4.4 $ 7.4 $ 11.4 $ 20.5 Performance-based restricted stock unit expense 0.1 — 0.1 — Stock option expense 0.2 0.4 0.9 1.3 Total share-based compensation expense $ 4.7 $ 7.8 $ 12.4 $ 21.8 |
Summary of Performance Stock Units | The following table provides other key terms of the PSUs: Performance-Based Restricted Stock Units Stock Price Goals Shares Issued Grant Date Fair Value per Share (in millions, except per share amounts) Tranches: Tranche 1 $ 16.76 — $ 7.69 Tranche 2 25.14 0.1 6.70 Tranche 3 33.52 0.1 5.87 Tranche 4 $ 41.90 0.2 $ 5.10 0.4 |
Summary of RSU Activity | A summary of RSU and PSU activity for the nine months ended September 30, 2023 is as follows: Nine Months Ended September 30, 2023 Restricted Stock Units and Performance-Based Restricted Stock Units Number of Shares Weighted-Average Aggregate Intrinsic Value (in millions, except per share amounts) Nonvested at January 1, 2023 1.1 $ 51.81 $ 5.0 Granted 1.6 6.62 Vested (0.5) 50.44 2.8 Forfeited, expired or canceled (0.2) 53.75 Nonvested at September 30, 2023 2.0 $ 15.79 $ 18.9 |
Summary of Option Activity | A summary of option activity for the nine months ended September 30, 2023 is as follows: Nine Months Ended September 30, 2023 Options Number of Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value (in millions, except exercise price and term amounts) Outstanding and exercisable at January 1, 2023 0.2 $ 38.15 5.63 $ 0.2 Granted — 8.94 Exercised — — — Forfeited, expired or canceled (0.1) 44.86 Outstanding and exercisable at September 30, 2023 0.1 $ 33.74 4.53 $ 0.5 |
OTHER COMPREHENSIVE LOSS AND _2
OTHER COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Schedule of AOCI | The following table presents the changes in our accumulated other comprehensive (loss) income, or AOCI, for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Beginning balance $ (5.9) $ (4.6) $ (5.8) $ 0.4 Other comprehensive loss before reclassifications (0.7) (2.3) (0.8) (7.4) Net realized losses on investments reclassified from AOCI to net loss — — — 0.1 Other comprehensive loss (0.7) (2.3) (0.8) (7.3) Ending balance $ (6.6) $ (6.9) $ (6.6) $ (6.9) |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table displays the computation of basic and diluted loss per share for both Class A and Class B common stock for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (in millions, except per share amounts) Net loss $ (45.8) $ (66.4) $ (123.4) $ (239.4) Weighted-average common shares outstanding: basic and diluted (both Class A and B) 14.5 14.1 14.4 14.0 Loss per common share: basic and diluted (both Class A and B) $ (3.16) $ (4.71) $ (8.57) $ (17.10) |
Schedule of Anti-Dilutive Securities | We excluded the following potentially dilutive common stock equivalents, presented based on amounts outstanding at each period end, from the computation of diluted loss per share attributable to common shareholders for the periods indicated because including them would have had an anti-dilutive effect: As of September 30, 2023 2022 (in millions) Options to purchase common stock 0.1 0.2 Nonvested shares subject to repurchase 0.1 0.1 Restricted stock units and performance-based restricted stock units 2.0 1.3 Redeemable convertible preferred stock (as converted to common stock) 0.8 0.8 Warrants to purchase common stock 7.7 7.7 Total 10.7 10.1 |
GEOGRAPHICAL BREAKDOWN OF GRO_2
GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Insurance [Abstract] | |
Schedule of Direct and Assumed Premiums Written | The following table reflects amounts affecting the condensed consolidated statements of operations and comprehensive loss for reinsurance for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 (dollars in millions) Premiums written: Direct $ 192.7 $ 139.6 $ 444.6 $ 443.9 Assumed 31.5 11.1 59.3 34.1 Ceded (22.3) (81.0) (159.4) (264.5) Net premiums written $ 201.9 $ 69.7 $ 344.5 $ 213.5 Premiums earned: Direct $ 141.6 $ 144.5 $ 381.9 $ 469.3 Assumed 18.2 10.8 39.5 31.5 Ceded (59.8) (86.7) (197.5) (279.2) Net premiums earned $ 100.0 $ 68.6 $ 223.9 $ 221.6 Losses and LAE incurred: Direct $ 106.8 $ 126.1 $ 297.1 $ 430.0 Assumed 13.4 11.3 29.8 35.7 Ceded (34.4) (56.5) (118.3) (192.4) Net losses and LAE incurred $ 85.8 $ 80.9 $ 208.6 $ 273.3 Gross premiums written by state is as follows for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Amount % of Total Amount % of Total Amount % of Total Amount % of Total (dollars in millions) State: Texas $ 36.8 16.4 % $ 26.2 17.4 % $ 80.1 15.9 % $ 89.5 18.7 % Georgia 26.3 11.7 15.0 10.0 56.0 11.1 48.8 10.2 Colorado 15.3 6.8 10.3 6.8 37.8 7.5 30.8 6.4 Pennsylvania 12.1 5.4 9.1 6.0 29.0 5.8 26.8 5.6 South Carolina 11.8 5.3 4.5 3.0 28.6 5.7 16.4 3.4 Utah 8.3 3.7 8.0 5.3 22.9 4.5 24.1 5.0 Arizona 11.0 4.9 4.3 2.9 21.7 4.3 13.3 2.8 Ohio 8.4 3.7 3.9 2.6 16.9 3.4 11.8 2.5 Oklahoma 7.2 3.2 5.2 3.5 16.7 3.3 16.1 3.4 Missouri 8.7 3.9 4.3 2.9 16.1 3.2 14.2 3.0 All others states 78.3 35.0 59.9 39.6 178.1 35.3 186.2 39.0 Total $ 224.2 100.0 % $ 150.7 100.0 % $ 503.9 100.0 % $ 478.0 100.0 % |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) | Sep. 30, 2023 |
