COVER PAGE
COVER PAGE - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jul. 31, 2024 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
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,$0.0001 par value per share | |
Trading Symbol | ROOT | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001788882 | |
Current Fiscal Year End Date | --12-31 | |
Class A Shares | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 10.6 | |
Class B Shares | ||
Entity Listings [Line Items] | ||
Entity Common Stock, Shares Outstanding | 4.4 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Investments: | ||
Fixed maturities available-for-sale, at fair value (amortized cost: $227.2 and $168.4 at June 30, 2024 and December 31, 2023, respectively) | $ 223.8 | $ 165.9 |
Short-term investments (amortized cost: $11.7 and $0.9 at June 30, 2024 and December 31, 2023, respectively) | 11.7 | 0.9 |
Other investments | 4.4 | 4.4 |
Total investments | 239.9 | 171.2 |
Cash and cash equivalents | 667.2 | 678.7 |
Restricted cash | 1 | 1 |
Premiums receivable, net of allowance of $6.8 and $4.0 at June 30, 2024 and December 31, 2023, respectively | 296 | 247.1 |
Reinsurance recoverable and receivable, net of allowance of $1.8 at June 30, 2024 and December 31, 2023 | 156.8 | 125.3 |
Prepaid reinsurance premiums | 48.4 | 48.2 |
Other assets | 86.5 | 76.2 |
Total assets | 1,495.8 | 1,347.7 |
Liabilities: | ||
Loss and loss adjustment expense reserves | 375.8 | 284.2 |
Unearned premiums | 339.7 | 283.7 |
Long-term debt and warrants | 300.1 | 299 |
Reinsurance premiums payable | 55.6 | 54.4 |
Accounts payable and accrued expenses | 55 | 65.6 |
Other liabilities | 106.3 | 83.1 |
Total liabilities | 1,232.5 | 1,070 |
Commitments and Contingencies (Note 11) | ||
Redeemable convertible preferred stock, $0.0001 par value, 100.0 shares authorized, 14.1 shares issued and outstanding at June 30, 2024 and December 31, 2023 (redemption value of $126.5) | 112 | 112 |
Stockholders’ equity: | ||
Additional paid-in capital | 1,881.5 | 1,883.4 |
Accumulated other comprehensive loss | (3.4) | (2.5) |
Accumulated loss | (1,726.8) | (1,715.2) |
Total stockholders’ equity | 151.3 | 165.7 |
Total liabilities, redeemable convertible preferred stock and stockholders’ equity | 1,495.8 | 1,347.7 |
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 | Jun. 30, 2024 | Dec. 31, 2023 |
Amortized cost, fixed maturities | $ 227.2 | $ 168.4 |
Amortized cost, short term investments | 11.7 | 0.9 |
Allowance for premiums receivable | 6.8 | 4 |
Allowance for credit loss | $ 1.8 | $ 1.8 |
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) | 10.6 | 9.5 |
Common stock, shares outstanding (in shares) | 10.6 | 9.5 |
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) | 4.4 | 5 |
Common stock, shares outstanding (in shares) | 4.4 | 5 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - UNAUDITED - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenues: | ||||
Net premiums earned | $ 261.6 | $ 63.9 | $ 491.9 | $ 123.9 |
Net investment income | 10 | 6.8 | 19.2 | 13.5 |
Fee income | 16.6 | 3.8 | 31.3 | 7 |
Other income | 1 | 0.3 | 1.7 | 0.5 |
Total revenues | 289.2 | 74.8 | 544.1 | 144.9 |
Operating expenses: | ||||
Loss and loss adjustment expenses | 190.3 | 59.5 | 356.7 | 122.8 |
Sales and marketing | 34.2 | 6.1 | 64.6 | 9.7 |
Other insurance expense | 28.1 | 2.6 | 52.7 | 3.9 |
Technology and development | 14.7 | 11.1 | 25.7 | 21.3 |
General and administrative | 18.1 | 20.7 | 35.2 | 42.2 |
Total operating expenses | 285.4 | 100 | 534.9 | 199.9 |
Operating income (loss) | 3.8 | (25.2) | 9.2 | (55) |
Interest expense | (11.6) | (11.5) | (23.2) | (22.6) |
Loss before income tax expense | (7.8) | (36.7) | (14) | (77.6) |
Income tax expense | 0 | 0 | 0 | 0 |
Net loss | (7.8) | (36.7) | (14) | (77.6) |
Other comprehensive loss: | ||||
Changes in net unrealized losses on investments | (0.1) | (1.2) | (0.9) | (0.1) |
Comprehensive loss | $ (7.9) | $ (37.9) | $ (14.9) | $ (77.7) |
Loss per common share: basic (both Class A and B) (in dollars per share) | $ (0.52) | $ (2.55) | $ (0.95) | $ (5.43) |
Loss per common share: diluted (both Class A and B) (in dollars per share) | $ (0.52) | $ (2.55) | $ (0.95) | $ (5.43) |
Weighted-average common shares outstanding: basic (both Class A and B) (in shares) | 14.9 | 14.4 | 14.8 | 14.3 |
Weighted-average common shares outstanding: diluted (both Class A and B) (in shares) | 14.9 | 14.4 | 14.8 | 14.3 |
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 Convertible Common Stock | Class A and Class B Convertible Common Stock Class A Shares | Class A and Class B Convertible Common Stock Class B Shares | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Loss |
Beginning balance (in shares) at Dec. 31, 2022 | 14.1 | ||||||||
Beginning balance at Dec. 31, 2022 | $ 112 | ||||||||
Ending balance (in shares) at Jun. 30, 2023 | 14.1 | ||||||||
Ending balance at Jun. 30, 2023 | $ 112 | ||||||||
Beginning balance (in shares) at Dec. 31, 2022 | 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 | (77.6) | (77.6) | |||||||
Other comprehensive loss | (0.1) | (0.1) | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares) | 0.2 | ||||||||
Common stock—share-based compensation expense | 7.7 | 7.7 | |||||||
Warrant compensation expense | 8.3 | 8.3 | |||||||
Warrant issuance costs | (1) | (1) | |||||||
Ending balance (in shares) at Jun. 30, 2023 | 9.4 | 5 | |||||||
Ending balance at Jun. 30, 2023 | $ 214.4 | 0 | 1,865.7 | (5.9) | (1,645.4) | ||||
Beginning balance (in shares) at Mar. 31, 2023 | 14.1 | ||||||||
Beginning balance at Mar. 31, 2023 | $ 112 | ||||||||
Ending balance (in shares) at Jun. 30, 2023 | 14.1 | ||||||||
Ending balance at Jun. 30, 2023 | $ 112 | ||||||||
Beginning balance (in shares) at Mar. 31, 2023 | 9.2 | 5 | |||||||
Beginning balance at Mar. 31, 2023 | 243.7 | 0 | 1,857.1 | (4.7) | (1,608.7) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (36.7) | (36.7) | |||||||
Other comprehensive loss | (1.2) | (1.2) | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares) | 0.2 | ||||||||
Common stock—share-based compensation expense | 5.2 | 5.2 | |||||||
Warrant compensation expense | 3.9 | 3.9 | |||||||
Warrant issuance costs | (0.5) | (0.5) | |||||||
Ending balance (in shares) at Jun. 30, 2023 | 9.4 | 5 | |||||||
Ending balance at Jun. 30, 2023 | $ 214.4 | 0 | 1,865.7 | (5.9) | (1,645.4) | ||||
Beginning balance (in shares) at Dec. 31, 2023 | 14.1 | ||||||||
Beginning balance at Dec. 31, 2023 | $ 112 | ||||||||
Ending balance (in shares) at Jun. 30, 2024 | 14.1 | ||||||||
Ending balance at Jun. 30, 2024 | $ 112 | ||||||||
Beginning balance (in shares) at Dec. 31, 2023 | 9.5 | 5 | 9.5 | 5 | |||||
Beginning balance at Dec. 31, 2023 | 165.7 | 0 | 1,883.4 | (2.5) | (1,715.2) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (14) | (14) | |||||||
Other comprehensive loss | $ (0.9) | (0.9) | |||||||
Conversion of Class B to Class A (in shares) | 0.6 | (0.6) | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares) | 0 | 0.5 | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes | $ (11.3) | (13.7) | 2.4 | ||||||
Common stock—share-based compensation expense | 8.4 | 8.4 | |||||||
Warrant compensation expense | 3.8 | 3.8 | |||||||
Warrant issuance costs | (0.4) | (0.4) | |||||||
Ending balance (in shares) at Jun. 30, 2024 | 10.6 | 4.4 | 10.6 | 4.4 | |||||
Ending balance at Jun. 30, 2024 | $ 151.3 | 0 | 1,881.5 | (3.4) | (1,726.8) | ||||
Beginning balance (in shares) at Mar. 31, 2024 | 14.1 | ||||||||
Beginning balance at Mar. 31, 2024 | $ 112 | ||||||||
Ending balance (in shares) at Jun. 30, 2024 | 14.1 | ||||||||
Ending balance at Jun. 30, 2024 | $ 112 | ||||||||
Beginning balance (in shares) at Mar. 31, 2024 | 9.6 | 5 | |||||||
Beginning balance at Mar. 31, 2024 | 165.7 | 0 | 1,890.4 | (3.3) | (1,721.4) | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net loss | (7.8) | (7.8) | |||||||
Other comprehensive loss | (0.1) | (0.1) | |||||||
Conversion of Class B to Class A (in shares) | 0.6 | (0.6) | |||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes (in shares) | 0.4 | ||||||||
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes | (11.3) | (13.7) | 2.4 | ||||||
Common stock—share-based compensation expense | 3.8 | 3.8 | |||||||
Warrant compensation expense | 1 | 1 | |||||||
Ending balance (in shares) at Jun. 30, 2024 | 10.6 | 4.4 | 10.6 | 4.4 | |||||
Ending balance at Jun. 30, 2024 | $ 151.3 | $ 0 | $ 1,881.5 | $ (3.4) | $ (1,726.8) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (14) | $ (77.6) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Share-based compensation | 8.4 | 7.7 |
Warrant compensation expense | 3.8 | 8.3 |
Depreciation and amortization | 6.9 | 5.5 |
Bad debt expense | 13.9 | 5 |
Changes in operating assets and liabilities: | ||
