Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 23, 2022 | Jun. 30, 2021 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2021 | ||
Document Transition Report | false | ||
Entity File Number | 001-39484 | ||
Entity Registrant Name | METROMILE, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 84-4916134 | ||
Entity Address, Address Line One | 425 Market Street #700 | ||
Entity Address, City or Town | San Francisco | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94105 | ||
City Area Code | 888 | ||
Local Phone Number | 242-5204 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 128,221,885 | ||
Documents Incorporated by Reference | None. | ||
Entity Public Float | $ 809 | ||
Amendment Flag | false | ||
Entity Central Index Key | 0001819035 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Auditor Firm ID | 659 | ||
Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | ||
Trading Symbol | MILE | ||
Security Exchange Name | NASDAQ | ||
Warrant | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of common stock at an exercise price of $11.50 per share | ||
Trading Symbol | MILEW | ||
Security Exchange Name | NASDAQ |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Moss Adams LLP |
Auditor Firm ID | 659 |
Auditor Location | San Francisco, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Investments | ||
Marketable securities - restricted (amortized cost of $62,741 and $24,634) | $ 62,625 | $ 24,651 |
Total investments | 62,625 | 24,651 |
Cash and cash equivalents | 120,940 | 19,150 |
Restricted cash and cash equivalents | 42,881 | 31,038 |
Premiums receivable | 16,839 | 16,329 |
Reinsurance recoverable on paid loss | 0 | 8,475 |
Reinsurance recoverable on unpaid loss | 0 | 33,941 |
Prepaid reinsurance premium | 0 | 13,668 |
Prepaid expenses and other assets | 20,874 | 12,058 |
Deferred transaction costs | 0 | 3,581 |
Deferred policy acquisition costs, net | 1,433 | 656 |
Telematics devices, improvements and equipment, net | 13,654 | 12,716 |
Website and software development costs, net | 25,866 | 18,401 |
Digital assets, net | 803 | 0 |
Intangible assets | 7,500 | 7,500 |
Total assets | 313,415 | 202,164 |
Liabilities | ||
Loss and loss adjustment expense reserves | 73,438 | 57,093 |
Ceded reinsurance premium payable | 0 | 27,000 |
Payable to carriers - premiums and LAE, net | 340 | 849 |
Unearned premium reserve | 15,726 | 16,070 |
Deferred revenue | 5,601 | 5,817 |
Accounts payable and accrued expenses | 10,820 | 8,222 |
Payable for securities | 422 | 0 |
Notes payable | 0 | 51,934 |
Warrant liability | 1,156 | 83,652 |
Other liabilities | 19,524 | 8,554 |
Total liabilities | 127,027 | 259,191 |
Leases, commitments and contingencies (Note 12) | ||
Convertible preferred stock, $0.0001 par value; 10,000,000 and 89,775,268 shares authorized as of December 31, 2021, and December 31, 2020, respectively; 0 and 68,776,614 shares issued and outstanding as of December 31, 2021, and December 31, 2020, respectively; liquidation preference of $0 and $302,397 as of December 31, 2021, and December 31, 2020, respectively | 0 | 304,469 |
Stockholders’ equity (deficit) | ||
Common stock, $0.0001 par value; 640,000,000 and 111,702,628 shares authorized as of December 31, 2021, and December 31, 2020, respectively; 128,221,885 and 8,992,039 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively | 13 | 1 |
Accumulated paid-in capital | 769,525 | 5,482 |
Note receivable from executive | 0 | (415) |
Accumulated other comprehensive (loss) income | (116) | 11 |
Accumulated deficit | (583,034) | (366,575) |
Total stockholders' equity (deficit) | 186,388 | (361,496) |
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) | $ 313,415 | $ 202,164 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Investments | ||
Amortized cost | $ 62,741 | $ 24,634 |
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit) | ||
Preferred stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock authorized (in shares) | 10,000,000 | 89,775,268 |
Preferred stock issued (in shares) | 0 | 68,776,614 |
Preferred stock outstanding (in shares) | 0 | 68,776,614 |
Liquidation preference | $ 0 | $ 302,397 |
Stockholders’ equity (deficit) | ||
Common stock par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock authorized (in shares) | 640,000,000 | 111,702,628 |
Common stock issued (in shares) | 128,221,885 | 8,992,039 |
Common stock outstanding (in shares) | 128,221,885 | 8,992,039 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | ||
Premiums earned, net | $ 75,601 | $ 12,464 |
Investment income | 117 | 523 |
Other revenue | 29,179 | 22,077 |
Total revenue | 104,897 | 35,064 |
Costs and expenses | ||
Losses and loss adjustment expenses | 88,467 | 21,208 |
Policy servicing expense and other | 20,304 | 16,813 |
Sales, marketing and other acquisition costs | 102,989 | 5,483 |
Research and development | 16,027 | 8,211 |
Amortization of capitalized software | 11,306 | 11,188 |
Other operating expenses | 63,510 | 16,981 |
Total costs and expenses | 302,603 | 79,884 |
Loss from operations | (197,706) | (44,820) |
Other expense | ||
Interest expense | 15,974 | 6,067 |
Impairment on digital assets | 183 | 0 |
Increase in fair value of stock warrant liability | 2,596 | 69,294 |
Total other expense | 18,753 | 75,361 |
Loss before taxes | (216,459) | (120,181) |
Income tax benefit | 0 | (84) |
Net loss | $ (216,459) | $ (120,097) |
Net loss per share, basic (in dollars per share) | $ (1.89) | $ (13.51) |
Net loss per share, diluted (in dollars per share) | $ (1.89) | $ (13.51) |
Weighted-average shares used in computing basic net loss per share (in shares) | 114,609,563 | 8,890,631 |
Weighted-average shares used in computing diluted net loss per share (in shares) | 114,609,563 | 8,890,631 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (216,459) | $ (120,097) |
Unrealized net loss on marketable securities | (127) | (49) |
Total comprehensive loss | $ (216,586) | $ (120,146) |
CONSOLIDATED STATEMENTS OF CONV
CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ (DEFICIT) EQUITY - USD ($) $ in Thousands | Total | Previously Reported | Retroactive application of recapitalization | Common Stock | Common StockPreviously Reported | Common StockRetroactive application of recapitalization | APIC | APICPreviously Reported | Note Receivable | Note ReceivablePreviously Reported | Accumulated Other Comprehensive Income | Accumulated Other Comprehensive IncomePreviously Reported | Accumulated Deficit | Accumulated DeficitPreviously Reported |
Beginning balance (in shares) at Dec. 31, 2019 | 68,776,614 | 67,728,286 | 1,048,328 | |||||||||||
Beginning balance at Dec. 31, 2019 | $ 304,469 | $ 304,469 | ||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 68,776,614 | |||||||||||||
Ending balance at Dec. 31, 2020 | $ 304,469 | |||||||||||||
Beginning balance (in Shares) at Dec. 31, 2019 | 8,865,510 | 8,730,377 | 135,133 | |||||||||||
Beginning balance at Dec. 31, 2019 | (243,009) | $ (243,009) | $ 1 | $ 1 | $ 3,816 | $ 3,816 | $ (408) | $ (408) | $ 60 | $ 60 | $ (246,478) | $ (246,478) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Exercises and vested portion of common stock options (in shares) | 126,529 | |||||||||||||
Exercises and vested portion of stock options | 209 | 209 | ||||||||||||
Interest on stock purchase promissory note | (7) | (7) | ||||||||||||
Unrealized net gain on marketable securities | (49) | (49) | ||||||||||||
Stock-based compensation | 1,457 | 1,457 | ||||||||||||
Net loss | (120,097) | (120,097) | ||||||||||||
Ending balance (in Shares) at Dec. 31, 2020 | 8,992,039 | |||||||||||||
Ending balance at Dec. 31, 2020 | $ (361,496) | $ 1 | 5,482 | (415) | 11 | (366,575) | ||||||||
Convertible Preferred Stock | ||||||||||||||
Exercise of convertible preferred stock warrants (in shares) | 3,974,655 | |||||||||||||
Exercise of convertible preferred stock warrants | $ 132,718 | |||||||||||||
Conversion of preferred stock to common (in shares) | (72,751,269) | |||||||||||||
Conversion of preferred stock to common | $ (437,187) | |||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | |||||||||||||
Ending balance at Dec. 31, 2021 | $ 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||
Exercises and vested portion of common stock options (in shares) | 1,103,380 | |||||||||||||
Exercises and vested portion of stock options | 2,299 | 2,299 | ||||||||||||
Unrealized net gain on marketable securities | (127) | (127) | ||||||||||||
Conversion of promissory note | 0 | (415) | 415 | |||||||||||
RSUs withheld for tax purposes | (422) | (422) | ||||||||||||
Conversion of preferred stock to common (in shares) | 72,751,269 | |||||||||||||
Conversion of preferred stock to common | 437,194 | $ 7 | 437,187 | |||||||||||
Business Combination and PIPE financing (in shares) | 43,894,156 | |||||||||||||
Business Combination and PIPE financing | 290,957 | $ 4 | 290,953 | |||||||||||
401K match with MILE stock (in shares) | 93,126 | |||||||||||||
401K match with MILE stock | 539 | 539 | ||||||||||||
Stock-based compensation (in shares) | 1,387,915 | |||||||||||||
Stock-based compensation | 33,903 | $ 1 | 33,902 | |||||||||||
Net loss | (216,459) | (216,459) | ||||||||||||
Ending balance (in Shares) at Dec. 31, 2021 | 128,221,885 | |||||||||||||
Ending balance at Dec. 31, 2021 | $ 186,388 | $ 13 | $ 769,525 | $ 0 | $ (116) | $ (583,034) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (216,459) | $ (120,097) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation and amortization | 17,221 | 17,004 |
Stock-based compensation | 33,902 | 1,457 |
Change in fair value of warrant liability | 2,596 | 69,294 |
Telematics devices unreturned | 2,084 | 682 |
Amortization of debt issuance costs | 11,695 | 687 |
Noncash interest and other expense | 4,701 | 1,136 |
Changes in operating assets and liabilities: | ||
Premiums receivable | (510) | 273 |
Accounts receivable | 4,496 | 591 |
Reinsurance recoverable on paid loss | 8,475 | 4,066 |
Reinsurance recoverable on unpaid loss | 33,941 | (5,104) |
Prepaid reinsurance premium | 13,668 | (764) |
Prepaid expenses and other assets | 2,433 | 2,920 |
Deferred transaction costs | 3,581 | (3,581) |
Deferred policy acquisition costs, net | (2,110) | (976) |
Digital assets, net | (986) | 0 |
Accounts payable and accrued expenses | 2,643 | 2,119 |
Ceded reinsurance premium payable | (27,000) | (9,864) |
Loss and loss adjustment expense reserves | 16,345 | 4,871 |
Payable to carriers - premiums and LAE, net | (509) | (1,704) |
Unearned premium reserve | (344) | 899 |
Deferred revenue | (216) | 617 |
Deferred tax liability | 0 | (84) |
Other liabilities | (4,769) | 3,365 |
Net cash used in operating activities | (95,122) | (32,193) |
Cash flows from investing activities: | ||
Purchases of telematics devices, improvements, and equipment | (7,545) | (6,903) |
Payments relating to capitalized website and software development costs | (19,269) | (13,333) |
Net change in payable/(receivable) for securities | 422 | 225 |
Purchase of securities | (63,960) | (26,646) |
Sales and maturities of marketable securities | 25,587 | 48,462 |
Net cash (used in) provided by investing activities | (64,765) | 1,805 |
Cash flow from financing activities: | ||
Proceeds from notes payable | 2,015 | 37,480 |
Payment on notes payable | (69,351) | 0 |
Proceeds from merger with INSU II, net of issuance costs | 336,469 | 0 |
Proceeds from exercise of common stock options and warrants | 4,387 | 209 |
Net cash provided by financing activities | 273,520 | 37,689 |
Net increase in cash, cash equivalents, restricted cash and restricted cash equivalents | 113,633 | 7,301 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 50,188 | 42,887 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 163,821 | 50,188 |
Supplemental cash flow data: | ||
Cash paid for interest | 3,164 | 2,797 |
Non-cash investing and financing transactions: | ||
Warrants assumed from Business Combination | 45,516 | 0 |
Net exercise of preferred stock warrants | 56,160 | 0 |
Net exercise of promissory note | 415 | 0 |
Capitalized website and software development costs included in accrued liabilities | 439 | 0 |
Capitalized stock-based compensation | 2,316 | 522 |
Reclassification of liability to equity for vesting of stock options | 169 | 0 |
Preferred stock warrant issued in conjunction with note payable | $ 0 | $ 12,620 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Significant Accounting Policies Overview Description of Business Metromile Operating Company (“Metromile”) was incorporated in the State of Delaware on January 14, 2011 as Fair Auto, Inc. and changed its name to MetroMile, Inc. in May 2012 and to Metromile Operating Company in February 2021. Metromile, through its wholly owned subsidiary, Metromile Insurance Services LLC (the “GA Subsidiary”), sells pay-per-mile auto insurance to consumers in eight states: California, Washington, Oregon, Illinois, Pennsylvania, Virginia, New Jersey, and Arizona. Metromile has a wholly owned subsidiary, Metromile Insurance Company (the “Insurance Company”), which focuses on property and casualty insurance. In January 2019, Metromile formed Metromile Enterprise Solutions, LLC (“Enterprise”), a wholly owned subsidiary, which focuses on selling its insurance solution technology to third party customers. Metromile, the GA Subsidiary, the Insurance Company, and Enterprise collectively are referred to as the “Company.” The Insurance Company provides automobile insurance to customers with premiums based on a flat rate plus an adjustable rate based on actual miles driven. To record miles driven, the GA Subsidiary may provide drivers with a telematics device, the Metromile Pulse, which plugs into a car’s on-board diagnostic system to capture mileage. The GA Subsidiary acts as a full-service insurance General Agent (“GA”). As a full-service GA, the subsidiary provides all policy pricing, binding, and servicing (payments and customer service) for the policyholders. Until late 2016, the GA Subsidiary underwriting carrier was National General Insurance (“NGI”) and its related carriers. The GA Subsidiary began transitioning NGI-issued policies upon renewal in late 2016 to the Insurance Company and has only a small number of policies with NGI as of December 31, 2020. The GA Subsidiary is the sole agent for the Insurance Company. NGI handles claims for the GA Subsidiary’s policies underwritten by NGI and its related carriers, for which it pays NGI a fee for the loss adjustment expense (“LAE”). NGI bears the risk of loss under these policies. Accordingly, the Company has no exposure to claims that would require an accrual for those NGI-related losses. The Insurance Company bears risk of loss under all insurance policies it underwrites. The financial statements include reserves for future claims based on actuarial estimates for the Insurance Company. The Loss and LAE reserves as of December 31, 2021 and 2020 were $73.4 million and $57.1 million, respectively. In February 2021, the Company completed ("the Closing") a business combination (the “Merger”) with INSU Acquisition Corp. II (“INSU”), where the Metromile merged with a wholly-owned subsidiary of INSU, with Metromile surviving the Merger as a wholly-owned subsidiary of INSU. The Merger was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States (“GAAP”). Under this method of accounting, INSU, who was the legal acquirer, is treated as the “acquired” company for financial reporting purposes and the Company is treated as the accounting acquirer. Accordingly, all historical financial information presented in the accompanying consolidated financial statements represents the accounts of Metromile and its wholly owned subsidiaries as if Metromile is the predecessor to the Company. The shares and net loss per common share, prior to the Merger, have been retroactively restated as shares reflecting conversion at the exchange ratio of 1.01547844 established in the Merger Agreement. Acquisition of Metromile, Inc. by Lemonade, Inc. On November 8, 2021, the Company entered into an Agreement and Plan of Merger (the “Agreement”) with Lemonade, Inc., a Delaware corporation (“Lemonade”), Citrus Merger Sub A, Inc., a Delaware corporation and a wholly-owned subsidiary of Lemonade (“Acquisition Sub I”) and Citrus Merger Sub B, LLC, a Delaware limited liability company and wholly owned subsidiary of Lemonade (“Acquisition Sub II”), pursuant to which (i) Acquisition Sub I will merge with and into Metromile (the “First Merger” and the effective time of the First Merger, the “First Effective Time”), with Metromile continuing as the surviving entity (the “Initial Surviving Corporation”), and (ii) the Initial Surviving Corporation will merge with and into Acquisition Sub II (the “Second Merger”), with Acquisition Sub II continuing as the surviving entity as a wholly owned subsidiary of Lemonade (the First Merger, the Second Merger and the other transactions contemplated by the Agreement, collectively, the “Proposed Transaction”). The Proposed Transaction implies a fully diluted equity value of approximately $500 million, or an enterprise value of about $340 million net of unrestricted cash and cash equivalents as September 30, 2021. In accordance with the Agreement, at the First Effective Time, each share of our common stock issued and outstanding immediately prior to the First Effective Time will be converted into the right to receive 0.05263 (the “Exchange Ratio”) validly issued, fully paid and non-assessable shares of common stock of Lemonade, par value $0.00001 per share (“Lemonade Common Stock”). The Proposed Transaction is conditioned on customary closing conditions, including receipt of applicable regulatory approvals, and is expected to close in the second quarter of 2022. The applicable waiting period for the Proposed Transaction under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired and on February 1, 2022, the Proposed Transaction was approved by our stockholders. For additional information related to the Proposed Transaction, please see Note 4, Business Combinations included in this Annual Report on Form 10-K and our Current Report on Form 8-K filed with the SEC on November 9, 2021 as well as the proxy statement/prospectus filed with the SEC on December 29, 2021. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. of America (“GAAP”) and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). References to the Accounting Standard Codification (“ASC”) and Accounting Standard Updates (“ASU”) included hereinafter refer to the Accounting Standards Codification and Updates established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative GAAP. The consolidated financial statements include the accounts of Metromile, Inc. and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. Liquidity and Capital Resources In the first quarter of 2020, the global pandemic caused by COVID-19 breached the U.S. and resulted in shelter-in-place orders across the country and insurance department bulletins limiting the actions that insurance carriers could take and reducing the amount of premiums promptly collected in the short term. These factors resulted in a significant decline in both revenues and losses of the Insurance Company. In addition, in response to these events, the Company performed a reduction in force of 125 employees to further align costs with revenue and to extend the capital runway. While these impacts moderated in 2021, there remains a risk that previous disruptions could return or new issues emerge as time amidst the pandemic perpetuates. The Company will continue to monitor and proactively adapt to the changing conditions and effects of COVID-19, but given the uncertainty about the duration or magnitude of the pandemic, it is not possible to reliably estimate the impact on the Company's financial condition, operations, and workforce. Reclassifications Reclassifications have been made to the prior year balances to conform to the current year presentation. In particular, accounts receivable has been combined with prepaid expenses and other assets into a single line on the consolidated balance sheets. The reclassifications had no effect on stockholders’ deficit or net loss after taxes as previously reported. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. The Company’s principal estimates include unpaid losses and LAE reserves; the fair value of investments; the fair value of share-based awards; the fair value of the warrant liability; premium refunds to policyholders; reinsurance recoverable on unpaid loss; and the valuation allowance for income taxes. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ materially from these estimates. Summary of Significant Accounting Policies Revenue Recognition Insurance Services The Company’s insurance services are accounted for in accordance with Topic 944, Insurance. Policies are written for six-month terms and are considered short-duration contracts for the purposes of accounting under U.S. GAAP. The premium for the policies provides for a base rate per month for the entire policy term, plus a per-mile rate multiplied by the mileage driven each day (based on data from the telematics device subject to a daily maximum). Upon the binding of the policy, the customer pays at least the first month’s base rate and then is billed monthly in arrears for the mileage-based premium portion of the policy plus each subsequent month’s base rate not otherwise prepaid upon binding of the policy. Base premiums are recognized ratably over the policy term and mileage-based premiums are recognized monthly as incurred. All earned premiums are presented net of bad debt expense in the Company’s consolidated statement of operations. Investment Income Investment income is recorded as earned. Investment income consists primarily of interest on the Company’s highly liquid fixed income securities and is recognized on an accrual basis. Other Revenue Other revenue principally consists of enterprise revenue discussed below, reinsurance profit commissions based on performance of the ceded business, commission on NGI policies, and revenue related to policy acquisition costs as part of the reinsurance arrangement as described in Note 10, Reinsurance. The commission on NGI policies is recognized on a net basis and was insignificant in the periods presented. The revenue related to the acquisition costs for policies newly ceded to the reinsurers is recognized as the policies become part of the reinsurance arrangement. No amounts are due back to the reinsurers should a ceded policy cancel after entering the reinsurance arrangement. Enterprise services are accounted for by applying the requirements of Topic 606, Revenue from Contracts with Customers. Topic 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, references to Topic 606 used herein refer to both Topic 606 and Subtopic 340-40. The Company accounts for revenue contracts with customers by applying the requirements of Topic 606, which includes the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation The Company has developed technologies intended for internal use to service their insurance business and through its enterprise services offers these products and services to third party customers. The Company also has referral agreements with third party carriers and ad exchange agreements whereby the Company can receive consideration for such services. As such, the Company has three categories of revenue agreements that are included within the scope of Topic 606: 1) subscription and professional services agreements, 2) referral agreements, and 3) ad exchange agreements. For the periods presented, the Company’s revenues from referral and ad exchange agreements have not been significant. The Company’s technology agreements include software subscription-as-a-service (“SaaS”) which provides the customer with the right to access the Company’s core software via a hosted solution. Customers who purchase the SaaS service also receive technical support and access to updates and upgrades. The Company’s performance obligations related to its SaaS offering is a stand-ready obligation to provide the customer with continuous access to the hosted service as well as to provide updates/upgrades and technical support. Access to the platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. The Company recognizes revenue ratably because the customer receives and consumes the benefits of the platform throughout the contract period. During the year ended December 31, 2020, the Company sold a perpetual license for its software. Revenue for this license was recognized up-front upon delivery of the software license. There were no perpetual license sales in 2021. In addition, the Company offers customization and implementation services for customers. Customization services are provided when a customer requests the development of a specific feature and/or functionality that is not currently present within the solution as of the date of execution of the agreement. Implementation services include installation, custom builds, data migration, integration to other application programming interfaces, and training of customer personnel. Both customization and implementation services are priced based on mutual negotiation and subject to Company approvals. Occasionally, these services are offered at a discount or included as a bundle with pricing for the software or SaaS products. These services are not considered to represent distinct performance obligations and when present are combined with the overall subscription service. Revenue recognition begins when all services have been completed and are made available to customers. Deferred Contract Acquisition Costs Prior to the adoption of Topic 606 on January 1, 2019, sales commissions associated with the Company’s technology agreements were not deferred and expensed as incurred. Under Topic 606, the Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the entity expects to recover such costs. Sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Contract acquisition costs are accrued and capitalized upon execution of the sales contract by the customer. The Company allocates commission costs to the performance obligations in an arrangement consistent with the allocation of the transaction price. The portion of these costs that are attributed to performance obligations delivered over time are capitalized and recorded in prepaid expense and other current assets on the Company’s consolidated balance sheets. Deferred contract costs on the Company’s consolidated balance sheets were approximately $0.1 million and $0.2 million as of December 31, 2021 and 2020, respectively. Amortization expense related to deferred contract costs through the years ended December 31, 2021 and 2020 was not significant. There was no impairment loss in relation to the costs capitalized for the periods presented. Deferred Revenue The deferred revenue balance consists of subscription and professional services for the Company’s technology agreements which have been invoiced in advance of when the revenue recognition criteria are met. The Company’s subscription contracts are typically invoiced to its customers at the beginning of the term, or in some instances, such as in multi-year arrangements, in annual installments. Accordingly, the Company’s deferred revenue balance does not include revenues for future years of multi-year non-cancellable contracts that have not yet been billed. The Company recognizes subscription revenue ratably over the contract term beginning on the date that services are made available to customers, which may be after the contract commencement date if additional customization or implementation services are required to make the subscription service available to customers. On the contract commencement date, the Company records amounts due in accounts receivable and in deferred revenue. To the extent the Company bills customers in advance of the contract commencement date, the accounts receivable and corresponding deferred revenue amounts are netted to zero on the consolidated balance sheets, unless such amounts have been paid as of the balance sheet date. The Company recognized $2.9 million and $2.3 million of revenue during the years ended December 31, 2021, and 2020, respectively, that was previously included in the deferred revenue. Remaining Performance Obligations Remaining performance obligations represent contracted revenues that are non-cancellable and have not yet been recognized due to unsatisfied or partially satisfied performance obligations. This includes deferred revenues and amounts that will be invoiced and recognized as revenues in future periods. As of December 31, 2021 and 2020, future estimated revenue related to performance obligations for subscriptions with terms of more than one year that are unsatisfied or partially unsatisfied at the end of the reporting periods was approximately $14.3 million and $17.2 million, respectively. As of December 31, 2021 and December 31, 2020 the Company expects to recognize revenue on approximately 66% and 51% of these unsatisfied performance obligations, respectively over the following 24 months and the remainder thereafter. Losses and Loss Adjustment Expenses and Loss and Loss Adjustment Expenses Reserves The Insurance Company’s losses and LAE are presented net of any reinsurance and charged to income as incurred. The liabilities for unpaid losses and LAE represent the estimated liabilities for reported claims, claims incurred but not yet reported, and the related LAE. Losses and loss adjustment expenses also includes the LAE related to NGI as well as LAE incurred directly, including claims personnel and related expenses, compensation related to customer experience, depreciation on telematics devices, packaging and postage for shipping devices to customers, fulfillment service center costs, and third-party web-hosting costs. Liability for unpaid losses and LAE for policies underwritten by the Insurance Company represents management’s best estimate of the ultimate net cost of all reported and unreported losses incurred during the years ended December 31, 2021 and prior. The reserves for unpaid losses and LAE are estimated using individual case-basis valuations and statistical analyses. Estimated reserves are computed in accordance with accepted actuarial standards and principles. Several different actuarial approaches are considered, and reserve estimates may rely on a single or multiple techniques, depending on the appropriateness of the technique in a given situation. One branch of techniques that is frequently relied upon belongs to chain ladder methods in which data is aggregated into appropriate accident periods (when a claim occurred) and historical loss patterns are applied to actual paid losses and reported losses (paid losses plus individual case reserves as established by claim adjusters). The chain ladder method uses a ratio of losses from consecutive periods to calculate a development factor amongst various accident periods at similar maturities. An age-to-age factor is the expected development for future accident periods at a similar maturity. This is judgmentally selected based on a variety of inputs including, but not limited to, industry trends, company-specific trends, changes in claims handling practices, and changes in judicial environment and other external influences. Age-to-age factors are then multiplied and applied to the known losses to estimate the ultimate loss. The primary assumption of this approach is that historical development patterns are predictive of how current and future accident periods will develop. Modifications and variations of this approach can be made to better address certain issues that may arise, such as a sudden change in claim reserving process from claim adjusters, changes in payment and closure rate of claims, and external factors. Large losses, severe weather events, and other catastrophic events may significantly increase the variance of development patterns. These may be capped or excluded in the data and analyzed separately. The use of these methods on paid data as opposed to reported data has both benefits and drawbacks. For a sufficiently large dataset, paid data tends to be more stable, but may finalize later, creating additional uncertainty and potential to both over- and under-estimate reserves. For newer, immature accident periods, approaches using paid data may create very volatile estimates as a relatively small amount has been paid, which is then multiplied by a large multiplier from the age-to-age factors as described above. Reported data includes payments made to date as well as the best estimate from claim adjusters of future payments. The claim adjusters are able to review each claim and incorporate facts about each individual event to estimate losses on a claim-by-claim basis. Reported data tends to require less future development than paid data, which decreases the potential variance from the ultimate amount to be paid for a claim. It may however be influenced by changes in claims reserving and settlement practices, which need to be accounted for when using historical data to predict future liabilities. The estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in such estimates, management believes the reserves for losses and LAE are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known; such adjustments are included in the current year’s operations. Salvage and subrogation recoverables are estimated using the case basis method or historical statistics. Salvage and subrogation estimated recoverables are deducted from the liability for unpaid losses and LAE. Reinsurance The Company enters into ceded reinsurance contracts to protect its business from losses due to concentration of risk and to manage its operating leverage ratios. The Company has entered into quota-share reinsurance agreements with reinsurers under which risks are covered on a pro-rata basis for all policies underwritten by the Insurance Company. Premiums ceded to reinsurers are reported as a reduction of premiums written, and expenses incurred in connection with ceded policies have been accounted for as a reduction of the Company’s related deferred policy acquisition costs. The Company is exposed to credit risk from reinsurance recoverables and prepaid reinsurance premiums, which is mitigated by using a trust account. Cash, Cash Equivalents and Restricted Cash For purposes of the consolidated financial statements, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. The Company’s operating cash is held in an overnight sweep account. The Company’s cash is maintained in checking accounts, money market funds, and other highly liquid fixed income investments. Certain of the Company’s cash accounts are restricted. The Company holds certificates of deposits as collateral on its letters of credit in conjunction with its office leases and corporate credit cards. As part of the Company’s debt arrangement, a certain cash minimum must be maintained in a separate bank account as part of the debt covenants. The Company also collects insurance policy premiums that it holds in a segregated account for transmittal to the applicable underwriting carrier or for the benefit of policyholders for insurance-related claims. Cash held by the Insurance Company is restricted for use by the Insurance Company for the benefit of its policyholders. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk, to the extent of the amounts recorded on the consolidated balance sheets, consist principally of cash and marketable securities. The Company, at times, maintains cash balances with its primary bank in excess of Federal Deposit Insurance Corporation limits. The Company places its cash and cash equivalents with financial institutions with high credit standing. The Company places its excess cash in marketable investment grade securities. There are no significant concentrations in any one issuer of debt securities. The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of the policy coverage, and therefore the Company will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk. The Company did not have any customers whose revenue or account receivable balance individually represented 10% or more of the Company’s total revenues or accounts receivable, respectively, during the years presented. However, one customer made up 88.2% of the Company’s Enterprise business solutions segment revenue (see Note 18, Segment and Geographic Information). Marketable Securities The Company classifies marketable investment securities as available-for-sale. Interest income and dividends on securities are recognized in income on an accrual basis. Premiums and discounts on debt securities are amortized as an adjustment to interest income using the interest method. These securities are reported at their estimated fair value with unrealized gains and losses reported as a separate component of comprehensive income in stockholders’ deficit and classified into unrestricted and restricted marketable securities. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Certain marketable securities are restricted as they are held by the Insurance Company and are either pledged as statutory deposits for state licenses or restricted as to the distribution of the assets of the Insurance Company under the regulations of the State of Delaware. Telematics Devices, Improvements, and Equipment, Net Telematics devices, improvements, and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally estimated to be three Website and Software Development Costs, Net Costs related to the planning and post-implementation phases of the Company’s website and software development efforts are recorded as an operating expense. Direct costs incurred in the development phase of major development efforts and upgrades are capitalized and amortized using the straight-line method over an estimated useful life, generally estimated to be three years. Deferred Policy Acquisition Costs (“DPAC”) The Company defers sales commissions and expenses, marketing and underwriting costs, net of reinsurance ceding commission, directly relating to the successful acquisition of policies that the GA Subsidiary binds, and costs related to written premiums to the extent they are considered recoverable. These costs are then expensed over the customer’s policy term including estimated renewal periods. The method followed to determine the deferred policy acquisition costs limits the deferral to its realizable value by considering estimated future claims and expenses to be incurred as premiums are earned. Changes in estimates, if any, are recorded in the accounting period in which changes are determined. When anticipated losses, LAE, commissions, and other policy acquisition costs exceed recorded unearned premium, any future premiums on existing policies, and anticipated investment income on existing policies, a premium deficiency reserve is recognized by recording a reduction to DPAC with a corresponding charge to operations. The Company does not include anticipated investment income as a factor in the premium deficiency calculations. The Company concluded that no premium deficiency adjustments were necessary through December 31, 2021 and 2020. Any excess ceding commissions over and above the portion that represents a recovery of deferred policy acquisition costs is recorded as a deferred liability and amortized over the same period in which the related premiums are earned. Impairment of Long-Lived Assets The Company evaluates the carrying amount of its long-lived assets, primarily telematics devices, improvements, equipment, website and software development costs, and policy acquisition costs for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses recoverability using undiscounted cash flows attributed to that asset. If impairment has occurred, any excess of the carrying value over the fair value is recorded as a loss. No impairment occurred during the years presented. Indefinite-lived intangible assets, such as the Company’s insurance licenses included as intangible assets on the accompanying consolidated balance sheets, are subject to annual impairment testing. On an annual basis or more frequently if a triggering event occurs, the fair value of indefinite-lived intangible assets are evaluated to determine if an impairment charge is required. Digital Assets, Net During the year ended December 31, 2021, the Company purchased an aggregate of $1.0 million in digital assets, comprised solely of bitcoin. The Company currently accounts for these digital assets as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. The Company has ownership of and control over the purchased bitcoin asset and uses third-party custodial services to secure it. The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheets at cost, net of any impairment losses incurred since acquisition. An impairment analysis is performed at each reporting period to identify whether events or changes in circumstances, in particular decreases in the quoted prices on active exchanges, indicate that it is more likely than not that digital assets held by the Company are impaired. The fair value of digital assets is determined on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that the Company has determined is its principal market for bitcoin (Level 1 inputs). If the carrying value of the digital asset exceeds the fair value based on the lowest price quoted in the active exchanges during the period, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined. Impairment losses are recognized within Other expense in the consolidated statements of operations in the period in which the impairment is identified. The impaired digital assets are written down to their fair value at the time of impairment and this new cost basis will not be adjusted upward for any subsequent increase in fair value. There were no digital assets sales during the year ended December 31, 2021. Warrants Liability We classify warrants to purchase shares of our common stock that are contingently puttable or redeemable as liabilities. Such warrants are me |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Topic 820, Fair Value Measurements , defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Topic 820 also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis and recognized in the accompanying consolidated balance sheets, as well as the general classification of such instruments pursuant to the valuation hierarchy. Cash and Cash Equivalents The Company’s cash and cash equivalents are demand and money market accounts and other highly liquid investments with an original maturity of three months or less. Demand and money market accounts are at stated values. Fair values for other cash equivalents are classified as Level 1 and are based upon appropriate valuation methodology. Marketable Securities — Available-for-sale The Company classifies highly liquid money market funds, U.S. Treasury bonds and certificates of deposit within Level 1 of the fair value hierarchy because they are valued based on quoted market prices in active markets and upon models that take into consideration such market-based factors as recent sales, risk-free yield curves, and prices of similarly rated bonds. Commercial paper, corporate bonds, corporate debt securities, repurchase agreements, and asset backed securities are classified within Level 2 because they are valued using inputs other than quoted prices that are directly or indirectly observable in the market, including readily available pricing sources for the identical underlying security which may not be actively traded. The Company did not hold any securities classified within Level 3 as of December 31, 2021 and December 31, 2020. Assets measured on a recurring basis at fair value, primarily related to marketable securities, included in the consolidated balance sheets as of December 31, 2021 and December 31, 2020 are set forth below (in thousands): Fair Value Measurement at December 31, 2021 Level 1 Level 2 Level 3 Total Cash equivalents Money market accounts $ 113,402 $ — $ — $ 113,402 Total cash equivalents $ 113,402 $ — $ — $ 113,402 Restricted cash equivalents Money market accounts $ 19,569 $ — $ — $ 19,569 Certificates of deposits 3,331 — — 3,331 Total restricted cash equivalents $ 22,900 $ — $ — $ 22,900 Marketable securities - restricted Corporate debt securities $ — $ 2,545 $ — $ 2,545 U.S. treasury and agency securities 33,295 1,986 — 35,281 Commercial paper — 16,081 — 16,081 Asset backed securities — 8,718 — 8,718 Total marketable securities - restricted $ 33,295 $ 29,330 $ — $ 62,625 Fair Value Measurement at December 31, 2020 Level 1 Level 2 Level 3 Total Cash equivalents Money market accounts $ 6,771 $ — $ — $ 6,771 Total cash equivalents $ 6,771 $ — $ — $ 6,771 Restricted cash equivalents Money market accounts $ 6,201 $ — $ — $ 6,201 Certificates of deposits 3,331 — — 3,331 Total restricted cash equivalents $ 9,532 $ — $ — $ 9,532 Marketable securities - restricted Corporate debt securities $ — $ 5,955 $ — $ 5,955 U.S. treasury securities 6,994 — — 6,994 Commercial paper — 8,791 — 8,791 Asset backed securities — 2,911 — 2,911 Total marketable securities - restricted $ 6,994 $ 17,657 $ — $ 24,651 Public and Private Warrants At the Closing, Metromile Operating Company acquired the net liabilities from INSU, including warrants exercisable for common stock. The Company estimated the fair value of warrants exercisable for common stock measured at fair value on a recurring basis at the respective dates using the public trading price, for the Public warrants, and the Black-Scholes option valuation model, for the Private placement warrants (together with the public warrants, the “Warrants”), respectively. The Black-Scholes option valuation model inputs are based on the estimated fair value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, the risk-free interest rates, the expected dividends, and the expected volatility of the price of the Company’s underlying stock. These estimates, especially the expected volatility, are highly judgmental and could differ materially in the future. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. The Company considers its Public warrants to be Level 1 liabilities as it uses publicly and readily available information to measure the fair value of the warrants. For the Company's Private placement warrants, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date and as such are classified as Level 2 liabilities. The table below sets forth a summary of changes in the fair value of the Company’s Level 1, Level 2, and Level 3 liabilities for the year ended December 31, 2020 and the year ended December 31, 2021 (in thousands): Balance at December 31, 2019 $ 1,738 Issuance of warrant on Series E convertible preferred stock 12,620 Increase in fair value of warrant 69,294 Balance at December 31, 2020 $ 83,652 Increase in fair value of warrants 47,062 Exercise of preferred stock warrants prior to Business Combination (130,714) Public and Private placement Warrants acquired in Business Combination 45,623 Decrease in fair value of Public and Private placement Warrants (44,467) Balance at December 31, 2021 $ 1,156 The fair value of the Private placement warrants was determined using the Black-Scholes option valuation model using the following assumptions for values as of December 31, 2021: Estimated Fair Value of Warrants as of December 31, Exercise Dividend Volatility Risk-Free Expected (in thousands) (in whole dollars) (in years) Private placement warrants $ 83 $ 11.50 0 % 75 % 1.13 % 4.1 In connection with the Merger, each of the Metromile Operating Company convertible preferred stock warrants outstanding as of December 31, 2020 was exercised for shares of Metromile Operating Company common stock. Therefore, there were no convertible preferred stock warrants outstanding after the Closing. Through year ended December 31, 2021 and 2020, there were no transfers to or from any Level. The carrying amounts of accounts payable, accrued expenses and notes payable approximate their fair values because of the relatively short periods until they mature or are required to be settled. |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities The Company has investments in certain debt securities that have been classified as available-for-sale and recorded at fair value. These investments are included in both assets for securities with a maturity of one-year or less and assets for securities with a maturity of more than one-year. These securities are held in the Insurance Company and shown as restricted given that the transfer of these assets is subject to the approval of the state regulators. As of December 31, 2021 and December 31, 2020, deposits with various states consisted of bonds, cash and cash equivalents with carrying values of $5.2 million and $4.9 million, respectively. Following the adoption of accounting guidance for credit losses on January 1, 2021, when marketable securities are in an unrealized loss position and the Company does not record an intent-to-sell impairment, the Company will record an allowance for credit losses ("ACL") for the portion of the unrealized loss due to a credit loss. Any remaining unrealized loss on a fixed maturity after recording an ACL is the non-credit amount and is recorded in other comprehensive income (loss) ("OCI"). The ACL is the excess of the amortized cost over the greater of the Company's best estimate of the present value of expected future cash flows or the security's fair value. The ACL cannot exceed the unrealized loss and, therefore, it may fluctuate with changes in the fair value of the fixed maturity if the fair value is greater than the Company's best estimate of the present value of expected future cash flows. The initial ACL and any subsequent changes are recorded in net realized capital gains and losses. The ACL is written off against the amortized cost in the period in which all or a portion of the related fixed maturity is determined to be uncollectible. For further information refer to Note 1, Basis of Presentation and Significant Accounting Policies. Prior to January 1, 2021, when evaluating an investment for other-than-temporary impairment, the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and the Company’s intent to sell, or whether it is more likely than not it will be required to sell the investment before recovery of the investment’s cost basis. Unrealized gains and losses arising from the revaluation of available-for-sale securities are included in the consolidated statements of other comprehensive loss. Realized gains and losses on sales of investments are generally determined using the specific identification method and are included in the consolidated statements of operations. As of December 31, 2021 and December 31, 2020, the Company did not recognize credit losses or other-than-temporarily impairment losses, respectively. The amortized cost and fair value of investments in fixed maturities classified as available-for-sale as of December 31, 2021 and December 31, 2020 are presented below (in thousands): As of December 31, 2021 Amortized ACL¹ Unrealized Unrealized Estimated Marketable securities - restricted Corporate debt securities $ 2,547 $ — $ — $ (2) $ 2,545 U.S. treasury and agency securities 35,385 — — (104) 35,281 Commercial paper 16,081 — — — 16,081 Asset backed securities 8,728 — — (10) 8,718 Total marketable securities - restricted $ 62,741 $ — $ — $ (116) $ 62,625 ¹ Represents the ACL recorded following the adoption of accounting guidance for credit losses on January 1, 2021. For further information refer to Note 1, Basis of Presentation and Significant Accounting Policies. As of December 31, 2020 Amortized Unrealized Unrealized Estimated Marketable securities - restricted Corporate debt securities $ 5,938 $ 17 $ — $ 5,955 U.S. treasury securities 6,994 — — 6,994 Commercial paper 8,791 — — 8,791 Asset backed securities 2,911 — — 2,911 Total marketable securities - restricted $ 24,634 $ 17 $ — $ 24,651 The amortized cost and estimated fair value of marketable securities as of December 31, 2021 and December 31, 2020 and are shown below by contractual maturity (in thousands): As of December 31, Amortized Estimated Due within one year $ 41,603 $ 41,596 Due between one to five years 21,138 21,029 $ 62,741 $ 62,625 As of December 31, Amortized Estimated Due within one year $ 21,603 $ 21,629 Due between one to five years 3,031 3,022 $ 24,634 $ 24,651 The following table summarizes, for all fixed maturities classified as available-for-sale in an unrealized loss position at December 31, 2021, the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in the tables are estimates that are prepared using the process described in Note 2, Fair Value. The Company also relies upon estimates of several factors in its review and evaluation of individual investments, using the process described in Note 1, Basis of Presentation and Significant Accounting Policies in determining whether a credit loss impairment exists. As of December 31, 2021 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Marketable securities - restricted Corporate debt securities $ 737 $ (2) $ — $ — $ 737 $ (2) U.S. treasury and agency securities 31,809 (104) — — 31,809 (104) Commercial paper 1,808 — — — 1,808 — Asset backed securities 8,716 (10) — — 8,716 (10) Total in an unrealized loss position $ 43,070 $ (116) $ — $ — $ 43,070 $ (116) As of December 31, 2020 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Marketable securities - restricted Corporate debt securities $ 2,826 $ — $ — $ — $ 2,826 $ — U.S. treasury and agency securities 1,016 — — — 1,016 — Commercial paper — — — — — — Asset backed securities 593 — — — 593 — Total in an unrealized loss position $ 4,435 $ — $ — $ — $ 4,435 $ — |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2021 | |
Reverse Recapitalization [Abstract] | |
Business Combination | Business Combinations INSU As described in Note 1, Basis of Presentation and Significant Accounting Policies, the Merger with INSU was consummated on February 9, 2021 (the “Closing Date”). For financial accounting and reporting purposes under GAAP, the Business Combination was accounted for as a reverse acquisition and recapitalization, with no goodwill or other intangible asset recorded. As a result, the historical operations of Metromile Operating Company are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Metromile Operating Company prior to the Business Combination; (ii) the combined results of the Company and Metromile Operating Company following the Business Combination; (iii) the assets and liabilities of Metromile Operating Company at their historical cost; and (iv) the Company’s equity structure for all periods presented. In accordance with guidance applicable to these circumstances, the equity structure has been restated in all comparative periods up to the Closing Date, to reflect the number of shares of the Company’s common stock issued to Metromile Operating Company stockholders in connection with the recapitalization transaction. As such, the shares and corresponding capital amounts and earnings per share related to Metromile Operating Company redeemable convertible preferred stock and Metromile Operating Company common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Merger Agreement. Activity within the statement of stockholder’s equity for the issuances and repurchases of Metromile Operating Company redeemable preferred stock, were also retroactively converted to Metromile Operating Company common stock. The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows and the consolidated statement of stockholders’ equity for the year ended December 31, 2021 (dollars in thousands). Recapitalization Cash – INSU’s trust and cash (net of redemptions) $ 229,925 Cash – PIPE 170,000 Less transaction costs and advisory fees paid 31,456 Less cash payments to Metromile Operating Company stockholders 32,000 Net Business Combination and PIPE financing 336,469 Less non-cash net liabilities assumed from INSU 45,516 Net contributions from Business Combination and PIPE Financing $ 290,953 Number of Shares INSU Class A Common stock, outstanding prior to Business Combination 23,540,000 INSU Class B Common stock, outstanding prior to Business Combination 6,669,667 Less redemption of INSU shares 8,372 Common stock of INSU 30,201,295 Shares issued in PIPE 17,000,000 Business Combination and PIPE financing shares 47,201,295 Metromile Operating Company shares (1) 79,525,839 Total shares of common stock immediately after Business Combination 126,727,134 (1) The number of Metromile Operating Company shares was determined from the 78,313,665 shares of Metromile Operating Company common and preferred stock outstanding immediately prior to the closing of the Business Combination, which are presented net of the common and preferred stock redeemed, converted at the Exchange Ratio of 1.01547844. All fractional shares were rounded down. Lemonade As described above in Note 1, Basis of Presentation and Significant Accounting Policies the Company and Lemonade have entered into the Agreement, pursuant to which Lemonade will acquire the Company in an all-stock transaction that implies a fully diluted equity value of approximately $500 million, as of November 5, 2021 which was the last full trading day prior to public announcement of the Proposed Transaction, or an enterprise value of about $340 million net of unrestricted cash and cash equivalents as of September 30, 2021. In accordance with the Agreement, at the First Effective Time, each share of the Company’s common stock issued and outstanding immediately prior to the First Effective Time will be converted into the right to receive 0.05263 (the “Exchange Ratio”) validly issued, fully paid and non-assessable shares of common stock of Lemonade, par value $0.00001 per share (“Lemonade Common Stock”). At the First Effective Time, (i) each Metromile stock option that is held by an individual who, as of November 8, 2021, was not employed or providing services to the Company or its subsidiaries shall be cancelled and converted into the right to receive an amount in cash, without interest, equal to the product of (A) the excess, if any, of the product of (1) the average of the volume weighted average trading prices per share of Lemonade common stock on NYSE on each of the 20 consecutive trading days ending on (and including) the trading day that is three trading days prior to the First Effective Time multiplied by the Exchange Ratio (the “Per Metromile Share Price”), over the (2) the per share exercise price of such Metromile stock option, multiplied by (B) the total number of shares subject to such Metromile stock option; (ii) each other Metromile stock option shall be assumed by Lemonade and automatically converted into a stock option to acquire number of shares of Lemonade common stock (rounded down to the nearest whole share) equal to the product of (A) the number of shares subject to the Metromile stock option and (B) the Exchange Ratio, with an exercise price per share of Lemonade common stock (rounded up to the nearest whole cent) equal to (1) the per share exercise price of the Metromile stock option divided by (2) the Exchange Ratio; (iii) each award of Metromile restricted stock units that (A) is held by any non-employee director of Metromile or (B) vests based on the achievement of one or more performance criteria shall be cancelled and converted automatically into the right to receive an amount in cash equal to the Per Metromile Share Price in respect of each share of common stock underlying such Metromile restricted stock units (in the case of performance-based Metromile restricted stock units, based on actual performance); (iv) each other award of Metromile restricted stock units shall be assumed by Lemonade and automatically converted into an award of Lemonade restricted stock units covering a number of shares of Lemonade common stock equal to (A) the number of shares of Metromile common stock underlying such Metromile restricted stock units multiplied by (B) the Exchange Ratio; and (v) each Metromile warrant exercisable for shares of the Company’s common stock shall be assumed by Lemonade and converted into a corresponding warrant denominated in shares of Lemonade Common Stock (with the number of warrants and exercise price being adjusted based on the Exchange Ratio). Except as otherwise set forth above, each Metromile stock option, restricted stock unit award, and warrant assumed by Lemonade shall continue to have the same terms and conditions as applied immediately prior to the First Effective Time. The consummation of the Proposed Transaction is subject to the satisfaction or waiver of certain closing conditions, some of which have been completed, including among others (i) the effectiveness of the registration statement on Form S-4 registering the shares of Lemonade Common Stock issuable in the Proposed Transaction and absence of any stop order or proceedings by the SEC with respect thereto; (ii) the adoption of the Agreement by holders of a majority of the outstanding shares of the Company’s common stock; (iii) the expiration or early termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iv) receipt of other material regulatory consents and approvals; (v) the approval for listing on the New York Stock Exchange of the shares of Lemonade Common Stock to be issued pursuant to the Agreement; (vi) the absence of governmental restraints or prohibitions preventing the consummation of the Proposed Transaction; (vii) subject to specified materiality standards, the truth and accuracy of the representations and warranties made by each party; (viii) the compliance with or performance by the other party in all material respects of the covenants in the Agreement; and (ix) the absence of a material adverse effect on each party. Upon the consummation of the Proposed Transaction, the Company will cease to be a publicly traded company. The Company has agreed to various customary covenants and agreements, including, among others, agreements to conduct business in the ordinary course during the period between the execution of the agreement and the effective time of the Proposed Transaction. The Company does not believe these restrictions will impact the Company’s ability to meet its ongoing costs of operations, working capital needs, or capital expenditure requirements. As of December 31, 2021, the Company has incurred $3.5 million in transaction costs, in connection with the Proposed Transaction, that are expensed as incurred and included within Other operating expenses of the consolidated statements of operations. |
Website and Software Developmen
Website and Software Development Costs, Net | 12 Months Ended |
Dec. 31, 2021 | |
Research and Development [Abstract] | |
Website and Software Development Costs, Net | Website and Software Development Costs, Net Website and software development costs consist of the following (in thousands): December 31, 2021 2020 Capitalized website and software development costs $ 81,782 $ 64,478 Accumulated amortization (55,916) (46,077) Capitalized website and software development costs, net $ 25,866 $ 18,401 For the years ended December 31, 2021 and 2020 total amortization expense was approximately $11.3 million and $11.2 million respectively. For the years ended December 31, 2021 and 2020 the net amount of capitalized website and software development costs written off was approximately $0 million for both periods. |
Telematics Devices, Improvement
Telematics Devices, Improvements, and Equipment, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Telematics Devices, Improvements, and Equipment, Net | Telematics Devices, Improvements, and Equipment, Net Telematics devices, improvements, and equipment consist of the following (in thousands): December 31, 2021 2020 Telematics devices $ 12,506 $ 14,018 Equipment 2,692 2,677 Leasehold improvements 7,397 7,324 Property and equipment, gross 22,595 24,019 Accumulated depreciation and amortization (8,941) (11,303) Telematics devices, improvements, and equipment, net $ 13,654 $ 12,716 The Company has one major vendor that supplies all telematics devices. The Company expects to maintain this relationship with the vendor for the foreseeable future. As of December 31, 2021 and 2020, the Company had approximately 74,500 and 49,200 telematics devices available to send to policyholders, respectively. |
Deferred Policy Acquisition Cos
Deferred Policy Acquisition Costs, Net | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Deferred Policy Acquisition Costs, Net | Deferred Policy Acquisition Costs, Net Deferred policy acquisition costs, net ("DPAC") consists of the following (in thousands): December 31, December 31, Deferred policy acquisition costs $ 11,533 $ 10,511 Deferred ceding commission [1] (114) (1,202) Accumulated amortization (9,986) (8,653) Deferred policy acquisition costs, net $ 1,433 $ 656 [1] As of June 30, 2021, the Company had commuted all of its reinsurance agreements. Balance from this period onward represents deferred commissions from the Company's relationship with NGI. See Note 1, Basis of Presentation and Significant Accounting Policies for more detail regarding NGI. For the years ended December 31, 2021 and 2020 , total amortization expense was approximately $1.3 million and $1.5 million, respectively. During all periods presented the amortization expense was included as part of sales, marketing and other acquisition costs in the Company’s consolidated statements of operations. |
Digital Assets, Net