Root Insurance Company | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage (as percent) | 100% |
Root Property & Casualty Insurance Company | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage (as percent) | 100% |
Root Reinsurance Company, Ltd. | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage (as percent) | 100% |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Error Correction (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Condensed consolidated statements of operations and comprehensive loss: | ||||||||
Sales and marketing | $ 13.1 | $ 8.1 | $ 22.8 | $ 44.8 | ||||
General and administrative | 21 | 26.4 | 63.2 | 96.4 | ||||
Total operating expenses | 149.3 | 130.8 | 349.2 | 454.9 | ||||
Operating loss | (34) | (57.1) | (89) | (215.4) | ||||
Loss before income tax expense | (45.8) | (66.4) | (123.4) | (239.4) | ||||
Net loss | (45.8) | (66.4) | (123.4) | (239.4) | ||||
Comprehensive loss | $ (46.5) | $ (68.7) | $ (124.2) | $ (246.7) | ||||
Weighted-average common shares outstanding: basic (both Class A and B) (in shares) | 14.5 | 14.1 | 14.4 | 14 | ||||
Weighted-average common shares outstanding: diluted (both Class A and B) (in shares) | 14.5 | 14.1 | 14.4 | 14 | ||||
Loss per common share: basic (both Class A and B) (in dollars per share) | $ (3.16) | $ (4.71) | $ (8.57) | $ (17.10) | ||||
Loss per common share: diluted (both Class A and B) (in dollars per share) | $ (3.16) | $ (4.71) | $ (8.57) | $ (17.10) | ||||
Condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity: | ||||||||
Total stockholders’ equity | $ 177.1 | $ 321.8 | $ 177.1 | $ 321.8 | $ 214.4 | $ 277.1 | $ 381.3 | $ 536.4 |
Condensed consolidated statement of cash flows: | ||||||||
Net loss | (45.8) | (66.4) | (123.4) | (239.4) | ||||
Other assets | 10.6 | (2) | ||||||
Net cash used in operating activities | (79.7) | (163.9) | ||||||
Accumulated Loss | ||||||||
Condensed consolidated statements of operations and comprehensive loss: | ||||||||
Net loss | (45.8) | (66.4) | (123.4) | (239.4) | ||||
Condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity: | ||||||||
Total stockholders’ equity | (1,691.2) | (1,509.5) | (1,691.2) | (1,509.5) | $ (1,645.4) | $ (1,567.8) | $ (1,443.1) | $ (1,270.1) |
Condensed consolidated statement of cash flows: | ||||||||
Net loss | $ (45.8) | (66.4) | $ (123.4) | (239.4) | ||||
As reported | ||||||||
Condensed consolidated statements of operations and comprehensive loss: | ||||||||
Sales and marketing | 5.7 | 45.8 | ||||||
General and administrative | 26.4 | 86.3 | ||||||
Total operating expenses | 128.4 | 445.8 | ||||||
Operating loss | (54.7) | (206.3) | ||||||
Loss before income tax expense | (64) | (230.3) | ||||||
Net loss | (64) | (230.3) | ||||||
Comprehensive loss | $ (66.3) | $ (237.6) | ||||||
Weighted-average common shares outstanding: basic (both Class A and B) (in shares) | 14.1 | 14 | ||||||
Weighted-average common shares outstanding: diluted (both Class A and B) (in shares) | 14.1 | 14 | ||||||
Loss per common share: basic (both Class A and B) (in dollars per share) | $ (4.54) | $ (16.45) | ||||||
Loss per common share: diluted (both Class A and B) (in dollars per share) | $ (4.54) | $ (16.45) | ||||||
Condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity: | ||||||||
Total stockholders’ equity | $ 330.9 | $ 330.9 | ||||||
Condensed consolidated statement of cash flows: | ||||||||
Net loss | (64) | (230.3) | ||||||
Other assets | (11.1) | |||||||
Net cash used in operating activities | (163.9) | |||||||
As reported | Accumulated Loss | ||||||||
Condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity: | ||||||||
Total stockholders’ equity | (1,500.4) | (1,500.4) | ||||||
Adjustments | ||||||||
Condensed consolidated statements of operations and comprehensive loss: | ||||||||
Sales and marketing | 2.4 | (1) | ||||||
General and administrative | 0 | 10.1 | ||||||
Total operating expenses | 2.4 | 9.1 | ||||||
Operating loss | (2.4) | (9.1) | ||||||
Loss before income tax expense | (2.4) | (9.1) | ||||||
Net loss | (2.4) | (9.1) | ||||||
Comprehensive loss | (2.4) | (9.1) | ||||||
Condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity: | ||||||||
Total stockholders’ equity | (9.1) | (9.1) | ||||||
Condensed consolidated statement of cash flows: | ||||||||
Net loss | (2.4) | (9.1) | ||||||
Other assets | 9.1 | |||||||
Adjustments | Accumulated Loss | ||||||||
Condensed consolidated statement of redeemable convertible preferred stock and stockholders’ equity: | ||||||||
Total stockholders’ equity | $ (9.1) | $ (9.1) |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 635.3 | $ 762.1 | ||
Restricted cash | 1 | 1 | ||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 636.3 | $ 763.1 | $ 820.7 | $ 707 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) shares in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 consecutive_trading_day shares | Sep. 30, 2023 shares | |
Class A Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Consecutive trading days | consecutive_trading_day | 45 | |
Performance-based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | shares | 0.4 | 0.4 |
Volatility rate | 50% | 76% |
Weighted average volatility rate | 50% | |
Minimum | Performance-based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 1 year | |
Maximum | Performance-based RSUs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 years |
INVESTMENTS - Amortized Cost an
INVESTMENTS - Amortized Cost and Fair Value (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 173.7 | $ 134.6 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (6.6) | (5.9) |
Fair Value | 167.1 | 128.8 |
U.S. Treasury securities and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16.8 | 11.3 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.4) | (0.3) |
Fair Value | 16.4 | 11 |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 25.6 | 21.4 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1.3) | (1.2) |
Fair Value | 24.3 | 20.2 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 69.4 | 60.5 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (2.9) | (2.7) |
Fair Value | 66.5 | 57.8 |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 12.3 | 5.5 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (0.5) | (0.3) |
Fair Value | 11.8 | 5.2 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 31 | 24.4 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (1.3) | (1.2) |
Fair Value | 29.7 | 23.2 |
Other debt obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16 | 11.1 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (0.2) | (0.2) |
Fair Value | 15.8 | 11 |
Total fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 171.1 | 134.2 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (6.6) | (5.9) |
Fair Value | 164.5 | 128.4 |
Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2.6 | 0.4 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 2.6 | $ 0.4 |
INVESTMENTS - Unrealized Losses
INVESTMENTS - Unrealized Losses (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | $ 77.8 | $ 91.1 |
Less than 12 months, unrealized loss | (1.9) | (3.2) |
12 months or more, fair value | 83.5 | 30.3 |
12 months or more, unrealized loss | (4.7) | (2.7) |
Total, fair value | 161.3 | 121.4 |
Total, unrealized loss | (6.6) | (5.9) |
U.S. Treasury securities and agencies | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 10.2 | 6.9 |
Less than 12 months, unrealized loss | (0.2) | (0.1) |
12 months or more, fair value | 6.2 | 4.1 |
12 months or more, unrealized loss | (0.2) | (0.2) |
Total, fair value | 16.4 | 11 |
Total, unrealized loss | (0.4) | (0.3) |
Municipal securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 7.9 | 11.5 |
Less than 12 months, unrealized loss | (0.2) | (0.5) |
12 months or more, fair value | 15.7 | 8.2 |
12 months or more, unrealized loss | (1.1) | (0.7) |
Total, fair value | 23.6 | 19.7 |
Total, unrealized loss | (1.3) | (1.2) |
Corporate debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 27.1 | 45.3 |
Less than 12 months, unrealized loss | (0.8) | (1.6) |
12 months or more, fair value | 39.3 | 11.5 |
12 months or more, unrealized loss | (2.1) | (1.1) |
Total, fair value | 66.4 | 56.8 |
Total, unrealized loss | (2.9) | (2.7) |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 8.5 | 2.2 |
Less than 12 months, unrealized loss | (0.2) | 0 |
12 months or more, fair value | 2.7 | 1.9 |
12 months or more, unrealized loss | (0.3) | (0.3) |
Total, fair value | 11.2 | 4.1 |
Total, unrealized loss | (0.5) | (0.3) |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 13.5 | 18.3 |
Less than 12 months, unrealized loss | (0.4) | (0.8) |
12 months or more, fair value | 15.8 | 4.6 |
12 months or more, unrealized loss | (0.9) | (0.4) |