Premiums receivable | (62.8) | (20.7) |
Reinsurance recoverable and receivable | (31.5) | 18.6 |
Prepaid reinsurance premiums | (0.2) | 0.5 |
Other assets | (11.3) | 14.6 |
Losses and loss adjustment expenses reserves | 91.6 | (40.9) |
Unearned premiums | 56 | 18.1 |
Reinsurance premiums payable | 1.2 | (29.4) |
Accounts payable and accrued expenses | (11) | (0.8) |
Other liabilities | 26.1 | (3.2) |
Net cash provided by (used in) operating activities | 77.1 | (94.3) |
Cash flows from investing activities: | ||
Purchases of investments | (95.5) | (48.9) |
Proceeds from maturities, call and pay downs of investments | 26.2 | 14.8 |
Sales of investments | 0 | 0.2 |
Capitalization of internally developed software | (4.6) | (5.1) |
Purchases of fixed assets | (0.4) | (0.2) |
Net cash used in investing activities | (74.3) | (39.2) |
Cash flows from financing activities: | ||
Taxes paid related to net share settlement of equity awards | (11.3) | (0.6) |
Payment of preferred stock and related warrants issuance costs | (3) | 0 |
Net cash used in financing activities | (14.3) | (0.6) |
Net decrease in cash, cash equivalents and restricted cash | (11.5) | (134.1) |
Cash, cash equivalents and restricted cash at beginning of period | 679.7 | 763.1 |
Cash, cash equivalents and restricted cash at end of period | $ 668.2 | $ 629 |
NATURE OF BUSINESS
NATURE OF BUSINESS | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS | NATURE OF BUSINESS Root, 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.” |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
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, 2023 filed with the Securities and Exchange Commission, or SEC, on February 21, 2024. 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. 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 June 30, December 31, 2024 2023 (dollars in millions) Cash and cash equivalents $ 667.2 $ 678.7 Restricted cash 1.0 1.0 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 668.2 $ 679.7 Deferred Policy Acquisition Costs —The following table provides a reconciliation of the beginning and ending deferred policy acquisition costs, net of accumulated amortization, reported in other assets within the condensed consolidated balance sheets as of June 30, 2024 and 2023: 2024 2023 (dollars in millions) Balance, January 1 $ 18.0 $ 6.7 Acquisition costs deferred 21.1 14.9 Amortization expense (15.7) (11.1) Balance, June 30 $ 23.4 $ 10.5 Upcoming Accounting Pronouncements— In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU looks to provide improvements to the segment disclosure by providing users with more decision-useful information about reportable segments in a public entity. The main provisions require a company to disclose, on an annual and interim basis, significant expenses included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment, a description of its composition and the title and position of the Chief Operating Decision Maker, or CODM, with an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding to allocate resources. It also requires all annual disclosures about a reportable segments’ profit or loss and assets to be reported on an interim basis. Although we operate in only one reporting segment, we are still required to provide all the disclosures required by this ASU and all existing segment disclosures in Topic 280. The ASU is to be applied retrospectively to all prior periods presented in the financial statements with an effective date for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We will adopt this ASU in the fourth quarter of 2024 on a retrospective basis. We have currently identified the Chief Executive Officer as our CODM. We are currently evaluating the other impacts of this ASU. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This ASU looks to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The main provisions to the rate reconciliation disclosure require public entities on an annual basis to: disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The main provisions to the income taxes paid disclosure require that all entities disclose on an annual basis: the amount of income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid meets a quantitative threshold. This ASU also requires all entities to disclose income (loss) from continuing operations before income tax expense (benefit) disaggregated between domestic and foreign and income tax expense (benefit) from continuing operations disaggregated by federal, state and foreign. This ASU is to be applied on a prospective basis with an effective date for all public entities for annual periods beginning after December 15, 2024. Early adoption is permitted. This ASU only requires additional disclosure, will not have an impact on our results of operations or financial condition, and is not expected to have a material impact on the Notes to Condensed Consolidated Financial Statements. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023 are as follows: June 30, 2024 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 $ 28.6 $ — $ 0.1 $ (0.3) $ 28.4 Municipal securities 23.8 — — (0.7) 23.1 Corporate debt securities 84.7 — 0.1 (1.5) 83.3 Residential mortgage-backed securities 21.0 — 0.1 (0.4) 20.7 Commercial mortgage-backed securities 42.1 — — (0.7) 41.4 Other debt obligations 27.0 — — (0.1) 26.9 Total fixed maturities 227.2 — 0.3 (3.7) 223.8 Short-term investments 11.7 — — — 11.7 Total $ 238.9 $ — $ 0.3 $ (3.7) $ 235.5 December 31, 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 $ 14.6 $ — $ 0.1 $ (0.1) $ 14.6 Municipal securities 24.8 — 0.1 (0.8) 24.1 Corporate debt securities 66.3 — 0.2 (1.3) 65.2 Residential mortgage-backed securities 12.0 — 0.1 (0.2) 11.9 Commercial mortgage-backed securities 30.4 — 0.1 (0.7) 29.8 Other debt obligations 20.3 — 0.1 (0.1) 20.3 Total fixed maturities 168.4 — 0.7 (3.2) 165.9 Short-term investments 0.9 — — — 0.9 Total $ 169.3 $ — $ 0.7 $ (3.2) $ 166.8 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 June 30, 2024 and December 31, 2023. We do not intend to sell the securities and it is not more likely than not that we will be required to sell the securities 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 June 30, 2024 and December 31, 2023. 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 June 30, 2024 and December 31, 2023: June 30, 2024 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 $ 23.0 $ (0.2) $ 2.6 $ (0.1) $ 25.6 $ (0.3) Municipal securities 7.8 — 12.5 (0.7) 20.3 (0.7) Corporate debt securities 33.1 (0.3) 34.3 (1.2) 67.4 (1.5) Residential mortgage-backed securities 14.2 (0.1) 2.3 (0.3) 16.5 (0.4) Commercial mortgage-backed securities 15.8 (0.2) 18.1 (0.5) 33.9 (0.7) Other debt obligations 15.6 (0.1) 3.9 — 19.5 (0.1) Total fixed maturities 109.5 (0.9) 73.7 (2.8) 183.2 (3.7) Short-term investments 9.4 — — — 9.4 — Total $ 118.9 $ (0.9) $ 73.7 $ (2.8) $ 192.6 $ (3.7) December 31, 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 $ 1.7 $ — $ 2.4 $ (0.1) $ 4.1 $ (0.1) Municipal securities 3.1 — 15.1 (0.8) 18.2 (0.8) Corporate debt securities 13.4 — 35.1 (1.3) 48.5 (1.3) Residential mortgage-backed securities 4.1 — 1.9 (0.2) 6.0 (0.2) Commercial mortgage-backed securities 9.1 (0.1) 13.4 (0.6) 22.5 (0.7) Other debt obligations 4.4 — 4.4 (0.1) 8.8 (0.1) Total fixed maturities 35.8 (0.1) 72.3 (3.1) 108.1 (3.2) Short-term investments 0.3 — — — 0.3 — Total $ 36.1 $ (0.1) $ 72.3 $ (3.1) $ 108.4 $ (3.2) Other Investments As of June 30, 2024 and December 31, 2023, other investments related to our private equity investments were $4.4 million. There were no realized or unrealized gains and losses or impairment losses recognized on private equity investments for the three and six months ended June 30, 2024 and 2023. There were no realized gains or losses on short-term investments, available-for-sale fixed maturities and other investments for the three and six months ended June 30, 2024 and 2023. 