Digital Assets, Net | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Digital Assets, Net | Digital Assets, NetIn June 2021, the Company purchased and received $1.0 million of bitcoin. During the year ended December 31, 2021 , the Company recorded $0.2 million of impairment losses on bitcoin. There were no realized gains or losses recognized during the year ended December 31, 2021. As of December 2021, the carrying value of the Company’s bitcoin digital assets held was $0.8 million, which reflects cumulative impairments of $0.2 million. The fair market value of bitcoin held as of December 31, 2021, was $1.3 million. |
Loss and Loss Adjustment Expens
Loss and Loss Adjustment Expense Reserves | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Loss and Loss Adjustment Expense Reserves | Loss and Loss Adjustment Expense Reserves The following table provides a reconciliation of the beginning and ending reserve balances for losses and LAE, net of reinsurance recoverable, as of December 31, 2021, and 2020 (in thousands): For the years ended December 31, 2021 2020 Balance at January 1 $ 57,093 $ 52,222 Less reinsurance recoverable (33,941) (28,837) Net balance at January 1 23,152 23,385 Incurred related to: Current year 88,640 16,140 Prior years (350) 4,793 Total incurred 88,290 20,933 Paid related to: Current year 45,640 6,425 Prior years (7,636) 14,741 Total paid 38,004 21,166 Net balance at end of period 73,438 23,152 Plus reinsurance recoverable — 33,941 Balance at end of period $ 73,438 $ 57,093 These reserve estimates are generally the result of ongoing analysis of recent loss development trends and emerging historical experience. Original estimates are increased or decreased as additional information becomes known regarding individual claims. In setting reserves, the Company reviewed its loss data to estimate expected loss development. Management believes that the use of sound actuarial methodology applied to its analyses of historical experience provides a reasonable estimate of future losses. However, actual future losses may differ from the Company’s estimates, and future events beyond the control of management, such as changes in law, judicial interpretations of law and inflation, may favorably or unfavorably impact the ultimate settlement of the Company’s losses and LAE. The anticipated effect of inflation is implicitly considered when estimating liabilities for losses and LAE. While anticipated price increases due to inflation are considered in estimating the ultimate claim costs, the increase in average severities of claims is caused by a number of factors that vary with the individual type of policy written. Future average severities are projected based on historical trends adjusted for implemented changes in underwriting standards, policy provisions, and general economic trends. The estimation of unpaid losses and LAE reserves is based on existing factors at the date of estimation. Accordingly, future events may result in ultimate losses and LAE significantly varying from a reasonable provision as of the date of estimation. Unfavorable development of claims in future years could result in a significant negative impact on operations, stockholders’ surplus, and risk-based capital. Such development, if not offset by other increases in stockholders’ surplus, could result in the insurance departments of the state of domicile taking regulatory actions against the Company. In 2021, the Company experienced unfavorable development on losses and LAE from prior accident years as a result of adverse loss development on injury coverages which may be influenced by the increased uncertainty in claim emergence from the pandemic. In 2020, the Company experienced unfavorable development on losses and LAE from prior accident years as a result of adverse LAE development. The Company has not had any unfavorable prior year claim experience on retrospectively rated policies. The following is supplementary information about average historical claims duration as of December 31, 2021. Given the stage of the Insurance Company, historical data for claims is limited to five years. Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Automobile 51 % 24 % 11 % 6 % 2 % The following is information about incurred and paid claims development as of December 31, 2021, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported (“IBNR”) liabilities plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2017 to December 31, 2021, including claim frequency, is presented below (dollars in thousands). The Company tracks claim frequency by individual claimant. Automobile As of December 31, 2021 Incurred loss and loss adjustment expenses, net of reinsurance For the Years Ended December 31, IBNR Reserves Cumulative Number of Reported Claims Accident Year 2017* 2018* 2019* 2020* 2021 2017 $ 34,309 $ 36,244 $ 36,326 $ 37,529 $ 38,619 $ 1,090 29,064 2018 37,879 36,501 38,657 38,585 $ 2,529 44,097 2019 — 31,705 32,954 31,097 $ 3,804 51,101 2020 — — 16,140 16,546 $ 6,585 37,239 2021 88,640 $ 23,136 41,483 Total $ 213,487 Automobile Cumulative paid loss and loss adjustment expenses, net of reinsurance For the Years Ended December 31, Accident Year 2017* 2018* 2019* 2020* 2021 2017 $ 21,246 $ 29,988 $ 33,987 $ 36,121 $ 36,898 2018 20,771 30,154 34,465 34,142 2019 17,032 25,235 21,630 2020 6,426 1,773 2021 45,640 Total $ 140,083 All outstanding liabilities before 2017, net of reinsurance $ 34 Liabilities for loss and LAE, net of reinsurance $ 73,438 *Unaudited required supplemental information. The following table reconciles the incurred and paid claims development to the liability for losses and loss adjustment expenses for the year ended December 31, 2021 (in thousands): Total incurred losses and loss adjustment expenses, net of reinsurance $ 216,785 Total paid losses and loss adjustment expenses, net of reinsurance (143,347) Liabilities for loss and LAE, net of reinsurance 73,438 Reinsurance recoverable on losses and LAE — Loss and loss adjustment expense reserves, gross of reinsurance $ 73,438 risk-based capital standards for property and casualty insurers as a means of monitoring the financial strength of insurance companies. The Insurance Company maintained statutory capital and surplus and had statutory net loss as of and for the years ended December 31, 2021 and 2020 as follows (in thousands): December 31, 2021 2020 Statutory capital and surplus $ 32,639 $ 22,453 Statutory net loss $ (825) $ (2,078) The policyholder’s surplus of the Insurance Company as of December 31, 2021 included capital contributions from Metromile of $28.6 million. Dividend payments are restricted by the laws of the State of Delaware. The maximum amount that can be paid without prior notice or approval is the greater of 10% of surplus as regards policyholders as of the preceding December 31 or net income not including realized capital gains for the twelve-month period ending the preceding December 31. Because the Company has an unassigned deficit at December 31, 2021 and 2020, the Company’s dividend policy is governed by Section 5005(B) of the Delaware insurance code whereby a domestic insurer may not declare or pay a dividend or other distribution from any source other than earned surplus without the commissioner’s prior approval. The Insurance Company paid no dividends to the Company in 2021 or 2020. The Insurance Company is subject to certain risk-based capital (“RBC”) requirements as specified by the National Association of Insurance Commissioners (“NAIC”). Under these requirements, the amount of capital and surplus maintained by an insurance company is to be determined based on the various risk factors related to it. As of December 31, 2021 and 2020, the Insurance Company’s capital and policyholders’ surplus exceeded the minimum RBC requirements. |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance During the periods presented, the Company used reinsurance contracts to protect itself from losses due to concentration of risk and to manage its operating leverage ratios. As of December 31, 2021, the Company has commuted all of its reinsurance agreements. Details regarding the commutation settlement agreements include the following: • In February 2021, Metromile Insurance Company entered into a settlement agreement with Horseshoe Re Limited (“Horseshoe”) to commute the reinsurance agreements with effective dates beginning May 1, 2017, May 1, 2018, and May 1, 2019. Pursuant to the agreement, Metromile Insurance Company paid approximately $9.0 million, net, for commutation of the underlying agreements. • In June and July 2021, Metromile Insurance Company entered into settlement agreements with Horseshoe, Partner Reinsurance Company of the U.S. (“Partner”), Topsail Reinsurance SPC Ltd. (“Topsail”), The Cincinnati Insurance Company (“Cincinnati”) and Mapfre Re (“Mapfre”) to commute the reinsurance agreements between the parties with effective dates beginning May 1, 2017, May 1, 2018, May 1, 2019, and May 1, 2020. The commutations were effective April 30, 2021. Pursuant to the settlements, Metromile Insurance Company paid approximately $6.2 million, net, for commutation of the underlying agreements. Prior to the above-mentioned reinsurance agreement commutations, the Company had several quota-share reinsurance agreements in place. For more detail on such agreements see below and refer to Reinsurance in the notes to the audited consolidated financial statements which are included in the Company’s Post-Effective Amendment No. 2 to Form S-1 filed with the SEC on August 27, 2021. ◦ Effective May 1, 2017, two quota-share reinsurance agreements were entered into under which 85% of the Company’s premiums and losses related to its renewal business occurring May 1, 2017 through April 30, 2018 were ceded to two unaffiliated reinsurers. ◦ Effective May 1, 2018, three quota-share reinsurance agreements were in place whereby 85% of the Company’s premiums and losses related to its second term renewal business occurring May 1, 2018 through April 30, 2019, but not covered by the earlier quota-share agreements, were ceded to three unaffiliated reinsurers. ◦ Effective May 1, 2019, four quota-share reinsurance agreements were in place whereby 85% of the Company’s premiums and losses, subject to a loss corridor, related to its new and renewal business occurring May 1, 2019 through April 30, 2020, but not covered by the earlier quota-share agreements, were ceded to four unaffiliated reinsurers. ◦ Effective May 1, 2020, five quota-share reinsurance agreements were in place whereby 85% of the Company’s premiums and losses, subject to a loss corridor for one agreement, related to its new and renewal business occurring May 1, 2020 through April 30, 2021, but not covered by the earlier quota-share agreements, were ceded to five unaffiliated reinsurers. In addition, the Company received revenue from the reinsurers related to the acquisition costs incurred related to the ceded policies. The revenue was based on the number of policies newly ceded to the reinsurers. During the years ended December 31, 2021 and 2020 the Company received $4.7 million and $11.3 million, respectively, for acquisition costs from the reinsurers, pursuant to the existing reinsurance agreements. This revenue is recorded in other revenue on the consolidated statements of operations. The insurance company was not relieved of its primary obligations to policyholders as a result of any reinsurance agreements. The credit risk associated with the Company’s reinsurance contracts was mitigated by using a diverse group of reinsurers and monitoring their financial strength ratings. The former reinsurance counterparties and their A.M. Best financial strength ratings are as follows: Mapfre (A), Cincinnati (A+), Partner (A+), Horseshoe (not rated), and Topsail (not rated). For reinsurance counterparties not rated, adequate levels of collateral were required either in the form of a letter of credit or funded trust account. The effect of the Company’s reinsurance agreements on premiums, loss and LAE related to the insurance company for the years ended December 31, 2021 and December 31, 2020 is as follows (in thousands): December 31, 2021 Premium Premium Unearned Losses and LAE Loss and LAE Direct $ 110,719 $ 111,063 $ 15,726 $ 102,991 $ 73,438 Ceded (19,411) (33,080) — (14,701) — Net $ 91,308 $ 77,983 $ 15,726 $ 88,290 $ 73,438 December 31, 2020 Premium Premium Unearned Losses and LAE Loss and LAE Direct $ 100,611 $ 99,712 $ 16,070 $ 74,943 $ 57,093 Ceded (85,504) (84,740) (13,668) (54,010) (33,941) Net $ 15,107 $ 14,972 $ 2,402 $ 20,933 $ 23,152 |
Notes Payable, net
Notes Payable, net | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable, net | Notes Payable, net The following table summarizes the Company’s debt outstanding, net of issuance costs (in thousands): December 31, December 31, 2019 Loan and Security Agreement $ — $ 25,000 Subordinated Note Purchase and Security Agreement — 32,461 Paycheck Protection Program Loan — 5,880 Principal Amount Due — 63,341 Less: Unamortized debt issuance costs and discounts — (11,407) Notes payable, net $ — $ 51,934 Paycheck Protection Program Loan In April 2020, the Company was granted a loan under the Paycheck Protection Program offered by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), section 7(a)(36) of the Small Business Act for approximately $5.9 million. The loan was evidenced by a promissory note and bore interest at 1% with payments deferred for 10 months after the covered period of 24 weeks. Monthly payments of principal and interest of approximately $0.3 million would have begun in September 2021 and continued through maturity in April 2022, if required. The loan was subject to partial or full forgiveness if the Company: used all proceeds for eligible purposes; maintained certain employment levels; and maintained certain compensation levels in accordance with and subject to the CARES Act and the rules, regulations and guidance. In connection with the Merger with INSU, the loan was repaid in February 2021 and is no longer outstanding. Subordinated Note Purchase and Security Agreement In April 2020, the Company entered into that certain Note Purchase and Security Agreement (as amended, the “Note Purchase Agreement”) with us, as issuer, certain of the Company's subsidiaries, as guarantors, and certain affiliates of Hudson Structured Capital Management (collectively, “Hudson”) with borrowings totaling $31.6 million through December 31, 2020 in the aggregate, along with $0.9 million of capitalized payment in kind (“PIK”) interest. The transaction further provided for additional funds up to $15.0 million over time, from Hudson, the timing of which was subject to reinsurance settlement timing. The outstanding principal under the Note Purchase Agreement was due in April 2025 and bore interest at the following rates: 2% per annum payable quarterly in arrears in cash, and a varying interest rate of 9.0% to 11.0% of PIK interest. The PIK interest was based on the aggregate outstanding principal balance as follows: (i) 11.0% if the outstanding balance was less than $5.0 million; (ii) 10.0% if the outstanding balance was greater than or equal to $5.0 million but less than $10.0 million; and (iii) 9.0% if the outstanding balance was greater than or equal to $10.0 million. PIK interest represents contractually deferred interest that is added to the principal balance outstanding and due at maturity. The loan was secured by substantially all assets of the Company. As of December 31, 2020, the outstanding principal and capitalized PIK interest on the Note Purchase Agreement was $32.5 million, along with $0.6 million of accrued PIK interest not subject to capitalization as of such date. The loan was able to be prepaid in an amount equal to the outstanding principal, accrued cash and PIK interest, and the end of term fee equal to 1% of the principal amount being prepaid. This loan was repaid in March 2021 and is no longer outstanding. As part of the Note Purchase and Security Agreement, the Company issued warrants for up to 8,669,076 of Series E convertible preferred shares, which the Company estimated to have a fair value of $12.5 million at issuance which was recorded as a discount to the debt and was amortized to interest expense over the term of the debt. These warrants were exercised in February 2021 and are no longer outstanding. 2019 Loan and Security Agreement In December 2019, the Company entered into a Loan and Security Agreement (the “2019 Loan and Security Agreement”) with a group of lenders for a term loan in the amount of $25.0 million. Minimum payments of interest were due monthly through December 2021. Beginning in January 2022, equal payments of principal would have been due monthly in an amount necessary to fully amortize the loan by June 5, 2024. An end of term payment of $0.6 million was due at maturity or date of any prepayment. At the time of origination, the lender was granted a warrant to purchase Series E convertible preferred stock, estimated to have a fair value of $0.5 million at issuance. The warrants were exercised in February 2021 and are no longer outstanding. The loan was secured by substantially all assets of the Company. The Company was required to obtain the lender’s consent regarding certain dispositions, and changes in business, management, or ownership including mergers and acquisitions, as more fully described in the 2019 Loan Agreement. The balance outstanding net of debt issuance costs for the 2019 Loan Agreement was $24.3 million as of December 31, 2020. The loan was prepaid in February 2021. The loan was able to be prepaid in an amount equal to the outstanding principal, accrued interest, and the end of term fee, plus a prepayment charge of 3% if paid in the first year after the effective date, 2% if paid in the second year after the effective date, or 1% if prepaid after the second year subsequent to the effective date. |
Leases, Commitments, and Contin
Leases, Commitments, and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Leases, Commitments, and Contingencies | Leases, Commitments, and Contingencies Leases Metromile has non-cancellable and cancellable operating lease agreements for two real estate locations in Tempe, Arizona and its corporate headquarters in San Francisco, California with various expiration dates through 2030. The Company had an additional operating lease agreement for real estate in Boston, Massachusetts, which expired on December 31, 2021, that was present throughout both 2020 and 2021. The right-of-use asset as of December 31, 2021 was $14.2 million and is included in Prepaid expenses and other assets Other liabilities Components of the Company’s operating lease expense are as follows (in thousands): Year Ended Operating lease cost $ 2,785 Short-term lease cost — Variable lease cost 187 Total lease costs included in other operating expenses $ 2,972 The weighted average remaining operating lease term and weighted average discount rate used in the calculation of the Company’s lease assets and lease liabilities were as follows (in thousands): Year Ended Weighted average remaining operating lease term (in years) 7.6 Weighted average discount rate 5.1% Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands): Year Ended Operating cash flows from operating leases $ 3,257 Right-of-use assets obtained in exchange for new lease liabilities $ — Maturities of operating lease liabilities as of December 31, 2021 is as follows (in thousands): As of December 31, Leases 2022 $ 2,181 2023 2,373 2024 2,500 2025 1,849 2026 2,027 Thereafter 7,969 Total lease payments $ 18,899 Less: imputed interest 495 Total lease liability $ 18,404 The following table summarized the future minimum lease payments due under operating leases as of December 31, 2020 and reflect the application of the prior year lease standard (ASC 840, Leases). These amounts were disclosed in the Company’s prior year audited financial statements for the year ended December 31, 2020 (in thousands): Year Ended December 31, Purchase Obligations Leases Total 2021 $ 3,949 $ 3,276 $ 7,225 2022 — 3,093 3,093 2023 — 3,181 3,181 2024 — 3,190 3,190 2025 — 2,433 2,433 Thereafter — 11,186 11,186 Total minimum lease payments $ 3,949 $ 26,359 $ 30,308 The total rental expense recognized in accordance with ASC 840 was $2.9 million in 2020. Litigation Shareholder Matters The Company and/or its current and/or former directors and/or executive officers are named as defendants in a number of lawsuits initiated by putative holders of Metromile, Inc. common stock. On November 8, 2021, the Company entered into an Agreement with Lemonade. Following the announcement of the Lemonade transaction, multiple complaints were filed against the Company and certain current and former officers and directors alleging that the Company’s disclosures concerning the Lemonade transaction were incomplete. The Company believes that these claims lack merit and intends to defend against them vigorously. At this time an estimate of the probable loss or range of loss cannot be made. Since the Agreement announcement, the Company also received demands to inspect its books and records under Delaware General Corporation Law Section 220. The demands seek various documents related to the sale process leading up to the Company’s transaction with Lemonade. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock As of December 31, 2021, the Company had authorized a total of 640,000,000 shares for issuance as common stock. As of December 31, 2021, the Company had 128,221,885 shares of common stock issued and outstanding. Preferred Stock As of December 31, 2021, the Company had authorized a total of 10,000,000 shares for issuance as preferred stock. The Company’s board of directors has the authority to issue preferred stock and to determine the rights, privileges, preferences, restrictions, and voting rights of those shares. As of December 31, 2021, the Company had no shares of preferred stock outstanding. |