Total, fair value | 29.3 | 22.9 |
Total, unrealized loss | (1.3) | (1.2) |
Other debt obligations | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 9.5 | 6.8 |
Less than 12 months, unrealized loss | (0.1) | (0.2) |
12 months or more, fair value | 3.8 | 0 |
12 months or more, unrealized loss | (0.1) | 0 |
Total, fair value | 13.3 | 6.8 |
Total, unrealized loss | (0.2) | (0.2) |
Total fixed maturities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 76.7 | 91 |
Less than 12 months, unrealized loss | (1.9) | (3.2) |
12 months or more, fair value | 83.5 | 30.3 |
12 months or more, unrealized loss | (4.7) | (2.7) |
Total, fair value | 160.2 | 121.3 |
Total, unrealized loss | (6.6) | (5.9) |
Short-term investments | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 1.1 | 0.1 |
Less than 12 months, unrealized loss | 0 | 0 |
12 months or more, fair value | 0 | 0 |
12 months or more, unrealized loss | 0 | 0 |
Total, fair value | 1.1 | 0.1 |
Total, unrealized loss | $ 0 | $ 0 |
INVESTMENTS - Other Investments
INVESTMENTS - Other Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Other investments | $ 4,400,000 | $ 4,400,000 | $ 4,400,000 | ||
Realized gains on investments | $ 0 | $ 0 | $ 0 | $ 1,200,000 |
INVESTMENTS - Gross and Net Rea
INVESTMENTS - Gross and Net Realized Gains and Losses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Realized gains on investments | $ 0 | $ 0 | $ 0 | $ 1,200,000 |
Realized losses on investments | 0 | 0 | 0 | (100,000) |
Net realized gains on investments | $ 0 | $ 0 | $ 0 | $ 1,100,000 |
INVESTMENTS - Contractual Matur
INVESTMENTS - Contractual Maturity (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Due in one year or less | $ 33.3 | |
Due after one year through five years | 102.3 | |
Due five years through 10 years | 21.4 | |
Due after 10 years | 16.7 | |
Amortized Cost | 173.7 | $ 134.6 |
Fair Value | ||
Due in one year or less | 32.8 | |
Due after one year through five years | 98.1 | |
Due five years through 10 years | 20.4 | |
Due after 10 years | 15.8 | |
Total | $ 167.1 | $ 128.8 |
INVESTMENTS - Net Investment In
INVESTMENTS - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net Investment Income [Line Items] | ||||
Realized gain value | $ 9.3 | $ 1.2 | $ 23.1 | $ 2.9 |
Investment expense | (0.3) | (0.3) | (0.6) | (0.7) |
Net investment income | 9 | 0.9 | 22.5 | 2.2 |
Interest on bonds | ||||
Net Investment Income [Line Items] | ||||
Realized gain value | 1.4 | 0.6 | 3.3 | 1.7 |
Interest on deposits and cash equivalents | ||||
Net Investment Income [Line Items] | ||||
Realized gain value | $ 7.9 | $ 0.6 | $ 19.8 | $ 1.2 |
INVESTMENTS - Credit Ratings (D
INVESTMENTS - Credit Ratings (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 173.7 | $ 134.6 |
Fair Value | $ 167.1 | $ 128.8 |
AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 100% | 100% |
AAA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 51.2 | $ 62.5 |
Fair Value | $ 49.3 | $ 59.9 |
AAA | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 29.50% | 46.50% |
AA+, AA, AA-, A-1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 62.4 | $ 19.9 |
Fair Value | $ 60.2 | $ 19.1 |
AA+, AA, AA-, A-1 | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 36% | 14.80% |
A+, A, A- | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 46.3 | $ 38.4 |
Fair Value | $ 44.2 | $ 36.5 |
A+, A, A- | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 26.50% | 28.30% |
BBB+, BBB, BBB- | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 13.8 | $ 13.8 |
Fair Value | $ 13.4 | $ 13.3 |
BBB+, BBB, BBB- | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 8% | 10.40% |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Balance Sheet Grouping (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
AFS securities | $ 167.1 | $ 128.8 |
Cash equivalents | 363.6 | 487.3 |
Total assets at fair value | 530.7 | 616.1 |
U.S. Treasury securities and agencies | ||
Assets | ||
AFS securities | 16.4 | 11 |
Municipal securities | ||
Assets | ||
AFS securities | 24.3 | 20.2 |
Corporate debt securities | ||
Assets | ||
AFS securities | 66.5 | 57.8 |
Residential mortgage-backed securities | ||
Assets | ||
AFS securities | 11.8 | 5.2 |
Commercial mortgage-backed securities | ||
Assets | ||
AFS securities | 29.7 | 23.2 |
Other debt obligations | ||
Assets | ||
AFS securities | 15.8 | 11 |
Total fixed maturities | ||
Assets | ||
AFS securities | 164.5 | 128.4 |
Short-term investments | ||
Assets | ||
AFS securities | 2.6 | 0.4 |
Level 1 | ||
Assets | ||
Cash equivalents | 363.6 | 487.3 |
Total assets at fair value | 381.4 | 496.5 |
Level 1 | U.S. Treasury securities and agencies | ||