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 June 30, 2024: June 30, 2024 Amortized Cost Fair Value (dollars in millions) Due in one year or less $ 39.0 $ 38.6 Due after one year through five years 151.4 149.1 Due five years through 10 years 24.7 24.5 Due after 10 years 23.8 23.3 Total $ 238.9 $ 235.5 The following table sets forth the components of net investment income for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Interest on bonds $ 2.3 $ 1.0 $ 4.0 $ 1.9 Interest on deposits and cash equivalents 8.2 6.0 16.3 11.9 Total 10.5 7.0 20.3 13.8 Investment expense (0.5) (0.2) (1.1) (0.3) Net investment income $ 10.0 $ 6.8 $ 19.2 $ 13.5 The following tables summarize the credit ratings of short-term investments and available-for-sale fixed maturity securities at June 30, 2024 and December 31, 2023: June 30, 2024 Amortized Cost Fair Value % of Total (dollars in millions) S&P Global rating or equivalent AAA $ 65.0 $ 64.1 27.2 % AA+, AA, AA-, A-1 102.0 100.8 42.8 A+, A, A- 55.2 54.0 22.9 BBB+, BBB, BBB- 16.7 16.6 7.1 Total $ 238.9 $ 235.5 100.0 % December 31, 2023 Amortized Cost Fair Value % of Total (dollars in millions) S&P Global rating or equivalent AAA $ 53.0 $ 52.1 31.2 % AA+, AA, AA-, A-1 59.4 58.8 35.3 A+, A, A- 42.1 41.2 24.7 BBB+, BBB, BBB- 14.8 14.7 8.8 Total $ 169.3 $ 166.8 100.0 % |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023: June 30, 2024 Level 1 Level 2 Level 3 Total (dollars in millions) Assets Fixed maturities: U.S. Treasury securities and agencies $ 27.7 $ 0.7 $ — $ 28.4 Municipal securities — 23.1 — 23.1 Corporate debt securities — 83.3 — 83.3 Residential mortgage-backed securities — 20.7 — 20.7 Commercial mortgage-backed securities — 41.4 — 41.4 Other debt obligations — 26.9 — 26.9 Total fixed maturities 27.7 196.1 — 223.8 Short-term investments 10.8 0.9 — 11.7 Cash equivalents 411.8 — — 411.8 Total assets at fair value $ 450.3 $ 197.0 $ — $ 647.3 December 31, 2023 Level 1 Level 2 Level 3 Total (dollars in millions) Assets Fixed maturities: U.S. Treasury securities and agencies $ 13.3 $ 1.3 $ — $ 14.6 Municipal securities — 24.1 — 24.1 Corporate debt securities — 65.2 — 65.2 Residential mortgage-backed securities — 11.9 — 11.9 Commercial mortgage-backed securities — 29.8 — 29.8 Other debt obligations — 20.3 — 20.3 Total fixed maturities 13.3 152.6 — 165.9 Short-term investments 0.9 — — 0.9 Cash equivalents 439.6 — — 439.6 Total assets at fair value $ 453.8 $ 152.6 $ — $ 606.4 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. 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 June 30, 2024 and December 31, 2023, the carrying amounts and fair values of these financial instruments were as follows: Carrying Amount as of June 30, 2024 Estimated Fair Value as of June 30, 2024 Carrying Amount as of December 31, 2023 Estimated Fair Value as of December 31, 2023 (dollars in millions) Long-term debt $ 300.1 $ 306.7 $ 299.0 $ 305.2 |
LOSS AND LOSS ADJUSTMENT EXPENS
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES | 6 Months Ended |
Jun. 30, 2024 | |
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: Six Months Ended June 30, 2024 2023 (dollars in millions) Gross loss and LAE reserves, January 1 $ 284.2 $ 287.4 Reinsurance recoverable on unpaid losses (43.8) (76.4) Net loss and LAE reserves, January 1 240.4 211.0 Net incurred loss and LAE related to: Current year 361.3 123.6 Prior years (4.6) (0.8) Total incurred 356.7 122.8 Net paid loss and LAE related to: Current year 153.5 58.7 Prior years 119.5 99.0 Total paid 273.0 157.7 Net loss and LAE reserves, June 30 324.1 176.1 Plus reinsurance recoverable on unpaid losses 51.7 70.4 Gross loss and LAE reserves, June 30 $ 375.8 $ 246.5 Incurred losses and LAE attributable to prior accident years was a decrease of $4.6 million and $0.8 million for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024, the development of incurred losses and LAE related to prior periods was primarily driven by lower-than-expected reported losses and LAE from accident year 2023 on both liability and physical damage coverages. For the six months ended June 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 higher-than-expected LAE on prior accident period claims. |
REINSURANCE
REINSURANCE | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Premiums written: Direct $ 250.1 $ 128.1 $ 523.0 $ 251.9 Assumed 58.1 16.9 115.9 27.8 Ceded (44.6) (67.2) (91.3) (137.1) Net premiums written $ 263.6 $ 77.8 $ 547.6 $ 142.6 Premiums earned: Direct $ 252.7 $ 120.2 $ 481.1 $ 240.3 Assumed 55.3 11.3 101.9 21.3 Ceded (46.4) (67.6) (91.1) (137.7) Net premiums earned $ 261.6 $ 63.9 $ 491.9 $ 123.9 Losses and LAE incurred: Direct $ 173.6 $ 90.5 $ 335.8 $ 190.3 Assumed 45.1 8.7 76.6 16.4 Ceded (28.4) (39.7) (55.7) (83.9) Net losses and LAE incurred $ 190.3 $ 59.5 $ 356.7 $ 122.8 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. GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN Gross premiums written by state is as follows for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Amount % of Total Amount % of Total Amount % of Total Amount % of Total (dollars in millions) State: Texas $ 61.7 20.0 % $ 23.8 16.4 % $ 123.3 19.3 % $ 43.3 15.5 % Georgia 41.1 13.3 15.8 10.9 80.5 12.6 29.7 10.6 Florida 28.4 9.2 2.0 1.4 44.0 6.9 3.8 1.4 Colorado 17.3 5.6 11.9 8.2 35.5 5.6 22.5 8.0 Pennsylvania 17.8 5.8 7.6 5.2 35.3 5.5 16.9 6.0 South Carolina 9.6 3.1 10.6 7.3 31.6 4.9 16.8 6.0 Arizona 12.7 4.1 6.0 4.1 26.6 4.2 10.7 3.8 Ohio 8.6 2.8 4.9 3.4 20.1 3.1 8.6 3.1 Maryland 7.1 2.3 3.0 2.1 17.9 2.8 6.3 2.3 Utah 7.3 2.4 7.4 5.1 16.1 2.5 14.6 5.2 All others states 96.6 31.4 52.0 35.9 208.0 32.6 106.5 38.1 Total $ 308.2 100.0 % $ 145.0 100.0 % $ 638.9 100.0 % $ 279.7 100.0 % |
LONG-TERM DEBT
LONG-TERM DEBT | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT In 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 with a 1.0% floor, plus 9.0%. The Term Loan can be repaid at anytime through the maturity date as long as we provide at least three business days of written notice and pay a prepayment premium, which expired on July 26, 2024. The following summarizes the carrying value of long-term debt and warrants as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 (dollars in millions) Term Loan $ 300.0 $ 300.0 Accrued interest payable 7.5 7.9 Unamortized discount and debt issuance costs and warrants (7.4) (8.9) Total $ 300.1 $ 299.0 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The consolidated effective tax rate was zero for the three and six months ended June 30, 2024 and 2023. 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 June 30, 2024 and December 31, 2023, 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 | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING COSTS | RESTRUCTURING COSTS Beginning 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 June 30, 2024, 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 June 30, Six Months Ended June 30, Cumulative Incurred Through June 30, 2024 2024 2023 2024 2023 (dollars in millions) Restructuring costs: Employee costs $ — $ 1.8 $ 0.1 $ 4.1 $ 23.3 Real estate exit costs — — — — 2.1 Other costs — 0.1 — 3.4 4.5 Total restructuring costs $ — $ 1.9 $ 0.1 $ 7.5 $ 29.9 The following table displays a rollforward of the accrual for restructuring costs recorded in accounts payable and accrued expenses on the condensed consolidated balance sheets: Employee costs (dollars in millions) Restructuring activity: Restructuring liability as of January 1, 2024 $ 8.3 Expense incurred 0.1 Payments (8.4) Restructuring liability as of June 30, 2024 $ — |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024, all of the short-term warrants have vested and all of the respective compensation cost has been recognized. While the short-term warrants are vested and outstanding, 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 policies originating through the integrated automobile insurance solution for Carvana’s online buying platform. All of these warrants are out-of-the-money and therefore have no intrinsic value as of June 30, 2024. We recognized warrant compensation expense of $1.0 million and $3.9 million for the three months ended June 30, 2024 and 2023, respectively. We recognized warrant compensation expense of $3.8 million and $8.3 million for the six months ended June 30, 2024 and 2023, respectively. Warrant compensation expense is recorded in other insurance expense in the condensed consolidated statements of operations and comprehensive loss. 