Public and Private Warrants
Public and Private Warrants | 12 Months Ended |
Dec. 31, 2021 | |
Public And Private Warrants [Abstract] | |
Public and Private Warrants | Public and Private Warrants As of December 31, 2021, the Company had 7,666,646 public warrants and 180,000 private placement warrants outstanding. Each whole warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment, at any time commencing on September 8, 2021, which was the later of 30 days after the completion of the Business Combination or 12 months from INSU’s IPO closing date. The public warrants will expire on the fifth anniversary of the Business Combination, or earlier upon redemption or liquidation. The Company may call the public warrants for redemption: • in whole or in part; • at a price of $0.01 per warrant; • upon a minimum of 30 days’ prior written notice of redemption; and • if, and only if, the last reported closing price of the ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders. If the Company calls the public warrants for redemption, management will have the option to require all holders that wish to exercise the public warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a share dividend, recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuance of common stock at a price below its exercise price. |
Stock Option Plans
Stock Option Plans | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Option Plans | Stock Option Plans Restricted Stock Units (“RSUs”) During the year ended December 31, 2021 , the Company granted 11,130,711 restricted stock units (“RSUs”) under the 2021 Plan of which 1,301,843 RSUs were fully vested at the time of grant and vesting of 9,828,868 RSU grants is conditional based on continued employment or service for a specified period. Compensation cost related to RSU grants is recognized on a straight-line basis over the vesting period and is calculated using the closing price per share of the Company's common stock on the grant date. For the year ended December 31, 2021, the Company recorded compensation expense of $20.6 million and related to non-performance based RSUs. A summary of the Company’s RSUs as of December 31, 2021 is presented in the table below: Number of RSUs Weighted-Average Fair Balance at December 31, 2020 — $ — Granted 11,130,711 8.67 Vested (2,742,608) 10.39 Forfeited (1,146,123) 7.61 Balance at December 31, 2021 7,241,980 $ 8.19 As of December 31, 2021 , there was $63.9 million of total unrecognized compensation cost related to RSUs. That cost is expected to be recognized over a weighted-average period of 2.79 years. The total grant date fair value of shares vested during the year ended December 31, 2021 was $28.6 million. Performance Based Awards As of December 31, 2020, the Company had issued 150,000 outstanding performance-based awards (“PSUs”) to Dan Preston, Metromile’s Chief Executive Officer (“CEO”). As of the Closing, the performance-based provision was achieved for the outstanding performance-based awards as the Company completed a change in control event, and the Company recognized the expense related to these PSUs on the Closing date as there were no remaining vesting provisions. As a result, the Company recorded $2.5 million in stock-based compensation expense for the year ended December 31, 2021 . In the year ended December 31, 2021 , the Company has issued 2,761,087 PSUs most of which each have a term of five years, subject to continuous services by each holder. One third of PSUs that vest are based on a specific number of policies in force achieved by the Company. One third of the PSUs that vest are based on the Company achieving positive operating cash flow for a period of at least one financial quarter. One third of the PSUs vest based on a market condition of the Company achieving a specific price per share for at least 20 days in a 30-day trading window. Once the performance targets are met, the PSUs that relate to the specific performance target vest immediately. For the year ended December 31, 2021 , the Company had recorded $9.4 million in expense from the PSUs related to the market condition. None of the performance conditions were probable of being satisfied as of December 31, 2021 and, therefore, there is no unrecognized stock compensation related to PSUs. In the year ended December 31, 2021 , the Company granted separate tranches of PSU's subject to a Monte Carlo simulation. The following table provides a range of the assumptions for shares granted in 2021: 2021 Expected volatility 65% - 70% Expected term (years) 0.60 - 1.90 Expected dividend yield n/a Risk-free interest rate .3% - .6% 2011 Stock Plan In 2011, the Company’s Board of Directors adopted the 2011 Equity Incentive Plan (the “2011 Plan”). The 2011 Plan provides for the granting of stock options to officers, directors, employees, and consultants of the Company. Options granted under the 2011 Plan may be Incentive Stock Options (“ISO”) or non-statutory Stock Options (“NSO”) as determined by the Board of Directors at the time of the option grant. The remaining unallocated shares reserved under the 2011 Plan were cancelled and no new awards will be granted under the 2011 Plan. Awards outstanding under the 2011 Plan were assumed by the Company upon the closing and continue to be governed by the terms of the 2011 Plan. 2021 Stock Plan In connection with the Closing, the Company adopted the 2021 Equity Incentive Plan (the “2021 Plan”), under which 38,018,247 shares of common stock were initially reserved for issuance for ISOs. The 2021 Plan allows for the issuance of ISOs, NSOs, restricted stock awards, stock appreciation rights, restricted stock units (“RSUs”), and performance awards. The Board of Directors determines the period over which options become exercisable and options generally vest over a four-year period. The 2021 Plan became effective immediately following the closing. The Company uses the Black-Scholes option pricing model to estimate the fair value of each option grant on the date of grant or modification. The Company amortizes the estimated fair value to stock compensation expense using the straight-line method over the vesting period of the option. The following is a description of the significant assumptions used in the option pricing model: • Expected term — The expected term is the period of time when granted options are expected to be outstanding. In determining the expected term of options, the Company utilized the midpoint between the vesting date and contractual expiration date. • Volatility — Because the Company’s stock has limited trading history, the Company calculates volatility by using the historical stock prices of comparable public companies. • Risk-free interest rate — The Company bases the risk-free interest rate used in the Black-Scholes option valuation model on the rate of treasury securities with the same term as the options. • Forfeiture rate — The weighted average forfeiture rate of unvested options. • Expected dividends — The Company does not have plans to pay cash dividends in the future. Therefore, the Company uses an expected dividend yield of zero in the Black-Scholes option valuation model. The following assumptions were used to estimate the value of options granted during the years ended December 31, 2021 and December 31, 2020: Year ended December 31, Forfeiture rate 26.2 % Volatility 62.00 % Expected term (years) 5.33 Risk-free interest rate 0.53 % Expected dividends — Year ended December 31, Forfeiture rate 19.62% - 25.76% Volatility 47.00% - 62.00% Expected term (years) 4.95 - 7.00 Risk-free interest rate 0.26% - 1.73% Expected dividends — Stock Option Activity The following table summarizes the activity of the Company’s stock option plan: Stock Weighted- Weighted- Aggregate Outstanding as of December 31, 2020 5,931,024 $ 2.61 8.10 $ 70,192 Options granted 4,231 14.45 Options exercised (1,103,263) 2.21 Options cancelled or expired and returned to plan (2,457,488) 2.38 Outstanding as of December 31, 2021 2,374,504 3.00 8.25 $ 375 Vested and exercisable to vest as of December 31, 2021 767,785 2.97 7.91 $ 352 Vested and expected as of December 31, 2021 1,670,909 $ 3.00 8.11 $ 374 The fair value of stock options granted are recognized as compensation expense in the consolidated statements of operations over the related vesting periods. The weighted-average grant date fair value per share of stock options granted during the year ended December 31, 2021 and 2020 was $7.69 and $3.13, respectively. As of December 31, 2021 , there was approximately $1.5 million of unrecognized stock-based compensation cost related to stock options granted under the Plan, respectively, which is expected to be recognized over an average period of 2.12 years. The following table illustrates stock-based compensation expense for employee and non-employee RSUs and options for the year ended December 31, 2021 and 2020 (in thousands). Years Ended December 31, 2021 2020 Cost of revenues $ 883 $ 104 Research and development 3,932 714 Sales and marketing 1,222 44 Other operating expenses 27,865 595 Total stock-based compensation $ 33,902 $ 1,457 |
401(k)
401(k) | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
401(k) | 401(k)The Company has a 401(k) retirement plan that covers all employees who have met certain eligibility requirements. The 401(k) plan provides for voluntary contributions by employees of up to 90% of their eligible compensation, subject to the maximum allowed by law. The Company is not required to make contributions to the plan but can make discretionary contributions. Beginning in the second half of 2021, all full-time Metromile employees have the option to contribute to the 401(k) retirement plan through the standard pre-tax or Roth in which the Company then offers a match of 3.5% funded with MILE (Metromile stock). The Company incurred expenses related to the 401(k) match of $0.8 million during the year ended December 31, 2021, $0.5 million of which was contributed to the plan in 2021 with the remaining amount to be contributed in the first quarter of 2022. The Company did not make any contributions to the plan during the year ended December 31, 2020. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of the Company’s federal income tax expense (benefit) are as follows: December 31, December 31, Current $ — $ — Deferred — (84) Income tax expense (benefit) $ — $ (84) The following table presents a reconciliation of the tax expense (benefit) based on the statutory rate to the Company's actual tax expense (benefit) in the consolidated statements of operations: December 31, December 31, Statutory tax expense $ (45,456) $ (25,241) Warrants – mark to market 545 14,552 Research and development tax credit (1,555) (1,170) Change in valuation allowance 43,604 11,435 Other, net 2,862 340 Income tax expense (benefit) $ — $ (84) The following table summarizes information regarding the Company's deferred tax assets, deferred tax liabilities and valuation allowance (in thousands): December 31, December 31, Deferred tax assets: Net operating loss carryforwards $ 125,037 $ 73,364 Tax credit carryforwards 7,388 4,780 Unearned premium reserves 662 103 Discounting of unpaid losses 631 167 Stock compensation 2,487 501 Other 324 1,048 Total deferred tax assets 136,529 79,963 Deferred tax liabilities: Depreciation & Amortization (6,507) (3,691) Total deferred tax liabilities (6,507) (3,691) Net deferred tax assets before valuation allowance 130,022 76,272 Less valuation allowance (130,022) (76,272) Balance end of year $ — $ — Realization of deferred tax assets is dependent upon future taxable income, if any, the amount and timing of which are uncertain. The company is also in a cumulative loss position. Accordingly, net deferred tax assets have been fully offset by a valuation allowance. As of December 31, 2021, the Company had federal and state net operating loss (“NOL”) carryforwards of approximately $475 million and $463 million, respectively. As of December 31, 2020, the Company had federal and state NOL carryforwards of approximately $279 million and $258 million, respectively. Of the Company’s NOLs, $142 million of federal losses will begin to expire in the years 2031 through 2041 and $334 million of losses can be carried forward indefinitely. State NOL’s have varying expiration periods, beginning from 2027 to 2040. As of December 31, 2021, the Company had federal and state research and development tax credit carryforwards of approximately $5 million and $4 million, respectively. As of December 31, 2020, the Company had federal and state research and development tax credit carryforwards of approximately $4 million and $3 million, respectively. The federal tax credit carryforwards expire at various dates beginning in 2033 if not utilized. The state tax credit carryforwards do not expire. In October 2016, the Company underwent a change of control under Section 382 of the Internal Revenue Code by the purchase of interest by additional investors. Accordingly, a portion of the Company’s deferred tax assets are subject to an annual limitation under Section 382. The deduction limitation is approximately $4 million in 2016, $12 million from 2017 to 2020, $9.5 million in 2021 and $4.2 million each following year. The annual deduction limitations apply to approximately $90.1 million of net operating losses and $4.2 million of research and development credits (grossed up for tax). The Company is not expected to lose any deferred tax assets as a result of these limitations. We may experience ownership changes in the future as a result of subsequent shift in our stock ownership. Uncertain Tax Positions The following is a reconciliation of the beginning and ending amount of the Company’s total gross unrecognized tax benefit liabilities (in thousands): December 31, December 31, Gross unrecognized tax benefit, beginning of the year $ 1,754 $ 1,364 Increases related to tax positions taken during current year 519 390 Gross unrecognized tax benefit, ending balance $ 2,273 $ 1,754 At December 31, 2021, all unrecognized tax benefits, if realized, would create additional deferred tax assets, which would be subject to a full valuation allowance. Accordingly, any recognition would not affect the Company's tax rate. The Company does not anticipate any material reversals of unrecognized tax benefits in the next 12 months. A number of the Company’s tax returns remain subject to examination by taxing authorities for tax years from 2011 to 2017 with respect to the amount of tax attribute carryovers only and 2018 and later under general statutes of limitation. The Company is not currently under examination by income tax authorities in any federal or state jurisdictions. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Segment and Geographic Information The Company operates in the following two reportable segments, which are the same as its operating segments: – Insurance Services. Providing insurance policies for automobile owners – Enterprise Business Solutions. Providing access to its developed technology under SaaS arrangements along with professional services to third party customers. Operating segments are based upon the nature of the Company’s business and how its business is managed. The Company’s Chief Operating Decision Maker (“CODM”) is its CEO. The CODM uses the Company’s operating segment financial information to evaluate segment performance and to allocate resources. The CODM does not evaluate the performance of the Company’s assets on a segment basis for internal management reporting. Contribution is used, in part, to evaluate the performance of, and allocate resources to, each of the segments. Segment contribution is segment revenue less the related costs of revenue and sales and marketing expenses. It excludes certain operating expenses that are not allocated to segments because they are separately managed at the consolidated corporate level. These unallocated costs include stock-based compensation expense, research and development expenses, and general and administrative expenses such as legal and accounting. The total assets of the Insurance services and Enterprise business solutions segments are $305.7 million and $7.7 million, respectively as of December 31, 2021, and $196.1 million and $6.1 million, respectively as of December 31, 2020. The consolidated total assets of Operating segments are $313.4 million and $202.2 million as of December 31, 2021 and December 31, 2020, respectively. The following table summarizes the operating results of the Company’s reportable segments (in thousands): Years Ended 2021 2020 Revenue: Insurance services $ 99,973 $ 29,395 Enterprise business solutions 4,924 5,669 Total revenue $ 104,897 $ 35,064 Contribution: Insurance services $ (5,624) $ 11,914 Enterprise business solutions (3,380) (563) Total contribution $ (9,004) $ 11,351 The following table provides a reconciliation of the Company’s total reportable segments’ contribution to its total loss from operations (in thousands): Years Ended 2021 2020 Total segment contribution $ (9,004) $ 11,351 Ceded premium, losses and LAE (5,082) 15,443 Other income 2,373 2,421 Policy services expenses and other 5,884 2,676 Sales, marketing, and other acquisition costs 102,165 5,029 Research and development 8,565 2,433 Amortization of capitalized software 11,306 11,188 Other operating expenses 63,491 16,981 Loss from operations (197,706) (44,820) Total other expense 18,753 75,361 Loss before taxes $ (216,459) $ (120,181) Geographical Breakdown of Direct Earned Premiums Direct earned premium by state is as follows (in thousands): Years Ended 2021 2020 California $ 64,186 $ 58,276 Washington 13,504 11,391 New Jersey 10,944 9,155 Oregon 7,148 7,232 Illinois 4,404 4,474 Arizona 5,650 4,527 Pennsylvania 2,836 2,932 Virginia 2,391 1,725 Total premiums earned $ 111,063 $ 99,712 During the years ended December 31, 2021 and 2020, the Company recognized $4.3 million and $5.7 million of revenue earned from customers outside the United States, respectively. Revenue generated outside of the United States is related to the Company's Enterprise business solutions segment. Long-lived assets are all held in the U.S. For the year ended December 31, 2020 and 2021, substantially all of the Company’s revenue was earned from customers residing in the United States. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share Net loss per share calculations and potentially dilutive security amounts for all periods prior to the Merger have been retrospectively adjusted to the equivalent number of shares outstanding immediately after the Merger to effect the reverse recapitalization. Historically, reported weighted average shares outstanding have been multiplied by 1.01547844, which is the share exchange ratio established by the Merger Agreement. The following table sets forth the computation of basic and diluted net loss per share attributable to the Company's common stockholders: Years ended December 31, 2021 2020 Numerator: Net loss attributable to common stockholders ($ in thousands) $ (216,459) $ (120,097) Denominator: Weighted average common shares outstanding - basic and diluted 114,609,563 8,890,631 Net loss per share attributable to common stockholders - basic and diluted $ (1.89) $ (13.51) As the Company has reported net loss for each of the periods presented, all potentially dilutive securities are antidilutive. The following potential outstanding shares of Common Stock were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: As of December 31, 2021 2020 Convertible preferred stock — 68,776,614 Outstanding stock options - Stock Plan 2,374,504 5,931,024 Warrants for preferred stock — 9,574,556 Warrants for common stock 7,846,666 — Restricted stock units 11,357,714 — Total anti-dilutive securities 21,578,884 84,282,194 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In August 2014, the Company loaned the CEO $0.4 million with interest at 3.09% and adjusted to 1.5% in April 2020, which was used to early exercise stock options issued to the CEO and was due at the earlier of one year after termination of employment, upon an Initial Public Offering or change in control, or ten years from the date issued. The loan was full recourse, and also collateralized by the underlying shares of common stock. For accounting under GAAP, the note receivable is presented as contra-equity in the accompanying consolidated balance sheets. This loan was paid in full in February 2021 and is no longer outstanding. In March 2018, the Company entered into an agreement with a third party under which the Company developed proprietary software solutions and provides access to and use of such software solutions and related services. In July 2018, the third party became an investor of the Company as part of the Series E convertible preferred stock Financing. During the years ended December 31, 2021 and 2020 , the Company recognized $4.3 million and $5.7 million of revenue from the investor, respectively. The Company had no accounts receivable balances from the investor as of December 31, 2021 and December 31, 2020, respectively. The Company continues to enter into contracts with the investor related to the Company’s Enterprise business solutions (see Note 18, Segment and Geographic Information). An executive of Hudson, who the Company entered into a Note Purchase and Security Agreement with in 2020 (see Note 11, Notes Payable, net), is on the Company’s Board of Directors. This loan was repaid in March 2021 and is no longer outstanding. |
Statutory Financial Information