Assets | ||
AFS securities | 15.4 | 9.2 |
Level 1 | Municipal securities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 1 | Corporate debt securities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 1 | Residential mortgage-backed securities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 1 | Commercial mortgage-backed securities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 1 | Other debt obligations | ||
Assets | ||
AFS securities | 0 | 0 |
Level 1 | Total fixed maturities | ||
Assets | ||
AFS securities | 15.4 | 9.2 |
Level 1 | Short-term investments | ||
Assets | ||
AFS securities | 2.4 | 0 |
Level 2 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Total assets at fair value | 149.3 | 119.6 |
Level 2 | U.S. Treasury securities and agencies | ||
Assets | ||
AFS securities | 1 | 1.8 |
Level 2 | Municipal securities | ||
Assets | ||
AFS securities | 24.3 | 20.2 |
Level 2 | Corporate debt securities | ||
Assets | ||
AFS securities | 66.5 | 57.8 |
Level 2 | Residential mortgage-backed securities | ||
Assets | ||
AFS securities | 11.8 | 5.2 |
Level 2 | Commercial mortgage-backed securities | ||
Assets | ||
AFS securities | 29.7 | 23.2 |
Level 2 | Other debt obligations | ||
Assets | ||
AFS securities | 15.8 | 11 |
Level 2 | Total fixed maturities | ||
Assets | ||
AFS securities | 149.1 | 119.2 |
Level 2 | Short-term investments | ||
Assets | ||
AFS securities | 0.2 | 0.4 |
Level 3 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Total assets at fair value | 0 | 0 |
Level 3 | U.S. Treasury securities and agencies | ||
Assets | ||
AFS securities | 0 | 0 |
Level 3 | Municipal securities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 3 | Corporate debt securities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 3 | Residential mortgage-backed securities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 3 | Commercial mortgage-backed securities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 3 | Other debt obligations | ||
Assets | ||
AFS securities | 0 | 0 |
Level 3 | Total fixed maturities | ||
Assets | ||
AFS securities | 0 | 0 |
Level 3 | Short-term investments | ||
Assets | ||
AFS securities | $ 0 | $ 0 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Long Term Debt (Details) - Level 2 - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Carrying amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 298.3 | $ 295.4 |
Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 304.8 | $ 309.7 |
LOSS AND LOSS ADJUSTMENT EXPE_3
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Schedule of Reserve Balance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||||
Gross loss and LAE reserves, January 1 | $ 287.4 | $ 320.2 | ||||
Reinsurance recoverable on unpaid losses | (76.4) | (79.5) | ||||
Net loss and LAE reserves, January 1 | $ 214.9 | $ 222.9 | 214.9 | 222.9 | $ 211 | $ 240.7 |
Net incurred loss and LAE related to: | ||||||
Current year | 209.2 | 273.5 | ||||
Prior years | (0.6) | (0.2) | ||||
Total incurred | 85.8 | 80.9 | 208.6 | 273.3 | ||
Net paid loss and LAE related to: | ||||||
Current year | 87.4 | 155.5 | ||||
Prior years | 117.3 | 135.6 | ||||
Total paid | 204.7 | 291.1 | ||||
Net loss and LAE reserves, September 30 | 214.9 | 222.9 | 214.9 | 222.9 | ||
Plus reinsurance recoverable on unpaid losses | 41.6 | 71.3 | 41.6 | 71.3 | ||
Gross loss and LAE reserves, September 30 | $ 256.5 | $ 294.2 | $ 256.5 | $ 294.2 |
LOSS AND LOSS ADJUSTMENT EXPE_4
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Insurance [Abstract] | ||
Incurred losses and LAE attributable to prior accident years | $ 0.6 | $ 0.2 |
REINSURANCE (Details)
REINSURANCE (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Premiums written: | ||||
Direct | $ 192.7 | $ 139.6 | $ 444.6 | $ 443.9 |
Assumed | 31.5 | 11.1 | 59.3 | 34.1 |
Ceded | (22.3) | (81) | (159.4) | (264.5) |
Net premiums written | 201.9 | 69.7 | 344.5 | 213.5 |
Premiums earned: | ||||
Direct | 141.6 | 144.5 | 381.9 | 469.3 |
Assumed | 18.2 | 10.8 | 39.5 | 31.5 |
Ceded | (59.8) | (86.7) | (197.5) | (279.2) |
Net premiums earned | 100 | 68.6 | 223.9 | 221.6 |
Losses and LAE incurred: | ||||
Direct | 106.8 | 126.1 | 297.1 | 430 |
Assumed | 13.4 | 11.3 | 29.8 | 35.7 |
Ceded | (34.4) | (56.5) | (118.3) | (192.4) |
Net losses and LAE incurred | $ 85.8 | $ 80.9 | $ 208.6 | $ 273.3 |
REINSURANCE - Narrative (Detail
REINSURANCE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Effects of Reinsurance [Line Items] | ||||
Increase of net premiums earned | $ 4.4 | |||
Expense related to allowance for credit loss | 2.8 | |||