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, performance-based restricted stock units, or PSUs, and incentive and nonqualified stock options) to our officers, directors, employees and certain advisors. As of June 30, 2024, we had 2.0 million common shares available for issuance under the Plan. When these RSU and PSU awards vest, we fund the related payroll tax withholding and remittance obligations by either (i) withholding shares of our Class A common stock that would have otherwise been issued with respect to such awards and pay the relevant tax authorities in cash to satisfy such tax obligations, or (ii) allowing holders of such awards to pay us an amount in cash, via a broker, sufficient to cover the applicable tax withholding obligations. We recognize the related tax withholding liability for employee taxes on the date of the event triggering the measurement and payment of the tax to the taxing authority, which is the vesting date. The obligation to satisfy the employee portion of tax withholding in the event of net share settlement is reflected as a reduction of additional paid-in capital in our condensed consolidated balance sheets. The following table displays share-based compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Share-based compensation expense: Loss and loss adjustment expenses $ 0.4 $ 0.2 $ 0.8 $ 0.3 Sales and marketing 0.2 0.1 0.3 0.2 Other insurance expense 0.1 0.2 0.3 0.3 Technology and development 0.7 0.8 1.5 1.5 General and administrative 2.4 3.9 5.5 5.4 Total share-based compensation expense $ 3.8 $ 5.2 $ 8.4 $ 7.7 The following table provides total share-based compensation expense by type of award: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Share-based compensation expense: Restricted stock unit expense $ 3.4 $ 4.9 $ 7.6 $ 7.0 Performance-based restricted stock unit expense 0.3 — 0.5 — Stock option expense 0.1 0.3 0.3 0.7 Total share-based compensation expense $ 3.8 $ 5.2 $ 8.4 $ 7.7 As of June 30, 2024, there was $0.7 million, $19.3 million, and $1.4 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 two years for unvested stock options, four years for RSUs and three years for PSUs. Restricted Stock Units and Performance-Based Restricted Stock Units A summary of RSU and PSU activity for the six months ended June 30, 2024 is as follows: Six Months Ended June 30, 2024 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, 2024 1.9 $ 14.47 $ 20.3 Granted 0.1 58.96 Vested (0.6) 15.71 32.1 Forfeited, expired or canceled — 16.92 Nonvested at June 30, 2024 1.4 $ 17.32 $ 73.1 Stock Options A summary of option activity for the six months ended June 30, 2024 is as follows: Six Months Ended June 30, 2024 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, 2024 0.1 $ 33.68 4.29 $ 0.5 Granted — — Exercised — 7.05 123.6 Forfeited, expired or canceled — 82.00 Outstanding and exercisable at June 30, 2024 0.1 $ 33.99 3.80 $ 4.4 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
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. While the outcome of all legal actions is not presently determinable, 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 alleged 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 sought 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 was affirmed on July 24, 2024, by the United States Court of Appeals for the Fifth Circuit. Should plaintiff further appeal, the Company intends to continue to vigorously defend against the allegations. 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 alleged 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 were 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 sought unspecified damages. The complaint was voluntarily dismissed with prejudice on June 7, 2024. 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 alleged 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 sought 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 was affirmed on April 29, 2024, by the United States Court of Appeals for the Sixth Circuit. The plaintiffs have been granted an extension of time to August 28, 2024, to file a petition for a writ of certiorari with the United States Supreme Court. The Company intends to continue to vigorously defend against the allegations. 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. |
LOSS PER SHARE
LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions, except per share amounts) Net loss $ (7.8) $ (36.7) $ (14.0) $ (77.6) Weighted-average common shares outstanding: basic and diluted (both Class A and B) 14.9 14.4 14.8 14.3 Loss per common share: basic and diluted (both Class A and B) $ (0.52) $ (2.55) $ (0.95) $ (5.43) 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 June 30, 2024 2023 (in millions) Options to purchase common stock 0.1 0.1 Nonvested shares subject to repurchase 0.1 0.1 RSUs and PSUs 1.4 1.3 Redeemable convertible preferred stock (as converted to common stock) 0.8 0.8 Warrants to purchase common stock 7.7 7.6 Total 10.1 9.9 |
GEOGRAPHICAL BREAKDOWN OF GROSS
GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Premiums written: Direct $ 250.1 $ 128.1 $ 523.0 $ 251.9 Assumed 58.1 16.9 115.9 27.8 Ceded (44.6) (67.2) (91.3) (137.1) Net premiums written $ 263.6 $ 77.8 $ 547.6 $ 142.6 Premiums earned: Direct $ 252.7 $ 120.2 $ 481.1 $ 240.3 Assumed 55.3 11.3 101.9 21.3 Ceded (46.4) (67.6) (91.1) (137.7) Net premiums earned $ 261.6 $ 63.9 $ 491.9 $ 123.9 Losses and LAE incurred: Direct $ 173.6 $ 90.5 $ 335.8 $ 190.3 Assumed 45.1 8.7 76.6 16.4 Ceded (28.4) (39.7) (55.7) (83.9) Net losses and LAE incurred $ 190.3 $ 59.5 $ 356.7 $ 122.8 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. GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN Gross premiums written by state is as follows for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Amount % of Total Amount % of Total Amount % of Total Amount % of Total (dollars in millions) State: Texas $ 61.7 20.0 % $ 23.8 16.4 % $ 123.3 19.3 % $ 43.3 15.5 % Georgia 41.1 13.3 15.8 10.9 80.5 12.6 29.7 10.6 Florida 28.4 9.2 2.0 1.4 44.0 6.9 3.8 1.4 Colorado 17.3 5.6 11.9 8.2 35.5 5.6 22.5 8.0 Pennsylvania 17.8 5.8 7.6 5.2 35.3 5.5 16.9 6.0 South Carolina 9.6 3.1 10.6 7.3 31.6 4.9 16.8 6.0 Arizona 12.7 4.1 6.0 4.1 26.6 4.2 10.7 3.8 Ohio 8.6 2.8 4.9 3.4 20.1 3.1 8.6 3.1 Maryland 7.1 2.3 3.0 2.1 17.9 2.8 6.3 2.3 Utah 7.3 2.4 7.4 5.1 16.1 2.5 14.6 5.2 All others states 96.6 31.4 52.0 35.9 208.0 32.6 106.5 38.1 Total $ 308.2 100.0 % $ 145.0 100.0 % $ 638.9 100.0 % $ 279.7 100.0 % |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net loss | $ (7.8) | $ (36.7) | $ (14) | $ (77.6) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
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, 2023 filed with the Securities and Exchange Commission, or SEC, on February 21, 2024. |
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. |
Upcoming Accounting Pronouncements | Upcoming Accounting Pronouncements— In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU looks to provide improvements to the segment disclosure by providing users with more decision-useful information about reportable segments in a public entity. The main provisions require a company to disclose, on an annual and interim basis, significant expenses included within each reported measure of segment profit or loss, an amount for other segment items by reportable segment, a description of its composition and the title and position of the Chief Operating Decision Maker, or CODM, with an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding to allocate resources. It also requires all annual disclosures about a reportable segments’ profit or loss and assets to be reported on an interim basis. Although we operate in only one reporting segment, we are still required to provide all the disclosures required by this ASU and all existing segment disclosures in Topic 280. The ASU is to be applied retrospectively to all prior periods presented in the financial statements with an effective date for all public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We will adopt this ASU in the fourth quarter of 2024 on a retrospective basis. We have currently identified the Chief Executive Officer as our CODM. We are currently evaluating the other impacts of this ASU. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . This ASU looks to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The main provisions to the rate reconciliation disclosure require public entities on an annual basis to: disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. The main provisions to the income taxes paid disclosure require that all entities disclose on an annual basis: the amount of income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid disaggregated by individual jurisdictions in which income taxes paid meets a quantitative threshold. This ASU also requires all entities to disclose income (loss) from continuing operations before income tax expense (benefit) disaggregated between domestic and foreign and income tax expense (benefit) from continuing operations disaggregated by federal, state and foreign. This ASU is to be applied on a prospective basis with an effective date for all public entities for annual periods beginning after December 15, 2024. Early adoption is permitted. This ASU only requires additional disclosure, will not have an impact on our results of operations or financial condition, and is not expected to have a material impact on the Notes to Condensed Consolidated Financial Statements. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
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 June 30, December 31, 2024 2023 (dollars in millions) Cash and cash equivalents $ 667.2 $ 678.7 Restricted cash 1.0 1.0 Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows $ 668.2 $ 679.7 |