Statutory Financial Information | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Statutory Financial Information | Loss and Loss Adjustment Expense Reserves The following table provides a reconciliation of the beginning and ending reserve balances for losses and LAE, net of reinsurance recoverable, as of December 31, 2021, and 2020 (in thousands): For the years ended December 31, 2021 2020 Balance at January 1 $ 57,093 $ 52,222 Less reinsurance recoverable (33,941) (28,837) Net balance at January 1 23,152 23,385 Incurred related to: Current year 88,640 16,140 Prior years (350) 4,793 Total incurred 88,290 20,933 Paid related to: Current year 45,640 6,425 Prior years (7,636) 14,741 Total paid 38,004 21,166 Net balance at end of period 73,438 23,152 Plus reinsurance recoverable — 33,941 Balance at end of period $ 73,438 $ 57,093 These reserve estimates are generally the result of ongoing analysis of recent loss development trends and emerging historical experience. Original estimates are increased or decreased as additional information becomes known regarding individual claims. In setting reserves, the Company reviewed its loss data to estimate expected loss development. Management believes that the use of sound actuarial methodology applied to its analyses of historical experience provides a reasonable estimate of future losses. However, actual future losses may differ from the Company’s estimates, and future events beyond the control of management, such as changes in law, judicial interpretations of law and inflation, may favorably or unfavorably impact the ultimate settlement of the Company’s losses and LAE. The anticipated effect of inflation is implicitly considered when estimating liabilities for losses and LAE. While anticipated price increases due to inflation are considered in estimating the ultimate claim costs, the increase in average severities of claims is caused by a number of factors that vary with the individual type of policy written. Future average severities are projected based on historical trends adjusted for implemented changes in underwriting standards, policy provisions, and general economic trends. The estimation of unpaid losses and LAE reserves is based on existing factors at the date of estimation. Accordingly, future events may result in ultimate losses and LAE significantly varying from a reasonable provision as of the date of estimation. Unfavorable development of claims in future years could result in a significant negative impact on operations, stockholders’ surplus, and risk-based capital. Such development, if not offset by other increases in stockholders’ surplus, could result in the insurance departments of the state of domicile taking regulatory actions against the Company. In 2021, the Company experienced unfavorable development on losses and LAE from prior accident years as a result of adverse loss development on injury coverages which may be influenced by the increased uncertainty in claim emergence from the pandemic. In 2020, the Company experienced unfavorable development on losses and LAE from prior accident years as a result of adverse LAE development. The Company has not had any unfavorable prior year claim experience on retrospectively rated policies. The following is supplementary information about average historical claims duration as of December 31, 2021. Given the stage of the Insurance Company, historical data for claims is limited to five years. Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Automobile 51 % 24 % 11 % 6 % 2 % The following is information about incurred and paid claims development as of December 31, 2021, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported (“IBNR”) liabilities plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2017 to December 31, 2021, including claim frequency, is presented below (dollars in thousands). The Company tracks claim frequency by individual claimant. Automobile As of December 31, 2021 Incurred loss and loss adjustment expenses, net of reinsurance For the Years Ended December 31, IBNR Reserves Cumulative Number of Reported Claims Accident Year 2017* 2018* 2019* 2020* 2021 2017 $ 34,309 $ 36,244 $ 36,326 $ 37,529 $ 38,619 $ 1,090 29,064 2018 37,879 36,501 38,657 38,585 $ 2,529 44,097 2019 — 31,705 32,954 31,097 $ 3,804 51,101 2020 — — 16,140 16,546 $ 6,585 37,239 2021 88,640 $ 23,136 41,483 Total $ 213,487 Automobile Cumulative paid loss and loss adjustment expenses, net of reinsurance For the Years Ended December 31, Accident Year 2017* 2018* 2019* 2020* 2021 2017 $ 21,246 $ 29,988 $ 33,987 $ 36,121 $ 36,898 2018 20,771 30,154 34,465 34,142 2019 17,032 25,235 21,630 2020 6,426 1,773 2021 45,640 Total $ 140,083 All outstanding liabilities before 2017, net of reinsurance $ 34 Liabilities for loss and LAE, net of reinsurance $ 73,438 *Unaudited required supplemental information. The following table reconciles the incurred and paid claims development to the liability for losses and loss adjustment expenses for the year ended December 31, 2021 (in thousands): Total incurred losses and loss adjustment expenses, net of reinsurance $ 216,785 Total paid losses and loss adjustment expenses, net of reinsurance (143,347) Liabilities for loss and LAE, net of reinsurance 73,438 Reinsurance recoverable on losses and LAE — Loss and loss adjustment expense reserves, gross of reinsurance $ 73,438 risk-based capital standards for property and casualty insurers as a means of monitoring the financial strength of insurance companies. The Insurance Company maintained statutory capital and surplus and had statutory net loss as of and for the years ended December 31, 2021 and 2020 as follows (in thousands): December 31, 2021 2020 Statutory capital and surplus $ 32,639 $ 22,453 Statutory net loss $ (825) $ (2,078) The policyholder’s surplus of the Insurance Company as of December 31, 2021 included capital contributions from Metromile of $28.6 million. Dividend payments are restricted by the laws of the State of Delaware. The maximum amount that can be paid without prior notice or approval is the greater of 10% of surplus as regards policyholders as of the preceding December 31 or net income not including realized capital gains for the twelve-month period ending the preceding December 31. Because the Company has an unassigned deficit at December 31, 2021 and 2020, the Company’s dividend policy is governed by Section 5005(B) of the Delaware insurance code whereby a domestic insurer may not declare or pay a dividend or other distribution from any source other than earned surplus without the commissioner’s prior approval. The Insurance Company paid no dividends to the Company in 2021 or 2020. The Insurance Company is subject to certain risk-based capital (“RBC”) requirements as specified by the National Association of Insurance Commissioners (“NAIC”). Under these requirements, the amount of capital and surplus maintained by an insurance company is to be determined based on the various risk factors related to it. As of December 31, 2021 and 2020, the Insurance Company’s capital and policyholders’ surplus exceeded the minimum RBC requirements. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event Reinsurance Agreement Effective January 01, 2022, the Company entered into an agreement with Swiss Reinsurance America Corporation. On a prospective basis, under the terms of the transaction, 25% of the Company's gross written premiums, losses, and LAE related to its business is ceded to the reinsurer through June 30, 2023. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. of America (“GAAP”) and in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). References to the Accounting Standard Codification (“ASC”) and Accounting Standard Updates (“ASU”) included hereinafter refer to the Accounting Standards Codification and Updates established by the Financial Accounting Standards Board (“FASB”) as the source of authoritative GAAP. The consolidated financial statements include the accounts of Metromile, Inc. and its subsidiaries, all of which are wholly owned. All intercompany accounts and transactions have been eliminated in consolidation. |
Reclassifications | Reclassifications have been made to the prior year balances to conform to the current year presentation. In particular, accounts receivable has been combined with prepaid expenses and other assets into a single line on the consolidated balance sheets. The reclassifications had no effect on stockholders’ deficit or net loss after taxes as previously reported. |
Use of Estimates | The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. The Company’s principal estimates include unpaid losses and LAE reserves; the fair value of investments; the fair value of share-based awards; the fair value of the warrant liability; premium refunds to policyholders; reinsurance recoverable on unpaid loss; and the valuation allowance for income taxes. Because of uncertainties associated with estimating the amounts, timing and likelihood of possible outcomes, actual results could differ materially from these estimates. |
Revenue Recognition | Insurance Services The Company’s insurance services are accounted for in accordance with Topic 944, Insurance. Policies are written for six-month terms and are considered short-duration contracts for the purposes of accounting under U.S. GAAP. The premium for the policies provides for a base rate per month for the entire policy term, plus a per-mile rate multiplied by the mileage driven each day (based on data from the telematics device subject to a daily maximum). Upon the binding of the policy, the customer pays at least the first month’s base rate and then is billed monthly in arrears for the mileage-based premium portion of the policy plus each subsequent month’s base rate not otherwise prepaid upon binding of the policy. Base premiums are recognized ratably over the policy term and mileage-based premiums are recognized monthly as incurred. All earned premiums are presented net of bad debt expense in the Company’s consolidated statement of operations. Investment Income Investment income is recorded as earned. Investment income consists primarily of interest on the Company’s highly liquid fixed income securities and is recognized on an accrual basis. Other Revenue Other revenue principally consists of enterprise revenue discussed below, reinsurance profit commissions based on performance of the ceded business, commission on NGI policies, and revenue related to policy acquisition costs as part of the reinsurance arrangement as described in Note 10, Reinsurance. The commission on NGI policies is recognized on a net basis and was insignificant in the periods presented. The revenue related to the acquisition costs for policies newly ceded to the reinsurers is recognized as the policies become part of the reinsurance arrangement. No amounts are due back to the reinsurers should a ceded policy cancel after entering the reinsurance arrangement. Enterprise services are accounted for by applying the requirements of Topic 606, Revenue from Contracts with Customers. Topic 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. Topic 606 also includes Subtopic 340-40, Other Assets and Deferred Costs-Contracts with Customers, which requires the deferral of incremental costs of obtaining a contract with a customer. Collectively, references to Topic 606 used herein refer to both Topic 606 and Subtopic 340-40. The Company accounts for revenue contracts with customers by applying the requirements of Topic 606, which includes the following steps: • Identification of the contract, or contracts, with a customer • Identification of the performance obligations in the contract • Determination of the transaction price • Allocation of the transaction price to the performance obligations in the contract • Recognition of revenue when, or as, the Company satisfies a performance obligation The Company has developed technologies intended for internal use to service their insurance business and through its enterprise services offers these products and services to third party customers. The Company also has referral agreements with third party carriers and ad exchange agreements whereby the Company can receive consideration for such services. As such, the Company has three categories of revenue agreements that are included within the scope of Topic 606: 1) subscription and professional services agreements, 2) referral agreements, and 3) ad exchange agreements. For the periods presented, the Company’s revenues from referral and ad exchange agreements have not been significant. The Company’s technology agreements include software subscription-as-a-service (“SaaS”) which provides the customer with the right to access the Company’s core software via a hosted solution. Customers who purchase the SaaS service also receive technical support and access to updates and upgrades. The Company’s performance obligations related to its SaaS offering is a stand-ready obligation to provide the customer with continuous access to the hosted service as well as to provide updates/upgrades and technical support. Access to the platform represents a series of distinct services as the Company continually provides access to, and fulfills its obligation to, the end customer over the subscription term. The series of distinct services represents a single performance obligation that is satisfied over time. The Company recognizes revenue ratably because the customer receives and consumes the benefits of the platform throughout the contract period. During the year ended December 31, 2020, the Company sold a perpetual license for its software. Revenue for this license was recognized up-front upon delivery of the software license. There were no perpetual license sales in 2021. In addition, the Company offers customization and implementation services for customers. Customization services are provided when a customer requests the development of a specific feature and/or functionality that is not currently present within the solution as of the date of execution of the agreement. Implementation services include installation, custom builds, data migration, integration to other application programming interfaces, and training of customer personnel. Both customization and implementation services are priced based on mutual negotiation and subject to Company approvals. Occasionally, these services are offered at a discount or included as a bundle with pricing for the software or SaaS products. These services are not considered to represent distinct performance obligations and when present are combined with the overall subscription service. Revenue recognition begins when all services have been completed and are made available to customers. Deferred Contract Acquisition Costs Prior to the adoption of Topic 606 on January 1, 2019, sales commissions associated with the Company’s technology agreements were not deferred and expensed as incurred. Under Topic 606, the Company recognizes an asset for the incremental costs of obtaining a contract with a customer if the entity expects to recover such costs. Sales commissions are considered incremental and recoverable costs of obtaining a contract with a customer. Contract acquisition costs are accrued and capitalized upon execution of the sales contract by the customer. The Company allocates commission costs to the performance obligations in an arrangement consistent with the allocation of the transaction price. The portion of these costs that are attributed to performance obligations delivered over time are capitalized and recorded in prepaid expense and other current assets on the Company’s consolidated balance sheets. Deferred contract costs on the Company’s consolidated balance sheets were approximately $0.1 million and $0.2 million as of December 31, 2021 and 2020, respectively. Amortization expense related to deferred contract costs through the years ended December 31, 2021 and 2020 was not significant. There was no impairment loss in relation to the costs capitalized for the periods presented. Deferred Revenue The deferred revenue balance consists of subscription and professional services for the Company’s technology agreements which have been invoiced in advance of when the revenue recognition criteria are met. The Company’s subscription contracts are typically invoiced to its customers at the beginning of the term, or in some instances, such as in multi-year arrangements, in annual installments. Accordingly, the Company’s deferred revenue balance does not include revenues for future years of multi-year non-cancellable contracts that have not yet been billed. The Company recognizes subscription revenue ratably over the contract term beginning on the date that services are made available to customers, which may be after the contract commencement date if additional customization or implementation services are required to make the subscription service available to customers. On the contract commencement date, the Company records amounts due in accounts receivable and in deferred revenue. To the extent the Company bills customers in advance of the contract commencement date, the accounts receivable and corresponding deferred revenue amounts are netted to zero on the consolidated balance sheets, unless such amounts have been paid as of the balance sheet date. The Company recognized $2.9 million and $2.3 million of revenue during the years ended December 31, 2021, and 2020, respectively, that was previously included in the deferred revenue. Remaining Performance Obligations |
Losses and Loss Adjustment Expenses and Loss and Loss Adjustment Expenses Reserves | The Insurance Company’s losses and LAE are presented net of any reinsurance and charged to income as incurred. The liabilities for unpaid losses and LAE represent the estimated liabilities for reported claims, claims incurred but not yet reported, and the related LAE. Losses and loss adjustment expenses also includes the LAE related to NGI as well as LAE incurred directly, including claims personnel and related expenses, compensation related to customer experience, depreciation on telematics devices, packaging and postage for shipping devices to customers, fulfillment service center costs, and third-party web-hosting costs. Liability for unpaid losses and LAE for policies underwritten by the Insurance Company represents management’s best estimate of the ultimate net cost of all reported and unreported losses incurred during the years ended December 31, 2021 and prior. The reserves for unpaid losses and LAE are estimated using individual case-basis valuations and statistical analyses. Estimated reserves are computed in accordance with accepted actuarial standards and principles. Several different actuarial approaches are considered, and reserve estimates may rely on a single or multiple techniques, depending on the appropriateness of the technique in a given situation. One branch of techniques that is frequently relied upon belongs to chain ladder methods in which data is aggregated into appropriate accident periods (when a claim occurred) and historical loss patterns are applied to actual paid losses and reported losses (paid losses plus individual case reserves as established by claim adjusters). The chain ladder method uses a ratio of losses from consecutive periods to calculate a development factor amongst various accident periods at similar maturities. An age-to-age factor is the expected development for future accident periods at a similar maturity. This is judgmentally selected based on a variety of inputs including, but not limited to, industry trends, company-specific trends, changes in claims handling practices, and changes in judicial environment and other external influences. Age-to-age factors are then multiplied and applied to the known losses to estimate the ultimate loss. The primary assumption of this approach is that historical development patterns are predictive of how current and future accident periods will develop. Modifications and variations of this approach can be made to better address certain issues that may arise, such as a sudden change in claim reserving process from claim adjusters, changes in payment and closure rate of claims, and external factors. Large losses, severe weather events, and other catastrophic events may significantly increase the variance of development patterns. These may be capped or excluded in the data and analyzed separately. The use of these methods on paid data as opposed to reported data has both benefits and drawbacks. For a sufficiently large dataset, paid data tends to be more stable, but may finalize later, creating additional uncertainty and potential to both over- and under-estimate reserves. For newer, immature accident periods, approaches using paid data may create very volatile estimates as a relatively small amount has been paid, which is then multiplied by a large multiplier from the age-to-age factors as described above. Reported data includes payments made to date as well as the best estimate from claim adjusters of future payments. The claim adjusters are able to review each claim and incorporate facts about each individual event to estimate losses on a claim-by-claim basis. Reported data tends to require less future development than paid data, which decreases the potential variance from the ultimate amount to be paid for a claim. It may however be influenced by changes in claims reserving and settlement practices, which need to be accounted for when using historical data to predict future liabilities. |
Reinsurance | The Company enters into ceded reinsurance contracts to protect its business from losses due to concentration of risk and to manage its operating leverage ratios. The Company has entered into quota-share reinsurance agreements with reinsurers under which risks are covered on a pro-rata basis for all policies underwritten by the Insurance Company. Premiums ceded to reinsurers are reported as a reduction of premiums written, and expenses incurred in connection with ceded policies have been accounted for as a reduction of the Company’s related deferred policy acquisition costs. The Company is exposed to credit risk from reinsurance recoverables and prepaid reinsurance premiums, which is mitigated by using a trust account. |