Cash and cash equivalents | 635.3 | $ 635.3 | $ 762.1 | |
Reinsurance recoverable and receivable | 8.5 | $ 19 | ||
Prepaid reinsurance premiums | 38.1 | 14.6 | ||
Reinsurance premiums payable | 48 | $ (8.8) | ||
Commutation of Certain Agreements | ||||
Effects of Reinsurance [Line Items] | ||||
Cash and cash equivalents | 3.9 | $ 3.9 | ||
Reinsurance recoverable and receivable | 6.1 | |||
Prepaid reinsurance premiums | 33.5 | |||
Reinsurance premiums payable | 30.2 | |||
Loss and loss adjustment expenses | ||||
Effects of Reinsurance [Line Items] | ||||
Incurred expense for commutations of certain reinsurance agreements | 4.2 | |||
Other insurance expense (benefit) | ||||
Effects of Reinsurance [Line Items] | ||||
Incurred expense for commutations of certain reinsurance agreements | $ 5.8 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - Term Loan - USD ($) | 1 Months Ended | |
Jan. 27, 2022 | Jan. 31, 2022 | |
SOFR | ||
Debt Instrument [Line Items] | ||
Debt instrument, floor interest rate (in percent) | 1% | |
Variable rate percentage (in percent) | 9% | |
Secured debt | ||
Debt Instrument [Line Items] | ||
Debt amount | $ 300,000,000 | |
Debt instrument, term | 5 years |
LONG-TERM DEBT - Schedule Of De
LONG-TERM DEBT - Schedule Of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Accrued interest payable | $ 7.9 | $ 7.3 |
Unamortized discount, debt issuance costs and warrants | (9.6) | (11.9) |
Total | 298.3 | 295.4 |
Secured debt | Term Loan | ||
Debt Instrument [Line Items] | ||
Term Loan | $ 300 | $ 300 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 0% | 0% | 0% | 0% |
Federal income tax rate (in percent) | 21% |
RESTRUCTURING COSTS - Narrative
RESTRUCTURING COSTS - Narrative (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Restructuring and Related Activities [Abstract] | |
Restructuring and related cost, expected cost | $ 1.7 |
RESTRUCTURING COSTS - Restructu
RESTRUCTURING COSTS - Restructuring Costs Recorded In Consolidated Statements Of Operations And Comprehensive Loss (Details) - General and administrative - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 21 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | $ 1.9 | $ 0 | $ 9.4 | $ 8.4 | $ 28 |
Employee costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | 1.8 | 0 | 5.9 | 5.6 | 21.4 |
Real estate exit costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | 0 | 0 | 0 | 2.1 | 2.1 |
Other costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | $ 0.1 | $ 0 | $ 3.5 | $ 0.7 | $ 4.5 |
RESTRUCTURING COSTS - Restruc_2
RESTRUCTURING COSTS - Restructuring Costs Recorded In Consolidated Balance Sheets (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring activity: | |
Restructuring liability, beginning balance | $ 3.2 |
Expense incurred | 8.9 |
Payments | (5.5) |
Restructuring liability, ending balance | 6.6 |
Employee costs | |
Restructuring activity: | |
Restructuring liability, beginning balance | 3.1 |
Expense incurred | 5.5 |
Payments | (2) |
Restructuring liability, ending balance | 6.6 |
Other costs | |
Restructuring activity: | |
Restructuring liability, beginning balance | 0.1 |
Expense incurred | 3.4 |
Payments | (3.5) |
Restructuring liability, ending balance | $ 0 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 USD ($) shares | Sep. 30, 2023 USD ($) shares | Oct. 31, 2021 tranche shares | |
2020 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for issuance (in shares) | shares | 1.2 | 1.2 | |
Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 7.8 | $ 7.8 | |
Unrecognized compensation cost, period of recognition | 1 year | ||
Stock option expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost, period of recognition | 3 years | ||
Unrecognized compensation cost, options | 1.2 | $ 1.2 | |
Restricted stock unit expense | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | 25.3 | $ 25.3 | |
Unrecognized compensation cost, period of recognition | 4 years | ||
Performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost | $ 2.2 | $ 2.2 | |
Expected term | 5 years | ||
Risk-free interest rate | 4.06% | ||
Dividend rate | 0% | ||
Volatility rate | 50% | 76% | |
Class A Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued (in shares) | shares | 7.2 | ||
Short Term Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of tranches | tranche | 3 | ||
Long Term Warrant | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of tranches | tranche | 5 | ||
Carvana | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of tranches | tranche | 8 |
SHARE-BASED COMPENSATION - Warr
SHARE-BASED COMPENSATION - Warrant Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 4.7 | $ 7.8 | $ 12.4 | $ 21.8 |
Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 0.1 | 0.3 | 0.3 | 0.7 |
Other insurance expense (benefit) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 0.1 | 0.3 | 0.4 | 0.8 |
Warrant | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 5 | 1.5 | 13.3 | 10.3 |
Warrant | Sales and marketing | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | 0 | 0 | 0 | 8.8 |
Warrant | Other insurance expense (benefit) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total share-based compensation expense | $ 5 | $ 1.5 | $ 13.3 | $ 1.5 |
SHARE-BASED COMPENSATION - Shar
SHARE-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 4.7 | $ 7.8 | $ 12.4 | $ 21.8 |
Restricted stock unit expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 4.4 | 7.4 | 11.4 | 20.5 |
Performance-based restricted stock unit expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.1 | 0 | 0.1 | 0 |
Stock option expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.2 | 0.4 | 0.9 | 1.3 |
Loss and loss adjustment expenses | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.2 | 0.2 | 0.5 | 0.6 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.1 | 0.3 | 0.3 | 0.7 |
Other insurance expense (benefit) | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.1 | 0.3 | 0.4 | 0.8 |
Technology and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.9 | 1.1 | 2.4 | 3.1 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 3.4 | $ 5.9 | $ 8.8 | $ 16.6 |
SHARE-BASED COMPENSATION - Perf
SHARE-BASED COMPENSATION - Performance Stock Units (Details) - Performance-based RSUs - $ / shares shares in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted (in shares) | 0.4 | 0.4 |
Tranche 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock price (in dollars per share) | $ 16.76 | |
Granted (in shares) | 0 | |
Granted (in dollars per share) | $ 7.69 | |
Tranche 2 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock price (in dollars per share) | $ 25.14 | |
Granted (in shares) | 0.1 | |
Granted (in dollars per share) | $ 6.70 | |
Tranche 3 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock price (in dollars per share) | $ 33.52 | |
Granted (in shares) | 0.1 | |
Granted (in dollars per share) | $ 5.87 | |
Tranche 4 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock price (in dollars per share) | $ 41.90 | |
Granted (in shares) | 0.2 | |
Granted (in dollars per share) | $ 5.10 |
SHARE-BASED COMPENSATION - RSU
SHARE-BASED COMPENSATION - RSU Activity (Details) - Restricted stock unit expense $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 1.1 |
Granted (in shares) | shares | 1.6 |
Vested (in shares) | shares | (0.5) |
Forfeited, expired or canceled (in shares) | shares | (0.2) |
Ending balance (in shares) | shares | 2 |
Weighted-Average Grant Date Fair Value per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 51.81 |
Granted (in dollars per share) | $ / shares | 6.62 |
Vested (in dollars per share) | $ / shares | 50.44 |
Forfeited, expired or canceled (in dollars per share) | $ / shares | 53.75 |
Ending balance (in dollars per share) | $ / shares | $ 15.79 |
Aggregate Intrinsic Value | |
Beginning balance | $ | $ 5 |
Vested | $ | 2.8 |
Ending balance | $ | $ 18.9 |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Option Activity (Details) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Number of Shares | ||
Outstanding, beginning balance (in shares) | shares | 0.2 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | 0 | |
Forfeited, expired or canceled (in shares) | shares | (0.1) | |
Outstanding, ending balance (in shares) | shares | 0.1 | 0.2 |
Weighted-Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 38.15 | |
Granted (in dollars per share) | $ / shares | 8.94 | |
Exercised (in dollars per share) | $ / shares | 0 | |
Forfeited, expired and canceled (in dollars per share) | $ / shares | 44.86 | |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 33.74 | $ 38.15 |
Outstanding, weighted-average remaining contractual term (in years) | 4 years 6 months 10 days | 5 years 7 months 17 days |
Outstanding, aggregate intrinsic value | $ | $ 0.5 | $ 0.2 |
Exercised, aggregate intrinsic value | $ | $ 0 |
OTHER COMPREHENSIVE LOSS AND _3
OTHER COMPREHENSIVE LOSS AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 214.4 | $ 381.3 | $ 277.1 | $ 536.4 |
Other comprehensive loss | (0.7) | (2.3) | (0.8) | (7.3) |
Ending balance | 177.1 | 321.8 | 177.1 | 321.8 |
Change in net unrealized gains (losses) on investments: | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance | (5.9) | (4.6) | (5.8) | 0.4 |