Deferred Policy Acquisition Costs | The following table provides a reconciliation of the beginning and ending deferred policy acquisition costs, net of accumulated amortization, reported in other assets within the condensed consolidated balance sheets as of June 30, 2024 and 2023: 2024 2023 (dollars in millions) Balance, January 1 $ 18.0 $ 6.7 Acquisition costs deferred 21.1 14.9 Amortization expense (15.7) (11.1) Balance, June 30 $ 23.4 $ 10.5 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023 are as follows: June 30, 2024 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 $ 28.6 $ — $ 0.1 $ (0.3) $ 28.4 Municipal securities 23.8 — — (0.7) 23.1 Corporate debt securities 84.7 — 0.1 (1.5) 83.3 Residential mortgage-backed securities 21.0 — 0.1 (0.4) 20.7 Commercial mortgage-backed securities 42.1 — — (0.7) 41.4 Other debt obligations 27.0 — — (0.1) 26.9 Total fixed maturities 227.2 — 0.3 (3.7) 223.8 Short-term investments 11.7 — — — 11.7 Total $ 238.9 $ — $ 0.3 $ (3.7) $ 235.5 December 31, 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 $ 14.6 $ — $ 0.1 $ (0.1) $ 14.6 Municipal securities 24.8 — 0.1 (0.8) 24.1 Corporate debt securities 66.3 — 0.2 (1.3) 65.2 Residential mortgage-backed securities 12.0 — 0.1 (0.2) 11.9 Commercial mortgage-backed securities 30.4 — 0.1 (0.7) 29.8 Other debt obligations 20.3 — 0.1 (0.1) 20.3 Total fixed maturities 168.4 — 0.7 (3.2) 165.9 Short-term investments 0.9 — — — 0.9 Total $ 169.3 $ — $ 0.7 $ (3.2) $ 166.8 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 June 30, 2024: June 30, 2024 Amortized Cost Fair Value (dollars in millions) Due in one year or less $ 39.0 $ 38.6 Due after one year through five years 151.4 149.1 Due five years through 10 years 24.7 24.5 Due after 10 years 23.8 23.3 Total $ 238.9 $ 235.5 |
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 June 30, 2024 and December 31, 2023: June 30, 2024 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 $ 23.0 $ (0.2) $ 2.6 $ (0.1) $ 25.6 $ (0.3) Municipal securities 7.8 — 12.5 (0.7) 20.3 (0.7) Corporate debt securities 33.1 (0.3) 34.3 (1.2) 67.4 (1.5) Residential mortgage-backed securities 14.2 (0.1) 2.3 (0.3) 16.5 (0.4) Commercial mortgage-backed securities 15.8 (0.2) 18.1 (0.5) 33.9 (0.7) Other debt obligations 15.6 (0.1) 3.9 — 19.5 (0.1) Total fixed maturities 109.5 (0.9) 73.7 (2.8) 183.2 (3.7) Short-term investments 9.4 — — — 9.4 — Total $ 118.9 $ (0.9) $ 73.7 $ (2.8) $ 192.6 $ (3.7) December 31, 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 $ 1.7 $ — $ 2.4 $ (0.1) $ 4.1 $ (0.1) Municipal securities 3.1 — 15.1 (0.8) 18.2 (0.8) Corporate debt securities 13.4 — 35.1 (1.3) 48.5 (1.3) Residential mortgage-backed securities 4.1 — 1.9 (0.2) 6.0 (0.2) Commercial mortgage-backed securities 9.1 (0.1) 13.4 (0.6) 22.5 (0.7) Other debt obligations 4.4 — 4.4 (0.1) 8.8 (0.1) Total fixed maturities 35.8 (0.1) 72.3 (3.1) 108.1 (3.2) Short-term investments 0.3 — — — 0.3 — Total $ 36.1 $ (0.1) $ 72.3 $ (3.1) $ 108.4 $ (3.2) |
Schedule of Net Investment Income | The following table sets forth the components of net investment income for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Interest on bonds $ 2.3 $ 1.0 $ 4.0 $ 1.9 Interest on deposits and cash equivalents 8.2 6.0 16.3 11.9 Total 10.5 7.0 20.3 13.8 Investment expense (0.5) (0.2) (1.1) (0.3) Net investment income $ 10.0 $ 6.8 $ 19.2 $ 13.5 |
Schedule of Credit Ratings | The following tables summarize the credit ratings of short-term investments and available-for-sale fixed maturity securities at June 30, 2024 and December 31, 2023: June 30, 2024 Amortized Cost Fair Value % of Total (dollars in millions) S&P Global rating or equivalent AAA $ 65.0 $ 64.1 27.2 % AA+, AA, AA-, A-1 102.0 100.8 42.8 A+, A, A- 55.2 54.0 22.9 BBB+, BBB, BBB- 16.7 16.6 7.1 Total $ 238.9 $ 235.5 100.0 % December 31, 2023 Amortized Cost Fair Value % of Total (dollars in millions) S&P Global rating or equivalent AAA $ 53.0 $ 52.1 31.2 % AA+, AA, AA-, A-1 59.4 58.8 35.3 A+, A, A- 42.1 41.2 24.7 BBB+, BBB, BBB- 14.8 14.7 8.8 Total $ 169.3 $ 166.8 100.0 % |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 June 30, 2024 and December 31, 2023: June 30, 2024 Level 1 Level 2 Level 3 Total (dollars in millions) Assets Fixed maturities: U.S. Treasury securities and agencies $ 27.7 $ 0.7 $ — $ 28.4 Municipal securities — 23.1 — 23.1 Corporate debt securities — 83.3 — 83.3 Residential mortgage-backed securities — 20.7 — 20.7 Commercial mortgage-backed securities — 41.4 — 41.4 Other debt obligations — 26.9 — 26.9 Total fixed maturities 27.7 196.1 — 223.8 Short-term investments 10.8 0.9 — 11.7 Cash equivalents 411.8 — — 411.8 Total assets at fair value $ 450.3 $ 197.0 $ — $ 647.3 December 31, 2023 Level 1 Level 2 Level 3 Total (dollars in millions) Assets Fixed maturities: U.S. Treasury securities and agencies $ 13.3 $ 1.3 $ — $ 14.6 Municipal securities — 24.1 — 24.1 Corporate debt securities — 65.2 — 65.2 Residential mortgage-backed securities — 11.9 — 11.9 Commercial mortgage-backed securities — 29.8 — 29.8 Other debt obligations — 20.3 — 20.3 Total fixed maturities 13.3 152.6 — 165.9 Short-term investments 0.9 — — 0.9 Cash equivalents 439.6 — — 439.6 Total assets at fair value $ 453.8 $ 152.6 $ — $ 606.4 |
Schedule of Carrying Amounts and Fair Values of Financial Instruments | As of June 30, 2024 and December 31, 2023, the carrying amounts and fair values of these financial instruments were as follows: Carrying Amount as of June 30, 2024 Estimated Fair Value as of June 30, 2024 Carrying Amount as of December 31, 2023 Estimated Fair Value as of December 31, 2023 (dollars in millions) Long-term debt $ 300.1 $ 306.7 $ 299.0 $ 305.2 |
LOSS AND LOSS ADJUSTMENT EXPE_2
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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: Six Months Ended June 30, 2024 2023 (dollars in millions) Gross loss and LAE reserves, January 1 $ 284.2 $ 287.4 Reinsurance recoverable on unpaid losses (43.8) (76.4) Net loss and LAE reserves, January 1 240.4 211.0 Net incurred loss and LAE related to: Current year 361.3 123.6 Prior years (4.6) (0.8) Total incurred 356.7 122.8 Net paid loss and LAE related to: Current year 153.5 58.7 Prior years 119.5 99.0 Total paid 273.0 157.7 Net loss and LAE reserves, June 30 324.1 176.1 Plus reinsurance recoverable on unpaid losses 51.7 70.4 Gross loss and LAE reserves, June 30 $ 375.8 $ 246.5 |
REINSURANCE (Tables)
REINSURANCE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Premiums written: Direct $ 250.1 $ 128.1 $ 523.0 $ 251.9 Assumed 58.1 16.9 115.9 27.8 Ceded (44.6) (67.2) (91.3) (137.1) Net premiums written $ 263.6 $ 77.8 $ 547.6 $ 142.6 Premiums earned: Direct $ 252.7 $ 120.2 $ 481.1 $ 240.3 Assumed 55.3 11.3 101.9 21.3 Ceded (46.4) (67.6) (91.1) (137.7) Net premiums earned $ 261.6 $ 63.9 $ 491.9 $ 123.9 Losses and LAE incurred: Direct $ 173.6 $ 90.5 $ 335.8 $ 190.3 Assumed 45.1 8.7 76.6 16.4 Ceded (28.4) (39.7) (55.7) (83.9) Net losses and LAE incurred $ 190.3 $ 59.5 $ 356.7 $ 122.8 Gross premiums written by state is as follows for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Amount % of Total Amount % of Total Amount % of Total Amount % of Total (dollars in millions) State: Texas $ 61.7 20.0 % $ 23.8 16.4 % $ 123.3 19.3 % $ 43.3 15.5 % Georgia 41.1 13.3 15.8 10.9 80.5 12.6 29.7 10.6 Florida 28.4 9.2 2.0 1.4 44.0 6.9 3.8 1.4 Colorado 17.3 5.6 11.9 8.2 35.5 5.6 22.5 8.0 Pennsylvania 17.8 5.8 7.6 5.2 35.3 5.5 16.9 6.0 South Carolina 9.6 3.1 10.6 7.3 31.6 4.9 16.8 6.0 Arizona 12.7 4.1 6.0 4.1 26.6 4.2 10.7 3.8 Ohio 8.6 2.8 4.9 3.4 20.1 3.1 8.6 3.1 Maryland 7.1 2.3 3.0 2.1 17.9 2.8 6.3 2.3 Utah 7.3 2.4 7.4 5.1 16.1 2.5 14.6 5.2 All others states 96.6 31.4 52.0 35.9 208.0 32.6 106.5 38.1 Total $ 308.2 100.0 % $ 145.0 100.0 % $ 638.9 100.0 % $ 279.7 100.0 % |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long Term Debt | The following summarizes the carrying value of long-term debt and warrants as of June 30, 2024 and December 31, 2023: June 30, 2024 December 31, 2023 (dollars in millions) Term Loan $ 300.0 $ 300.0 Accrued interest payable 7.5 7.9 Unamortized discount and debt issuance costs and warrants (7.4) (8.9) Total $ 300.1 $ 299.0 |
RESTRUCTURING COSTS (Tables)