Cash, Cash Equivalents and Restricted Cash | For purposes of the consolidated financial statements, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. The Company’s operating cash is held in an overnight sweep account. The Company’s cash is maintained in checking accounts, money market funds, and other highly liquid fixed income investments. Certain of the Company’s cash accounts are restricted. The Company holds certificates of deposits as collateral on its letters of credit in conjunction with its office leases and corporate credit cards. As part of the Company’s debt arrangement, a certain cash minimum must be maintained in a separate bank account as part of the debt covenants. The Company also collects insurance policy premiums that it holds in a segregated account for transmittal to the applicable underwriting carrier or for the benefit of policyholders for insurance-related claims. Cash held by the Insurance Company is restricted for use by the Insurance Company for the benefit of its policyholders. |
Concentrations of Credit Risk | Financial instruments that potentially subject the Company to concentrations of credit risk, to the extent of the amounts recorded on the consolidated balance sheets, consist principally of cash and marketable securities. The Company, at times, maintains cash balances with its primary bank in excess of Federal Deposit Insurance Corporation limits. The Company places its cash and cash equivalents with financial institutions with high credit standing. The Company places its excess cash in marketable investment grade securities. There are no significant concentrations in any one issuer of debt securities. The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of the policy coverage, and therefore the Company will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance insolvencies, the Company evaluates the financial condition of its reinsurers and monitors concentrations of credit risk. |
Marketable Securities | The Company classifies marketable investment securities as available-for-sale. Interest income and dividends on securities are recognized in income on an accrual basis. Premiums and discounts on debt securities are amortized as an adjustment to interest income using the interest method. These securities are reported at their estimated fair value with unrealized gains and losses reported as a separate component of comprehensive income in stockholders’ deficit and classified into unrestricted and restricted marketable securities. Purchases and sales of investments are recorded on a trade date basis. Realized gains and losses are determined based on the specific identification method. Certain marketable securities are restricted as they are held by the Insurance Company and are either pledged as statutory deposits for state licenses or restricted as to the distribution of the assets of the Insurance Company under the regulations of the State of Delaware. |
Telematics Devices, Improvements, and Equipment, Net | Telematics devices, improvements, and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is generally estimated to be three |
Website and Software Development Costs, Net | Costs related to the planning and post-implementation phases of the Company’s website and software development efforts are recorded as an operating expense. Direct costs incurred in the development phase of major development efforts and upgrades are capitalized and amortized using the straight-line method over an estimated useful life, generally estimated to be three years. |
Deferred Policy Acquisition Costs ("DPAC") | The Company defers sales commissions and expenses, marketing and underwriting costs, net of reinsurance ceding commission, directly relating to the successful acquisition of policies that the GA Subsidiary binds, and costs related to written premiums to the extent they are considered recoverable. These costs are then expensed over the customer’s policy term including estimated renewal periods. The method followed to determine the deferred policy acquisition costs limits the deferral to its realizable value by considering estimated future claims and expenses to be incurred as premiums are earned. Changes in estimates, if any, are recorded in the accounting period in which changes are determined. When anticipated losses, LAE, commissions, and other policy acquisition costs exceed recorded unearned premium, any future premiums on existing policies, and anticipated investment income on existing policies, a premium deficiency reserve is recognized by recording a reduction to DPAC with a corresponding charge to operations. The Company does not include anticipated investment income as a factor in the premium deficiency calculations. The Company concluded that no premium deficiency adjustments were necessary through December 31, 2021 and 2020. |
Impairment of Long-Lived Assets | The Company evaluates the carrying amount of its long-lived assets, primarily telematics devices, improvements, equipment, website and software development costs, and policy acquisition costs for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company assesses recoverability using undiscounted cash flows attributed to that asset. If impairment has occurred, any excess of the carrying value over the fair value is recorded as a loss. No impairment occurred during the years presented. Indefinite-lived intangible assets, such as the Company’s insurance licenses included as intangible assets on the accompanying consolidated balance sheets, are subject to annual impairment testing. On an annual basis or more frequently if a triggering event occurs, the fair value of indefinite-lived intangible assets are evaluated to determine if an impairment charge is required. |
Digital Assets, Net | During the year ended December 31, 2021, the Company purchased an aggregate of $1.0 million in digital assets, comprised solely of bitcoin. The Company currently accounts for these digital assets as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other. The Company has ownership of and control over the purchased bitcoin asset and uses third-party custodial services to secure it. The digital assets are initially recorded at cost and are subsequently remeasured on the consolidated balance sheets at cost, net of any impairment losses incurred since acquisition. An impairment analysis is performed at each reporting period to identify whether events or changes in circumstances, in particular decreases in the quoted prices on active exchanges, indicate that it is more likely than not that digital assets held by the Company are impaired. The fair value of digital assets is determined on a nonrecurring basis in accordance with ASC 820, Fair Value Measurement, based on quoted prices on the active exchange(s) that the Company has determined is its principal market for bitcoin (Level 1 inputs). If the carrying value of the digital asset exceeds the fair value based on the lowest price quoted in the active exchanges during the period, an impairment loss has occurred with respect to those digital assets in the amount equal to the difference between their carrying values and the price determined. |
Warrants Liability | We classify warrants to purchase shares of our common stock that are contingently puttable or redeemable as liabilities. Such warrants are measured and recognized at fair value and are subject to remeasurement at each balance sheet date. The fair value of our private warrant liabilities is measured using a Black-Scholes ("BSM") option-pricing model whereas the fair value of our public warrants are measured using level 1 inputs. Under the BSM option-pricing model, the fair value is measured using the following assumptions and inputs: exercise price, fair value of the underlying preferred stock, expected term, expected volatility, and risk-free interest rate. We classify the warrants as a liability on our consolidated balance sheets as of December 31, 2021 and December 31, 2020. The warrant liabilities are measured at fair value at inception and on a recurring basis, with changes in fair value presented within change in fair value of warrant liabilities in the consolidated statement of operations. Prior to Merger, we had warrants exercisable for convertible preferred stock which were exercised at the time of the Merger and no longer considered outstanding. These warrants were measured using the BSM option pricing-model. |
Stock-Based Compensation | Stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period of the respective award. The expense recorded is based on awards ultimately expected to vest and, therefore, is reduced by estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company calculates the fair value of options using the Black-Scholes option pricing model and recognizes expense using the straight-line attribution approach. As of December 31, 2021, the Company has granted stock options and RSUs with service conditions as well as RSUs with performance conditions and market conditions. Awards with performance conditions and no service conditions are expensed when the performance condition is deemed probable of being achieved and is based on the fair value of the award at that time. Unlike a service or performance condition, a market condition is not a vesting condition but is directly factored into the fair-value-based measure of an award. Compensation cost thus is recognized for an award with a market condition provided that the good is delivered or the service is rendered, regardless of when, if ever, the market condition is satisfied. |
Advertising Expenses | The Company expenses advertising costs as incurred. |
Income Taxes | The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes accrued interest and penalties, if any, related to unrecognized tax benefits as income tax expense. |
Net Loss per Share | Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all series of its redeemable convertible preferred stock to be participating securities. Under the two-class method, the net loss attributable to common stockholders is not allocated to the redeemable convertible preferred stock as the holders of its redeemable convertible preferred stock do not have a contractual obligation to share in the Company’s losses. Under the two-class method, net income is attributed to common stockholders and participating securities based on their participation rights. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options and redeemable convertible preferred stock. As the Company has reported losses for the years presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. As of December 31, 2021, the Company no longer had convertible preferred stock. During this period, basic earnings per share was computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share reflected the effect of potentially dilutive securities. As the Company has reported losses for the years presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. |
Leases | The Company leases real estate facilities under non-cancellable and cancellable operating leases with various expiration dates through fiscal year 2030. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present, the existence of an identified asset(s), if any, and the Company’s control over the use of the identified asset(s), if applicable. The Company adopted ASU 2016-02, Leases (Topic 842) on January 1, 2021. The Company elected the package of practical expedients for transition under which the Company did not reassess its prior conclusions about lease identification, lease classification and initial direct costs. Additionally, the Company elected the hindsight and land easement practical expedients for transition under which conclusions around lease term, impairment and land easements will not be reassessed. The Company did not apply the portfolio approach to its lease agreements. Operating leases are included in prepaid expenses and other assets and in other liabilities in the accompanying consolidated balance sheets. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease assets and lease liabilities are recognized at the lease inception date based on the present value of lease payments over the lease term, discounted based on the more readily determinable of (i) the rate implicit in the lease or (ii) the Company’s incremental borrowing rate (which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease). Because the Company’s operating leases generally do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at lease commencement date utilizing peer company data for borrowings with a similar term. The Company’s operating lease assets are measured based on the corresponding operating lease liability adjusted for (i) payments made to the lessor at or before the commencement date, (ii) initial direct costs incurred and (iii) tenant incentives under the lease. The Company does not assume renewals or early terminations unless it is reasonably certain to exercise these options at commencement. The Company elected the practical expedient which allows the Company to not allocate consideration between lease and non-lease components. Variable lease payments are recognized in the period in which the obligation for those payments is incurred. In addition, the Company elected the practical expedient such that it does not recognize lease assets or lease liabilities for leases with a term of 12 months or less of all asset classes. Operating lease expense is recognized on a straight-line basis over the lease term. The Company’s lease agreements generally do not contain any residual guarantees or restrictive covenants. |
Accounting Pronouncements | The Company adopted the following accounting standards during the year ended December 31, 2021: Financial Instruments - Credit Losses In June 2016, FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), intended to improve the timing, and enhance the accounting and disclosure, of credit losses on financial assets. The updated guidance applies a new credit loss model (current expected credit losses or "CECL") for determining credit-related impairments for financial instruments measured at amortized cost (including reinsurance recoverables, and premiums receivables) and requires an entity to estimate the credit losses expected over the life of an exposure or pool of exposures. The estimate of expected credit losses should consider historical information, current information, as well as reasonable and supportable forecasts, including estimates of prepayments. The expected credit losses, and subsequent adjustments to such losses, are recorded through an allowance account that is deducted from the amortized cost basis of the financial asset, with the net carrying value of the financial asset presented on the consolidated balance sheets at the amount expected to be collected. The updated guidance also amends the previous other-than-temporary impairment model for available-for-sale debt securities by requiring the recognition of impairments relating to credit losses through an allowance account and limits the amount of credit loss to the difference between a security’s amortized cost basis and its fair value. Effective on January 1, 2021, the Company adopted this standard using the modified retrospective transition method. For available-for-sale debt securities, the updated guidance was applied prospectively. For financial instruments measured at amortized cost, the adoption had no impact on the accumulated deficit on the consolidated balance sheets as of January 1, 2021. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU 2016-02”), as subsequently amended which requires an entity to recognize assets and liabilities arising from a lease for both financing (formerly referred to as capital) and operating leases. ASU 2016-02 also requires new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 was effective for the Company in its annual reporting period beginning after December 15, 2021, with early adoption permitted. The Company adopted this ASU as of January 1, 2021 using the modified retrospective approach. In addition, the standard allows for certain practical expedients in transition to ASC 842, including the package of practical expedients. The Company elected to utilize the package of practical expedients which allowed the Company to not reassess the following: (i) whether any expired or existing contracts contained leases; (ii) the lease classification for any expired or existing leases; and (iii) the treatment of initial direct costs for any existing leases. ASU 2018-01, Land Easement Practical Expedient for Transition to Topic 840 (“ASU 2018-01”) is effective for the Company upon adopting ASC 842. The Company adopted this ASU as of January 1, 2021 and will not reassess whether any land easements not previously accounted for as leases under Topic 840 meet the definition of a lease. The adoption of this standard resulted in the recognition of operating lease liabilities and right-of-use assets of $21.2 million and $15.9 million for its various leases with maturity dates through 2030. The Company will depreciate the right of use ("ROU") assets over the respective lease terms accordingly. The difference between the ROU assets and lease liabilities is the unamortized balance of deferred rent, which prior to January 1, 2021, was included as a separate liability within other liabilities. The operating lease expenses are included in other operating expenses in the Company’s consolidated statements of operations. The adoption did not impact beginning accumulated deficit, or prior year consolidated statements of operations and comprehensive loss and statement of cash flows as the Company elected the practical expedient that allows comparative financial statements under ASC 840. The Company included the disclosures required by ASU 2016-02 in the Leases, Commitments and Contingencies footnote. Income Taxes ASU 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, simplifies the various aspects related to accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifies and amends the existing guidance to improve consistent application. The adoption of ASU 2019-12 beginning January 1, 2021 did not have a material impact on the Company's consolidated financial statements and related disclosures. Reference Rate Reform In March 2020, FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions to contract modifications and hedging relationships that reference LIBOR or another reference rate expected to be discontinued. The standard is effective upon issuance through December 31, 2022 and may be applied at the beginning of the interim period that includes March 12, 2020 or any date thereafter. The Company is currently evaluating this new standard and the impact it will have on its consolidated financial statements. This standard may be elected and applied prospectively over time from March, 2020 through December 31, 2022 as reference rate reform activities occur. The Company is evaluating the method of adoption and impact of the standard on its consolidated financial statements and related disclosures. Government Assistance In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance. This update requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy. This standard is effective for annual periods beginning after December 15, 2021. Early adoption is permitted. The amendments should be applied either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. The Company is currently evaluating the impact of these amendments on its consolidated financial statements. |
Fair Value Measurement | Cash and Cash Equivalents The Company’s cash and cash equivalents are demand and money market accounts and other highly liquid investments with an original maturity of three months or less. Demand and money market accounts are at stated values. Fair values for other cash equivalents are classified as Level 1 and are based upon appropriate valuation methodology. Marketable Securities — Available-for-sale Public and Private Warrants At the Closing, Metromile Operating Company acquired the net liabilities from INSU, including warrants exercisable for common stock. The Company estimated the fair value of warrants exercisable for common stock measured at fair value on a recurring basis at the respective dates using the public trading price, for the Public warrants, and the Black-Scholes option valuation model, for the Private placement warrants (together with the public warrants, the “Warrants”), respectively. The Black-Scholes option valuation model inputs are based on the estimated fair value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrant, the risk-free interest rates, the expected dividends, and the expected volatility of the price of the Company’s underlying stock. These estimates, especially the expected volatility, are highly judgmental and could differ materially in the future. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. The Company considers its Public warrants to be Level 1 liabilities as it uses publicly and readily available information to measure the fair value of the warrants. For the Company's Private placement warrants, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date and as such are classified as Level 2 liabilities. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured on a recurring basis at fair value | Assets measured on a recurring basis at fair value, primarily related to marketable securities, included in the consolidated balance sheets as of December 31, 2021 and December 31, 2020 are set forth below (in thousands): Fair Value Measurement at December 31, 2021 Level 1 Level 2 Level 3 Total Cash equivalents Money market accounts $ 113,402 $ — $ — $ 113,402 Total cash equivalents $ 113,402 $ — $ — $ 113,402 Restricted cash equivalents Money market accounts $ 19,569 $ — $ — $ 19,569 Certificates of deposits 3,331 — — 3,331 Total restricted cash equivalents $ 22,900 $ — $ — $ 22,900 Marketable securities - restricted Corporate debt securities $ — $ 2,545 $ — $ 2,545 U.S. treasury and agency securities 33,295 1,986 — 35,281 Commercial paper — 16,081 — 16,081 Asset backed securities — 8,718 — 8,718 Total marketable securities - restricted $ 33,295 $ 29,330 $ — $ 62,625 Fair Value Measurement at December 31, 2020 Level 1 Level 2 Level 3 Total Cash equivalents Money market accounts $ 6,771 $ — $ — $ 6,771 Total cash equivalents $ 6,771 $ — $ — $ 6,771 Restricted cash equivalents Money market accounts $ 6,201 $ — $ — $ 6,201 Certificates of deposits 3,331 — — 3,331 Total restricted cash equivalents $ 9,532 $ — $ — $ 9,532 Marketable securities - restricted Corporate debt securities $ — $ 5,955 $ — $ 5,955 U.S. treasury securities 6,994 — — 6,994 Commercial paper — 8,791 — 8,791 Asset backed securities — 2,911 — 2,911 Total marketable securities - restricted $ 6,994 $ 17,657 $ — $ 24,651 |