Other comprehensive loss before reclassifications | (0.7) | (2.3) | (0.8) | (7.4) |
Net realized losses on investments reclassified from AOCI to net loss | 0 | 0 | 0 | 0.1 |
Other comprehensive loss | (0.7) | (2.3) | (0.8) | (7.3) |
Ending balance | $ (6.6) | $ (6.9) | $ (6.6) | $ (6.9) |
LOSS PER SHARE - Schedule of Ba
LOSS PER SHARE - Schedule of Basic and Diluted Loss per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (45.8) | $ (66.4) | $ (123.4) | $ (239.4) |
Weighted-average common shares outstanding: basic (both Class A and B) (in shares) | 14.5 | 14.1 | 14.4 | 14 |
Weighted-average common shares outstanding: diluted (both Class A and B) (in shares) | 14.5 | 14.1 | 14.4 | 14 |
Loss per common share: basic (both Class A and B) (in dollars per share) | $ (3.16) | $ (4.71) | $ (8.57) | $ (17.10) |
Loss per common share: diluted (both Class A and B) (in dollars per share) | $ (3.16) | $ (4.71) | $ (8.57) | $ (17.10) |
LOSS PER SHARE - Schedule of An
LOSS PER SHARE - Schedule of Anti-Dilutive Securities (Details) - shares shares in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 10.7 | 10.1 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 0.1 | 0.2 |
Nonvested shares subject to repurchase | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 0.1 | 0.1 |
Restricted stock units and performance-based restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 2 | 1.3 |
Redeemable convertible preferred stock (as converted to common stock) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 0.8 | 0.8 |
Warrants to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 7.7 | 7.7 |
GEOGRAPHICAL BREAKDOWN OF GRO_3
GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Effects of Reinsurance [Line Items] | ||||
Total | $ 224.2 | $ 150.7 | $ 503.9 | $ 478 |
Texas | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 36.8 | 26.2 | 80.1 | 89.5 |
Georgia | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 26.3 | 15 | 56 | 48.8 |
Colorado | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 15.3 | 10.3 | 37.8 | 30.8 |
Pennsylvania | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 12.1 | 9.1 | 29 | 26.8 |
South Carolina | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 11.8 | 4.5 | 28.6 | 16.4 |
Utah | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 8.3 | 8 | 22.9 | 24.1 |
Arizona | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 11 | 4.3 | 21.7 | 13.3 |
Ohio | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 8.4 | 3.9 | 16.9 | 11.8 |
Oklahoma | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 7.2 | 5.2 | 16.7 | 16.1 |
Missouri | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 8.7 | 4.3 | 16.1 | 14.2 |
All others states | ||||
Effects of Reinsurance [Line Items] | ||||
Total | $ 78.3 | $ 59.9 | $ 178.1 | $ 186.2 |
Geographic Concentration Risk | Gross Written Premiums | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 100% | 100% | 100% | 100% |
Geographic Concentration Risk | Gross Written Premiums | Texas | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 16.40% | 17.40% | 15.90% | 18.70% |
Geographic Concentration Risk | Gross Written Premiums | Georgia | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 11.70% | 10% | 11.10% | 10.20% |
Geographic Concentration Risk | Gross Written Premiums | Colorado | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 6.80% | 6.80% | 7.50% | 6.40% |
Geographic Concentration Risk | Gross Written Premiums | Pennsylvania | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 5.40% | 6% | 5.80% | 5.60% |
Geographic Concentration Risk | Gross Written Premiums | South Carolina | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 5.30% | 3% | 5.70% | 3.40% |
Geographic Concentration Risk | Gross Written Premiums | Utah | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 3.70% | 5.30% | 4.50% | 5% |
Geographic Concentration Risk | Gross Written Premiums | Arizona | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 4.90% | 2.90% | 4.30% | 2.80% |
Geographic Concentration Risk | Gross Written Premiums | Ohio | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 3.70% | 2.60% | 3.40% | 2.50% |
Geographic Concentration Risk | Gross Written Premiums | Oklahoma | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 3.20% | 3.50% | 3.30% | 3.40% |
Geographic Concentration Risk | Gross Written Premiums | Missouri | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 3.90% | 2.90% | 3.20% | 3% |
Geographic Concentration Risk | Gross Written Premiums | All others states | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 35% | 39.60% | 35.30% | 39% |