RESTRUCTURING COSTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of 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 June 30, Six Months Ended June 30, Cumulative Incurred Through June 30, 2024 2024 2023 2024 2023 (dollars in millions) Restructuring costs: Employee costs $ — $ 1.8 $ 0.1 $ 4.1 $ 23.3 Real estate exit costs — — — — 2.1 Other costs — 0.1 — 3.4 4.5 Total restructuring costs $ — $ 1.9 $ 0.1 $ 7.5 $ 29.9 The following table displays a rollforward of the accrual for restructuring costs recorded in accounts payable and accrued expenses on the condensed consolidated balance sheets: Employee costs (dollars in millions) Restructuring activity: Restructuring liability as of January 1, 2024 $ 8.3 Expense incurred 0.1 Payments (8.4) Restructuring liability as of June 30, 2024 $ — |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation Expense | The following table displays share-based compensation expense recorded in the condensed consolidated statements of operations and comprehensive loss: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Share-based compensation expense: Loss and loss adjustment expenses $ 0.4 $ 0.2 $ 0.8 $ 0.3 Sales and marketing 0.2 0.1 0.3 0.2 Other insurance expense 0.1 0.2 0.3 0.3 Technology and development 0.7 0.8 1.5 1.5 General and administrative 2.4 3.9 5.5 5.4 Total share-based compensation expense $ 3.8 $ 5.2 $ 8.4 $ 7.7 The following table provides total share-based compensation expense by type of award: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Share-based compensation expense: Restricted stock unit expense $ 3.4 $ 4.9 $ 7.6 $ 7.0 Performance-based restricted stock unit expense 0.3 — 0.5 — Stock option expense 0.1 0.3 0.3 0.7 Total share-based compensation expense $ 3.8 $ 5.2 $ 8.4 $ 7.7 |
Schedule of RSU Activity | A summary of RSU and PSU activity for the six months ended June 30, 2024 is as follows: Six Months Ended June 30, 2024 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, 2024 1.9 $ 14.47 $ 20.3 Granted 0.1 58.96 Vested (0.6) 15.71 32.1 Forfeited, expired or canceled — 16.92 Nonvested at June 30, 2024 1.4 $ 17.32 $ 73.1 |
Schedule of Option Activity | A summary of option activity for the six months ended June 30, 2024 is as follows: Six Months Ended June 30, 2024 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, 2024 0.1 $ 33.68 4.29 $ 0.5 Granted — — Exercised — 7.05 123.6 Forfeited, expired or canceled — 82.00 Outstanding and exercisable at June 30, 2024 0.1 $ 33.99 3.80 $ 4.4 |
LOSS PER SHARE (Tables)
LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (in millions, except per share amounts) Net loss $ (7.8) $ (36.7) $ (14.0) $ (77.6) Weighted-average common shares outstanding: basic and diluted (both Class A and B) 14.9 14.4 14.8 14.3 Loss per common share: basic and diluted (both Class A and B) $ (0.52) $ (2.55) $ (0.95) $ (5.43) |
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 June 30, 2024 2023 (in millions) Options to purchase common stock 0.1 0.1 Nonvested shares subject to repurchase 0.1 0.1 RSUs and PSUs 1.4 1.3 Redeemable convertible preferred stock (as converted to common stock) 0.8 0.8 Warrants to purchase common stock 7.7 7.6 Total 10.1 9.9 |
GEOGRAPHICAL BREAKDOWN OF GRO_2
GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
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 six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 (dollars in millions) Premiums written: Direct $ 250.1 $ 128.1 $ 523.0 $ 251.9 Assumed 58.1 16.9 115.9 27.8 Ceded (44.6) (67.2) (91.3) (137.1) Net premiums written $ 263.6 $ 77.8 $ 547.6 $ 142.6 Premiums earned: Direct $ 252.7 $ 120.2 $ 481.1 $ 240.3 Assumed 55.3 11.3 101.9 21.3 Ceded (46.4) (67.6) (91.1) (137.7) Net premiums earned $ 261.6 $ 63.9 $ 491.9 $ 123.9 Losses and LAE incurred: Direct $ 173.6 $ 90.5 $ 335.8 $ 190.3 Assumed 45.1 8.7 76.6 16.4 Ceded (28.4) (39.7) (55.7) (83.9) Net losses and LAE incurred $ 190.3 $ 59.5 $ 356.7 $ 122.8 Gross premiums written by state is as follows for the three and six months ended June 30, 2024 and 2023: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Amount % of Total Amount % of Total Amount % of Total Amount % of Total (dollars in millions) State: Texas $ 61.7 20.0 % $ 23.8 16.4 % $ 123.3 19.3 % $ 43.3 15.5 % Georgia 41.1 13.3 15.8 10.9 80.5 12.6 29.7 10.6 Florida 28.4 9.2 2.0 1.4 44.0 6.9 3.8 1.4 Colorado 17.3 5.6 11.9 8.2 35.5 5.6 22.5 8.0 Pennsylvania 17.8 5.8 7.6 5.2 35.3 5.5 16.9 6.0 South Carolina 9.6 3.1 10.6 7.3 31.6 4.9 16.8 6.0 Arizona 12.7 4.1 6.0 4.1 26.6 4.2 10.7 3.8 Ohio 8.6 2.8 4.9 3.4 20.1 3.1 8.6 3.1 Maryland 7.1 2.3 3.0 2.1 17.9 2.8 6.3 2.3 Utah 7.3 2.4 7.4 5.1 16.1 2.5 14.6 5.2 All others states 96.6 31.4 52.0 35.9 208.0 32.6 106.5 38.1 Total $ 308.2 100.0 % $ 145.0 100.0 % $ 638.9 100.0 % $ 279.7 100.0 % |
NATURE OF BUSINESS (Details)
NATURE OF BUSINESS (Details) | Jun. 30, 2024 |
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 - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 667.2 | $ 678.7 | ||
Restricted cash | 1 | 1 | ||
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | $ 668.2 | $ 679.7 | $ 629 | $ 763.1 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Deferred Policy Acquisition Costs (Details) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 USD ($) segment | Jun. 30, 2023 USD ($) | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Balance, January 1 | $ 18 | $ 6.7 |
Acquisition costs deferred | 21.1 | 14.9 |
Amortization expense | (15.7) | (11.1) |
Balance, June 30 | $ 23.4 | $ 10.5 |
Number of reportable segments | segment | 1 |
INVESTMENTS - Amortized Cost an
INVESTMENTS - Amortized Cost and Fair Value (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 238.9 | $ 169.3 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0.3 | 0.7 |
Gross Unrealized Losses | (3.7) | (3.2) |
Fair Value | 235.5 | 166.8 |
U.S. Treasury securities and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 28.6 | 14.6 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0.1 | 0.1 |
Gross Unrealized Losses | (0.3) | (0.1) |
Fair Value | 28.4 | 14.6 |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 23.8 | 24.8 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (0.7) | (0.8) |
Fair Value | 23.1 | 24.1 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 84.7 | 66.3 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0.1 | 0.2 |
Gross Unrealized Losses | (1.5) | (1.3) |
Fair Value | 83.3 | 65.2 |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 21 | 12 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0.1 | 0.1 |
Gross Unrealized Losses | (0.4) | (0.2) |
Fair Value | 20.7 | 11.9 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 42.1 | 30.4 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (0.7) | (0.7) |
Fair Value | 41.4 | 29.8 |
Other debt obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 27 | 20.3 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0.1 |
Gross Unrealized Losses | (0.1) | (0.1) |
Fair Value | 26.9 | 20.3 |
Total fixed maturities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 227.2 | 168.4 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0.3 | 0.7 |
Gross Unrealized Losses | (3.7) | (3.2) |
Fair Value | 223.8 | 165.9 |
Short-term investments | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 11.7 | 0.9 |
Allowance for Expected Credit Losses | 0 | 0 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | $ 11.7 | $ 0.9 |
INVESTMENTS - Unrealized Losses
INVESTMENTS - Unrealized Losses (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | $ 118.9 | $ 36.1 |
Less than 12 months, unrealized loss | (0.9) | (0.1) |
12 months or more, fair value | 73.7 | 72.3 |
12 months or more, unrealized loss | (2.8) | (3.1) |
Total, fair value | 192.6 | 108.4 |
Total, unrealized loss | (3.7) | (3.2) |
U.S. Treasury securities and agencies | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 23 | 1.7 |
Less than 12 months, unrealized loss | (0.2) | 0 |
12 months or more, fair value | 2.6 | 2.4 |
12 months or more, unrealized loss | (0.1) | (0.1) |
Total, fair value | 25.6 | 4.1 |
Total, unrealized loss | (0.3) | (0.1) |
Municipal securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 7.8 | 3.1 |
Less than 12 months, unrealized loss | 0 | 0 |
12 months or more, fair value | 12.5 | 15.1 |
12 months or more, unrealized loss | (0.7) | (0.8) |
Total, fair value | 20.3 | 18.2 |
Total, unrealized loss | (0.7) | (0.8) |
Corporate debt securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 33.1 | 13.4 |
Less than 12 months, unrealized loss | (0.3) | 0 |
12 months or more, fair value | 34.3 | 35.1 |
12 months or more, unrealized loss | (1.2) | (1.3) |
Total, fair value | 67.4 | 48.5 |
Total, unrealized loss | (1.5) | (1.3) |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 14.2 | 4.1 |
Less than 12 months, unrealized loss | (0.1) | 0 |
12 months or more, fair value | 2.3 | 1.9 |
12 months or more, unrealized loss | (0.3) | (0.2) |
Total, fair value | 16.5 | 6 |
Total, unrealized loss | (0.4) | (0.2) |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 15.8 | 9.1 |
Less than 12 months, unrealized loss | (0.2) | (0.1) |
12 months or more, fair value | 18.1 | 13.4 |
12 months or more, unrealized loss | (0.5) | (0.6) |
Total, fair value | 33.9 | 22.5 |
Total, unrealized loss | (0.7) | (0.7) |
Other debt obligations | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 15.6 | 4.4 |
Less than 12 months, unrealized loss | (0.1) | 0 |
12 months or more, fair value | 3.9 | 4.4 |
12 months or more, unrealized loss | 0 | (0.1) |
Total, fair value | 19.5 | 8.8 |
Total, unrealized loss | (0.1) | (0.1) |
Total fixed maturities | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 109.5 | 35.8 |
Less than 12 months, unrealized loss | (0.9) | (0.1) |
12 months or more, fair value | 73.7 | 72.3 |
12 months or more, unrealized loss | (2.8) | (3.1) |
Total, fair value | 183.2 | 108.1 |
Total, unrealized loss | (3.7) | (3.2) |
Short-term investments | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Line Items] | ||
Less than 12 months, fair value | 9.4 | 0.3 |
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 | 9.4 | 0.3 |
Total, unrealized loss | $ 0 | $ 0 |
INVESTMENTS - Other Investments
INVESTMENTS - Other Investments (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Other investments | $ 4,400,000 | $ 4,400,000 | $ 4,400,000 | ||
Realized gains (losses) on investments | $ 0 | $ 0 | $ 0 | $ 0 |
INVESTMENTS - Contractual Matur
INVESTMENTS - Contractual Maturity (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Amortized Cost | ||
Due in one year or less | $ 39 | |
Due after one year through five years | 151.4 | |
Due five years through 10 years | 24.7 | |
Due after 10 years | 23.8 | |
Amortized Cost | 238.9 | $ 169.3 |
Fair Value | ||
Due in one year or less | 38.6 | |
Due after one year through five years | 149.1 | |
Due five years through 10 years | 24.5 | |
Due after 10 years | 23.3 | |
Total | $ 235.5 | $ 166.8 |
INVESTMENTS - Net Investment In
INVESTMENTS - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Net Investment Income [Line Items] | ||||
Realized gain value | $ 10.5 | $ 7 | $ 20.3 | $ 13.8 |
Investment expense | (0.5) | (0.2) | (1.1) | (0.3) |
Net investment income | 10 | 6.8 | 19.2 | 13.5 |
Interest on bonds | ||||
Net Investment Income [Line Items] | ||||
Realized gain value | 2.3 | 1 | 4 | 1.9 |
Interest on deposits and cash equivalents | ||||
Net Investment Income [Line Items] | ||||
Realized gain value | $ 8.2 | $ 6 | $ 16.3 | $ 11.9 |
INVESTMENTS - Credit Ratings (D
INVESTMENTS - Credit Ratings (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 | Dec. 31, 2023 | |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 238.9 | $ 169.3 |
Fair Value | 235.5 | 166.8 |
AAA | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 65 | 53 |
Fair Value | $ 64.1 | $ 52.1 |
AAA | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 27.20% | 31.20% |
AA+, AA, AA-, A-1 | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 102 | $ 59.4 |
Fair Value | $ 100.8 | $ 58.8 |
AA+, AA, AA-, A-1 | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 42.80% | 35.30% |
A+, A, A- | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 55.2 | $ 42.1 |
Fair Value | $ 54 | $ 41.2 |
A+, A, A- | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 22.90% | 24.70% |
BBB+, BBB, BBB- | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 16.7 | $ 14.8 |
Fair Value | $ 16.6 | $ 14.7 |
BBB+, BBB, BBB- | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 7.10% | 8.80% |
Standard & Poor's Global Rating, Total | AFS securities | Credit rating | ||
Debt Securities, Available-for-sale [Line Items] | ||
Concentration percentage (in percent) | 100% | 100% |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS - Balance Sheet Grouping (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
AFS securities | $ 235.5 | $ 166.8 |
Cash equivalents | 411.8 | 439.6 |
Total assets at fair value | 647.3 | 606.4 |
U.S. Treasury securities and agencies | ||
Assets | ||
AFS securities | 28.4 | 14.6 |
Municipal securities | ||
Assets | ||
AFS securities | 23.1 | 24.1 |
Corporate debt securities | ||
Assets | ||
AFS securities | 83.3 | 65.2 |
Residential mortgage-backed securities | ||
Assets | ||
AFS securities | 20.7 | 11.9 |
Commercial mortgage-backed securities | ||
Assets | ||
AFS securities | 41.4 | 29.8 |
Other debt obligations | ||
Assets | ||
AFS securities | 26.9 | 20.3 |
Total fixed maturities | ||
Assets | ||
AFS securities | 223.8 | 165.9 |
Short-term investments | ||
Assets | ||
AFS securities | 11.7 | 0.9 |
Level 1 | ||
Assets | ||
Cash equivalents | 411.8 | 439.6 |
Total assets at fair value | 450.3 | 453.8 |
Level 1 | U.S. Treasury securities and agencies | ||
Assets | ||
AFS securities | 27.7 | 13.3 |
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 | 27.7 | 13.3 |
Level 1 | Short-term investments | ||
Assets | ||
AFS securities | 10.8 | 0.9 |
Level 2 | ||
Assets | ||
Cash equivalents | 0 | 0 |
Total assets at fair value | 197 | 152.6 |
Level 2 | U.S. Treasury securities and agencies | ||
Assets | ||
AFS securities | 0.7 | 1.3 |
Level 2 | Municipal securities | ||
Assets | ||
AFS securities | 23.1 | 24.1 |
Level 2 | Corporate debt securities | ||
Assets | ||
AFS securities | 83.3 | 65.2 |
Level 2 | Residential mortgage-backed securities | ||
Assets | ||
AFS securities | 20.7 | 11.9 |
Level 2 | Commercial mortgage-backed securities | ||
Assets | ||
AFS securities | 41.4 | 29.8 |
Level 2 | Other debt obligations | ||
Assets | ||
AFS securities | 26.9 | 20.3 |
Level 2 | Total fixed maturities | ||
Assets | ||
AFS securities | 196.1 | 152.6 |
Level 2 | Short-term investments | ||
Assets | ||
AFS securities | 0.9 | 0 |
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 | Jun. 30, 2024 | Dec. 31, 2023 |
Carrying amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 300.1 | $ 299 |
Estimated Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 306.7 | $ 305.2 |
LOSS AND LOSS ADJUSTMENT EXPE_3
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Schedule of Reserve Balance (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||||||
Gross loss and LAE reserves, January 1 | $ 284.2 | $ 287.4 | ||||
Reinsurance recoverable on unpaid losses | (43.8) | (76.4) | ||||
Net loss and LAE reserves, January 1 | $ 324.1 | $ 176.1 | 324.1 | 176.1 | $ 240.4 | $ 211 |
Net incurred loss and LAE related to: | ||||||
Current year | 361.3 | 123.6 | ||||
Prior years | (4.6) | (0.8) | ||||
Total incurred | 190.3 | 59.5 | 356.7 | 122.8 | ||
Net paid loss and LAE related to: | ||||||
Current year | 153.5 | 58.7 | ||||
Prior years | 119.5 | 99 | ||||
Total paid | 273 | 157.7 | ||||
Net loss and LAE reserves, June 30 | 324.1 | 176.1 | 324.1 | 176.1 | ||
Plus reinsurance recoverable on unpaid losses | 51.7 | 70.4 | 51.7 | 70.4 | ||
Gross loss and LAE reserves, June 30 | $ 375.8 | $ 246.5 | $ 375.8 | $ 246.5 |
LOSS AND LOSS ADJUSTMENT EXPE_4
LOSS AND LOSS ADJUSTMENT EXPENSE RESERVES - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Insurance [Abstract] | ||
Incurred losses and LAE attributable to prior accident years | $ (4.6) | $ (0.8) |
REINSURANCE- Schedule of Compre
REINSURANCE- Schedule of Comprehensive Loss For Reinsurance (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Premiums written: | ||||
Direct | $ 250.1 | $ 128.1 | $ 523 | $ 251.9 |
Assumed | 58.1 | 16.9 | 115.9 | 27.8 |
Ceded | (44.6) | (67.2) | (91.3) | (137.1) |
Net premiums written | 263.6 | 77.8 | 547.6 | 142.6 |
Premiums earned: | ||||
Direct | 252.7 | 120.2 | 481.1 | 240.3 |
Assumed | 55.3 | 11.3 | 101.9 | 21.3 |
Ceded | (46.4) | (67.6) | (91.1) | (137.7) |
Net premiums earned | 261.6 | 63.9 | 491.9 | 123.9 |
Losses and LAE incurred: | ||||
Direct | 173.6 | 90.5 | 335.8 | 190.3 |
Assumed | 45.1 | 8.7 | 76.6 | 16.4 |
Ceded | (28.4) | (39.7) | (55.7) | (83.9) |
Net losses and LAE incurred | $ 190.3 | $ 59.5 | $ 356.7 | $ 122.8 |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) - Term Loan - USD ($) | 1 Months Ended | |
Jan. 27, 2022 | Jan. 31, 2022 | |
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 Lo
LONG-TERM DEBT - Schedule of Long Term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Accrued interest payable | $ 7.5 | $ 7.9 |
Unamortized discount and debt issuance costs and warrants | (7.4) | (8.9) |
Total | 300.1 | 299 |
Secured debt | Term Loan | ||
Debt Instrument [Line Items] | ||
Term Loan | $ 300 | $ 300 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 0% | 0% | 0% | 0% |
Federal income tax rate (in percent) | 21% |
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 | 6 Months Ended | 30 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | |
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | $ 0 | $ 1.9 | $ 0.1 | $ 7.5 | $ 29.9 |
Employee costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | 0 | 1.8 | 0.1 | 4.1 | 23.3 |
Real estate exit costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | 0 | 0 | 0 | 0 | 2.1 |
Other costs | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Total restructuring costs | $ 0 | $ 0.1 | $ 0 | $ 3.4 | $ 4.5 |
RESTRUCTURING COSTS - Restruc_2
RESTRUCTURING COSTS - Restructuring Costs Recorded In Consolidated Balance Sheets (Details) - Employee costs $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Restructuring activity: | |
Restructuring liability, beginning balance | $ 8.3 |
Expense incurred | 0.1 |
Payments | (8.4) |
Restructuring liability, ending balance | $ 0 |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) shares | Jun. 30, 2023 USD ($) | Jun. 30, 2024 USD ($) shares | Jun. 30, 2023 USD ($) | Oct. 31, 2021 tranche shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total share-based compensation expense | $ 3.8 | $ 5.2 | $ 8.4 | $ 7.7 | |
2020 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for issuance (in shares) | shares | 2 | 2 | |||
Other insurance expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total share-based compensation expense | $ 0.1 | 0.2 | $ 0.3 | 0.3 | |
Warrant | Other insurance expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total share-based compensation expense | 1 | 3.9 | 3.8 | 8.3 | |
Stock option expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total share-based compensation expense | 0.1 | 0.3 | 0.3 | 0.7 | |
Unrecognized compensation cost, options | 0.7 | $ 0.7 | |||
Unrecognized compensation cost, period of recognition | 2 years | ||||
Restricted stock unit expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total share-based compensation expense | 3.4 | 4.9 | $ 7.6 | 7 | |
Unrecognized compensation cost | 19.3 | $ 19.3 | |||
Unrecognized compensation cost, period of recognition | 4 years | ||||
Performance-based restricted stock unit expense | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total share-based compensation expense | 0.3 | $ 0 | $ 0.5 | $ 0 | |
Unrecognized compensation cost | $ 1.4 | $ 1.4 | |||
Unrecognized compensation cost, period of recognition | 3 years | ||||
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 - Shar
SHARE-BASED COMPENSATION - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 3.8 | $ 5.2 | $ 8.4 | $ 7.7 |
Restricted stock unit expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 3.4 | 4.9 | 7.6 | 7 |
Performance-based restricted stock unit expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.3 | 0 | 0.5 | 0 |
Stock option expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.1 | 0.3 | 0.3 | 0.7 |
Loss and loss adjustment expenses | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.4 | 0.2 | 0.8 | 0.3 |
Sales and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.2 | 0.1 | 0.3 | 0.2 |
Other insurance expense | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.1 | 0.2 | 0.3 | 0.3 |
Technology and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | 0.7 | 0.8 | 1.5 | 1.5 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Total share-based compensation expense | $ 2.4 | $ 3.9 | $ 5.5 | $ 5.4 |
SHARE-BASED COMPENSATION - RSU
SHARE-BASED COMPENSATION - RSU Activity (Details) - Restricted stock unit expense $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended |
Jun. 30, 2024 USD ($) $ / shares shares | |
Number of Shares | |
Beginning balance (in shares) | shares | 1.9 |
Granted (in shares) | shares | 0.1 |
Vested (in shares) | shares | (0.6) |
Forfeited, expired or canceled (in shares) | shares | 0 |
Ending balance (in shares) | shares | 1.4 |
Weighted-Average Grant Date Fair Value per Share | |
Beginning balance (in dollars per share) | $ / shares | $ 14.47 |
Granted (in dollars per share) | $ / shares | 58.96 |
Vested (in dollars per share) | $ / shares | 15.71 |
Forfeited, expired or canceled (in dollars per share) | $ / shares | 16.92 |
Ending balance (in dollars per share) | $ / shares | $ 17.32 |
Aggregate Intrinsic Value | |
Beginning balance | $ | $ 20.3 |
Vested | $ | 32.1 |
Ending balance | $ | $ 73.1 |
SHARE-BASED COMPENSATION - Opti
SHARE-BASED COMPENSATION - Option Activity (Details) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2024 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | |
Number of Shares | ||
Outstanding, beginning balance (in shares) | shares | 0.1 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | 0 | |
Forfeited, expired or canceled (in shares) | shares | 0 | |
Outstanding, ending balance (in shares) | shares | 0.1 | 0.1 |
Weighted-Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 33.68 | |
Granted (in dollars per share) | $ / shares | 0 | |
Exercised (in dollars per share) | $ / shares | 7.05 | |
Forfeited, expired and canceled (in dollars per share) | $ / shares | 82 | |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 33.99 | $ 33.68 |
Outstanding, weighted-average remaining contractual term (in years) | 3 years 9 months 18 days | 4 years 3 months 14 days |
Outstanding, aggregate intrinsic value | $ | $ 4.4 | $ 0.5 |
Exercised, aggregate intrinsic value | $ | $ 123.6 |
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 | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (7.8) | $ (36.7) | $ (14) | $ (77.6) |
Weighted-average common shares outstanding: basic (both Class A and B) (in shares) | 14.9 | 14.4 | 14.8 | 14.3 |
Weighted-average common shares outstanding: diluted (both Class A and B) (in shares) | 14.9 | 14.4 | 14.8 | 14.3 |
Loss per common share: basic (both Class A and B) (in dollars per share) | $ (0.52) | $ (2.55) | $ (0.95) | $ (5.43) |
Loss per common share: diluted (both Class A and B) (in dollars per share) | $ (0.52) | $ (2.55) | $ (0.95) | $ (5.43) |
LOSS PER SHARE - Schedule of An
LOSS PER SHARE - Schedule of Anti-Dilutive Securities (Details) - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 10.1 | 9.9 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 0.1 | 0.1 |
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 |
RSUs and PSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities (in shares) | 1.4 | 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 | 7.6 |
GEOGRAPHICAL BREAKDOWN OF GRO_3
GEOGRAPHICAL BREAKDOWN OF GROSS PREMIUMS WRITTEN (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Effects of Reinsurance [Line Items] | ||||
Total | $ 308.2 | $ 145 | $ 638.9 | $ 279.7 |
Texas | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 61.7 | 23.8 | 123.3 | 43.3 |
Georgia | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 41.1 | 15.8 | 80.5 | 29.7 |
Florida | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 28.4 | 2 | 44 | 3.8 |
Colorado | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 17.3 | 11.9 | 35.5 | 22.5 |
Pennsylvania | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 17.8 | 7.6 | 35.3 | 16.9 |
South Carolina | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 9.6 | 10.6 | 31.6 | 16.8 |
Arizona | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 12.7 | 6 | 26.6 | 10.7 |
Ohio | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 8.6 | 4.9 | 20.1 | 8.6 |
Maryland | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 7.1 | 3 | 17.9 | 6.3 |
Utah | ||||
Effects of Reinsurance [Line Items] | ||||
Total | 7.3 | 7.4 | 16.1 | 14.6 |
All others states | ||||
Effects of Reinsurance [Line Items] | ||||
Total | $ 96.6 | $ 52 | $ 208 | $ 106.5 |
Geographic Concentration Risk | Gross Written Premiums | United States | ||||
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) | 20% | 16.40% | 19.30% | 15.50% |
Geographic Concentration Risk | Gross Written Premiums | Georgia | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 13.30% | 10.90% | 12.60% | 10.60% |
Geographic Concentration Risk | Gross Written Premiums | Florida | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 9.20% | 1.40% | 6.90% | 1.40% |
Geographic Concentration Risk | Gross Written Premiums | Colorado | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 5.60% | 8.20% | 5.60% | 8% |
Geographic Concentration Risk | Gross Written Premiums | Pennsylvania | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 5.80% | 5.20% | 5.50% | 6% |
Geographic Concentration Risk | Gross Written Premiums | South Carolina | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 3.10% | 7.30% | 4.90% | 6% |
Geographic Concentration Risk | Gross Written Premiums | Arizona | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 4.10% | 4.10% | 4.20% | 3.80% |
Geographic Concentration Risk | Gross Written Premiums | Ohio | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 2.80% | 3.40% | 3.10% | 3.10% |
Geographic Concentration Risk | Gross Written Premiums | Maryland | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 2.30% | 2.10% | 2.80% | 2.30% |
Geographic Concentration Risk | Gross Written Premiums | Utah | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 2.40% | 5.10% | 2.50% | 5.20% |
Geographic Concentration Risk | Gross Written Premiums | All others states | ||||
Effects of Reinsurance [Line Items] | ||||
Concentration percentage (in percent) | 31.40% | 35.90% | 32.60% | 38.10% |