Fair value of warrants | The table below sets forth a summary of changes in the fair value of the Company’s Level 1, Level 2, and Level 3 liabilities for the year ended December 31, 2020 and the year ended December 31, 2021 (in thousands): Balance at December 31, 2019 $ 1,738 Issuance of warrant on Series E convertible preferred stock 12,620 Increase in fair value of warrant 69,294 Balance at December 31, 2020 $ 83,652 Increase in fair value of warrants 47,062 Exercise of preferred stock warrants prior to Business Combination (130,714) Public and Private placement Warrants acquired in Business Combination 45,623 Decrease in fair value of Public and Private placement Warrants (44,467) Balance at December 31, 2021 $ 1,156 |
Schedule of net deferred tax assets or liabilities | The fair value of the Private placement warrants was determined using the Black-Scholes option valuation model using the following assumptions for values as of December 31, 2021: Estimated Fair Value of Warrants as of December 31, Exercise Dividend Volatility Risk-Free Expected (in thousands) (in whole dollars) (in years) Private placement warrants $ 83 $ 11.50 0 % 75 % 1.13 % 4.1 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of available-for-sale securities | The amortized cost and fair value of investments in fixed maturities classified as available-for-sale as of December 31, 2021 and December 31, 2020 are presented below (in thousands): As of December 31, 2021 Amortized ACL¹ Unrealized Unrealized Estimated Marketable securities - restricted Corporate debt securities $ 2,547 $ — $ — $ (2) $ 2,545 U.S. treasury and agency securities 35,385 — — (104) 35,281 Commercial paper 16,081 — — — 16,081 Asset backed securities 8,728 — — (10) 8,718 Total marketable securities - restricted $ 62,741 $ — $ — $ (116) $ 62,625 ¹ Represents the ACL recorded following the adoption of accounting guidance for credit losses on January 1, 2021. For further information refer to Note 1, Basis of Presentation and Significant Accounting Policies. As of December 31, 2020 Amortized Unrealized Unrealized Estimated Marketable securities - restricted Corporate debt securities $ 5,938 $ 17 $ — $ 5,955 U.S. treasury securities 6,994 — — 6,994 Commercial paper 8,791 — — 8,791 Asset backed securities 2,911 — — 2,911 Total marketable securities - restricted $ 24,634 $ 17 $ — $ 24,651 |
Schedule of amortized cost and estimated fair value of marketable securities | The amortized cost and estimated fair value of marketable securities as of December 31, 2021 and December 31, 2020 and are shown below by contractual maturity (in thousands): As of December 31, Amortized Estimated Due within one year $ 41,603 $ 41,596 Due between one to five years 21,138 21,029 $ 62,741 $ 62,625 As of December 31, Amortized Estimated Due within one year $ 21,603 $ 21,629 Due between one to five years 3,031 3,022 $ 24,634 $ 24,651 |
Schedule of unrealized loss on investments | The following table summarizes, for all fixed maturities classified as available-for-sale in an unrealized loss position at December 31, 2021, the aggregate fair value and gross unrealized loss by length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in the tables are estimates that are prepared using the process described in Note 2, Fair Value. The Company also relies upon estimates of several factors in its review and evaluation of individual investments, using the process described in Note 1, Basis of Presentation and Significant Accounting Policies in determining whether a credit loss impairment exists. As of December 31, 2021 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Marketable securities - restricted Corporate debt securities $ 737 $ (2) $ — $ — $ 737 $ (2) U.S. treasury and agency securities 31,809 (104) — — 31,809 (104) Commercial paper 1,808 — — — 1,808 — Asset backed securities 8,716 (10) — — 8,716 (10) Total in an unrealized loss position $ 43,070 $ (116) $ — $ — $ 43,070 $ (116) As of December 31, 2020 Less Than 12 Months 12 Months or Longer Total Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Marketable securities - restricted Corporate debt securities $ 2,826 $ — $ — $ — $ 2,826 $ — U.S. treasury and agency securities 1,016 — — — 1,016 — Commercial paper — — — — — — Asset backed securities 593 — — — 593 — Total in an unrealized loss position $ 4,435 $ — $ — $ — $ 4,435 $ — |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Reverse Recapitalization [Abstract] | |
Schedule of business combination proceeds | The following table reconciles the elements of the Business Combination to the consolidated statement of cash flows and the consolidated statement of stockholders’ equity for the year ended December 31, 2021 (dollars in thousands). Recapitalization Cash – INSU’s trust and cash (net of redemptions) $ 229,925 Cash – PIPE 170,000 Less transaction costs and advisory fees paid 31,456 Less cash payments to Metromile Operating Company stockholders 32,000 Net Business Combination and PIPE financing 336,469 Less non-cash net liabilities assumed from INSU 45,516 Net contributions from Business Combination and PIPE Financing $ 290,953 |
Schedule of equity changes due to business combination | Number of Shares INSU Class A Common stock, outstanding prior to Business Combination 23,540,000 INSU Class B Common stock, outstanding prior to Business Combination 6,669,667 Less redemption of INSU shares 8,372 Common stock of INSU 30,201,295 Shares issued in PIPE 17,000,000 Business Combination and PIPE financing shares 47,201,295 Metromile Operating Company shares (1) 79,525,839 Total shares of common stock immediately after Business Combination 126,727,134 (1) The number of Metromile Operating Company shares was determined from the 78,313,665 shares of Metromile Operating Company common and preferred stock outstanding immediately prior to the closing of the Business Combination, which are presented net of the common and preferred stock redeemed, converted at the Exchange Ratio of 1.01547844. All fractional shares were rounded down. |
Website and Software Developm_2
Website and Software Development Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Research and Development [Abstract] | |
Schedule of Website and Software Development Costs | Website and software development costs consist of the following (in thousands): December 31, 2021 2020 Capitalized website and software development costs $ 81,782 $ 64,478 Accumulated amortization (55,916) (46,077) Capitalized website and software development costs, net $ 25,866 $ 18,401 |
Telematics Devices, Improveme_2
Telematics Devices, Improvements, and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of telematics devices, improvements, and equipment, net | Telematics devices, improvements, and equipment consist of the following (in thousands): December 31, 2021 2020 Telematics devices $ 12,506 $ 14,018 Equipment 2,692 2,677 Leasehold improvements 7,397 7,324 Property and equipment, gross 22,595 24,019 Accumulated depreciation and amortization (8,941) (11,303) Telematics devices, improvements, and equipment, net $ 13,654 $ 12,716 |
Deferred Policy Acquisition C_2
Deferred Policy Acquisition Costs, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | |
Schedule of deferred policy acquisition costs | Deferred policy acquisition costs, net ("DPAC") consists of the following (in thousands): December 31, December 31, Deferred policy acquisition costs $ 11,533 $ 10,511 Deferred ceding commission [1] (114) (1,202) Accumulated amortization (9,986) (8,653) Deferred policy acquisition costs, net $ 1,433 $ 656 [1] As of June 30, 2021, the Company had commuted all of its reinsurance agreements. Balance from this period onward represents deferred commissions from the Company's relationship with NGI. See Note 1, Basis of Presentation and Significant Accounting Policies for more detail regarding NGI. |
Loss and Loss Adjustment Expe_2
Loss and Loss Adjustment Expense Reserves (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Schedule of beginning and ending reserve balances for losses and LAE, net of reinsurance recoverable | The following table provides a reconciliation of the beginning and ending reserve balances for losses and LAE, net of reinsurance recoverable, as of December 31, 2021, and 2020 (in thousands): For the years ended December 31, 2021 2020 Balance at January 1 $ 57,093 $ 52,222 Less reinsurance recoverable (33,941) (28,837) Net balance at January 1 23,152 23,385 Incurred related to: Current year 88,640 16,140 Prior years (350) 4,793 Total incurred 88,290 20,933 Paid related to: Current year 45,640 6,425 Prior years (7,636) 14,741 Total paid 38,004 21,166 Net balance at end of period 73,438 23,152 Plus reinsurance recoverable — 33,941 Balance at end of period $ 73,438 $ 57,093 The following table reconciles the incurred and paid claims development to the liability for losses and loss adjustment expenses for the year ended December 31, 2021 (in thousands): Total incurred losses and loss adjustment expenses, net of reinsurance $ 216,785 Total paid losses and loss adjustment expenses, net of reinsurance (143,347) Liabilities for loss and LAE, net of reinsurance 73,438 Reinsurance recoverable on losses and LAE — Loss and loss adjustment expense reserves, gross of reinsurance $ 73,438 |
Average annual percentage payout of incurred claims by age, net of reinsurance | The following is supplementary information about average historical claims duration as of December 31, 2021. Given the stage of the Insurance Company, historical data for claims is limited to five years. Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance Years 1 2 3 4 5 6 7 8 9 10 Automobile 51 % 24 % 11 % 6 % 2 % |
Short-duration insurance contracts | The following is information about incurred and paid claims development as of December 31, 2021, net of reinsurance, as well as cumulative claim frequency and the total of incurred-but-not-reported (“IBNR”) liabilities plus expected development on reported claims included within the net incurred claims amounts. The information about incurred and paid claims development for the years ended December 31, 2017 to December 31, 2021, including claim frequency, is presented below (dollars in thousands). The Company tracks claim frequency by individual claimant. Automobile As of December 31, 2021 Incurred loss and loss adjustment expenses, net of reinsurance For the Years Ended December 31, IBNR Reserves Cumulative Number of Reported Claims Accident Year 2017* 2018* 2019* 2020* 2021 2017 $ 34,309 $ 36,244 $ 36,326 $ 37,529 $ 38,619 $ 1,090 29,064 2018 37,879 36,501 38,657 38,585 $ 2,529 44,097 2019 — 31,705 32,954 31,097 $ 3,804 51,101 2020 — — 16,140 16,546 $ 6,585 37,239 2021 88,640 $ 23,136 41,483 Total $ 213,487 Automobile Cumulative paid loss and loss adjustment expenses, net of reinsurance For the Years Ended December 31, Accident Year 2017* 2018* 2019* 2020* 2021 2017 $ 21,246 $ 29,988 $ 33,987 $ 36,121 $ 36,898 2018 20,771 30,154 34,465 34,142 2019 17,032 25,235 21,630 2020 6,426 1,773 2021 45,640 Total $ 140,083 All outstanding liabilities before 2017, net of reinsurance $ 34 Liabilities for loss and LAE, net of reinsurance $ 73,438 *Unaudited required supplemental information. |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Reinsurance Disclosures [Abstract] | |
Schedule of effects of reinsurance | The effect of the Company’s reinsurance agreements on premiums, loss and LAE related to the insurance company for the years ended December 31, 2021 and December 31, 2020 is as follows (in thousands): December 31, 2021 Premium Premium Unearned Losses and LAE Loss and LAE Direct $ 110,719 $ 111,063 $ 15,726 $ 102,991 $ 73,438 Ceded (19,411) (33,080) — (14,701) — Net $ 91,308 $ 77,983 $ 15,726 $ 88,290 $ 73,438 December 31, 2020 Premium Premium Unearned Losses and LAE Loss and LAE Direct $ 100,611 $ 99,712 $ 16,070 $ 74,943 $ 57,093 Ceded (85,504) (84,740) (13,668) (54,010) (33,941) Net $ 15,107 $ 14,972 $ 2,402 $ 20,933 $ 23,152 |
Notes Payable, net (Tables)
Notes Payable, net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt outstanding, net | The following table summarizes the Company’s debt outstanding, net of issuance costs (in thousands): December 31, December 31, 2019 Loan and Security Agreement $ — $ 25,000 Subordinated Note Purchase and Security Agreement — 32,461 Paycheck Protection Program Loan — 5,880 Principal Amount Due — 63,341 Less: Unamortized debt issuance costs and discounts — (11,407) Notes payable, net $ — $ 51,934 |
Leases, Commitments, and Cont_2
Leases, Commitments, and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Components of lease costs | Components of the Company’s operating lease expense are as follows (in thousands): Year Ended Operating lease cost $ 2,785 Short-term lease cost — Variable lease cost 187 Total lease costs included in other operating expenses $ 2,972 The weighted average remaining operating lease term and weighted average discount rate used in the calculation of the Company’s lease assets and lease liabilities were as follows (in thousands): Year Ended Weighted average remaining operating lease term (in years) 7.6 Weighted average discount rate 5.1% Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands): Year Ended Operating cash flows from operating leases $ 3,257 Right-of-use assets obtained in exchange for new lease liabilities $ — |
Maturing of operating lease liabilities | Maturities of operating lease liabilities as of December 31, 2021 is as follows (in thousands): As of December 31, Leases 2022 $ 2,181 2023 2,373 2024 2,500 2025 1,849 2026 2,027 Thereafter 7,969 Total lease payments $ 18,899 Less: imputed interest 495 Total lease liability $ 18,404 |
Schedule of future minimum lease payments | The following table summarized the future minimum lease payments due under operating leases as of December 31, 2020 and reflect the application of the prior year lease standard (ASC 840, Leases). These amounts were disclosed in the Company’s prior year audited financial statements for the year ended December 31, 2020 (in thousands): Year Ended December 31, Purchase Obligations Leases Total 2021 $ 3,949 $ 3,276 $ 7,225 2022 — 3,093 3,093 2023 — 3,181 3,181 2024 — 3,190 3,190 2025 — 2,433 2,433 Thereafter — 11,186 11,186 Total minimum lease payments $ 3,949 $ 26,359 $ 30,308 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of restricted stock units | A summary of the Company’s RSUs as of December 31, 2021 is presented in the table below: Number of RSUs Weighted-Average Fair Balance at December 31, 2020 — $ — Granted 11,130,711 8.67 Vested (2,742,608) 10.39 Forfeited (1,146,123) 7.61 Balance at December 31, 2021 7,241,980 $ 8.19 |
Schedule of estimate the value of options granted | The following table provides a range of the assumptions for shares granted in 2021: 2021 Expected volatility 65% - 70% Expected term (years) 0.60 - 1.90 Expected dividend yield n/a Risk-free interest rate .3% - .6% The following assumptions were used to estimate the value of options granted during the years ended December 31, 2021 and December 31, 2020: Year ended December 31, Forfeiture rate 26.2 % Volatility 62.00 % Expected term (years) 5.33 Risk-free interest rate 0.53 % Expected dividends — Year ended December 31, Forfeiture rate 19.62% - 25.76% Volatility 47.00% - 62.00% Expected term (years) 4.95 - 7.00 Risk-free interest rate 0.26% - 1.73% Expected dividends — |
Schedule of activity of stock option plan | The following table summarizes the activity of the Company’s stock option plan: Stock Weighted- Weighted- Aggregate Outstanding as of December 31, 2020 5,931,024 $ 2.61 8.10 $ 70,192 Options granted 4,231 14.45 Options exercised (1,103,263) 2.21 Options cancelled or expired and returned to plan (2,457,488) 2.38 Outstanding as of December 31, 2021 2,374,504 3.00 8.25 $ 375 Vested and exercisable to vest as of December 31, 2021 767,785 2.97 7.91 $ 352 Vested and expected as of December 31, 2021 1,670,909 $ 3.00 8.11 $ 374 |
Schedule of stock-based compensation expense for employee and nonemployee options | The following table illustrates stock-based compensation expense for employee and non-employee RSUs and options for the year ended December 31, 2021 and 2020 (in thousands). Years Ended December 31, 2021 2020 Cost of revenues $ 883 $ 104 Research and development 3,932 714 Sales and marketing 1,222 44 Other operating expenses 27,865 595 Total stock-based compensation $ 33,902 $ 1,457 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax provision | The components of the Company’s federal income tax expense (benefit) are as follows: December 31, December 31, Current $ — $ — Deferred — (84) Income tax expense (benefit) $ — $ (84) |
Schedule of federal income tax rate to the Company’s effective tax rate | The following table presents a reconciliation of the tax expense (benefit) based on the statutory rate to the Company's actual tax expense (benefit) in the consolidated statements of operations: December 31, December 31, Statutory tax expense $ (45,456) $ (25,241) Warrants – mark to market 545 14,552 Research and development tax credit (1,555) (1,170) Change in valuation allowance 43,604 11,435 Other, net 2,862 340 Income tax expense (benefit) $ — $ (84) |
Schedule of net deferred tax assets or liabilities | The following table summarizes information regarding the Company's deferred tax assets, deferred tax liabilities and valuation allowance (in thousands): December 31, December 31, Deferred tax assets: Net operating loss carryforwards $ 125,037 $ 73,364 Tax credit carryforwards 7,388 4,780 Unearned premium reserves 662 103 Discounting of unpaid losses 631 167 Stock compensation 2,487 501 Other 324 1,048 Total deferred tax assets 136,529 79,963 Deferred tax liabilities: Depreciation & Amortization (6,507) (3,691) Total deferred tax liabilities (6,507) (3,691) Net deferred tax assets before valuation allowance 130,022 76,272 Less valuation allowance (130,022) (76,272) Balance end of year $ — $ — |
Schedule of uncertain tax positions | The following is a reconciliation of the beginning and ending amount of the Company’s total gross unrecognized tax benefit liabilities (in thousands): December 31, December 31, Gross unrecognized tax benefit, beginning of the year $ 1,754 $ 1,364 Increases related to tax positions taken during current year 519 390 Gross unrecognized tax benefit, ending balance $ 2,273 $ 1,754 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of operating results of the Company’s reportable segments | The following table summarizes the operating results of the Company’s reportable segments (in thousands): Years Ended 2021 2020 Revenue: Insurance services $ 99,973 $ 29,395 Enterprise business solutions 4,924 5,669 Total revenue $ 104,897 $ 35,064 Contribution: Insurance services $ (5,624) $ 11,914 Enterprise business solutions (3,380) (563) Total contribution $ (9,004) $ 11,351 |
Schedule of contribution to its total loss from operations | The following table provides a reconciliation of the Company’s total reportable segments’ contribution to its total loss from operations (in thousands): Years Ended 2021 2020 Total segment contribution $ (9,004) $ 11,351 Ceded premium, losses and LAE (5,082) 15,443 Other income 2,373 2,421 Policy services expenses and other 5,884 2,676 Sales, marketing, and other acquisition costs 102,165 5,029 Research and development 8,565 2,433 Amortization of capitalized software 11,306 11,188 Other operating expenses 63,491 16,981 Loss from operations (197,706) (44,820) Total other expense 18,753 75,361 Loss before taxes $ (216,459) $ (120,181) |
Schedule of geographical breakdown of direct earned premiums | Direct earned premium by state is as follows (in thousands): Years Ended 2021 2020 California $ 64,186 $ 58,276 Washington 13,504 11,391 New Jersey 10,944 9,155 Oregon 7,148 7,232 Illinois 4,404 4,474 Arizona 5,650 4,527 Pennsylvania 2,836 2,932 Virginia 2,391 1,725 Total premiums earned $ 111,063 $ 99,712 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | The following table sets forth the computation of basic and diluted net loss per share attributable to the Company's common stockholders: Years ended December 31, 2021 2020 Numerator: Net loss attributable to common stockholders ($ in thousands) $ (216,459) $ (120,097) Denominator: Weighted average common shares outstanding - basic and diluted 114,609,563 8,890,631 Net loss per share attributable to common stockholders - basic and diluted $ (1.89) $ (13.51) |
Schedule of antidilutive securities excluded from computation of earnings per share | The following potential outstanding shares of Common Stock were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive: As of December 31, 2021 2020 Convertible preferred stock — 68,776,614 Outstanding stock options - Stock Plan 2,374,504 5,931,024 Warrants for preferred stock — 9,574,556 Warrants for common stock 7,846,666 — Restricted stock units 11,357,714 — Total anti-dilutive securities 21,578,884 84,282,194 |
Statutory Financial Informati_2
Statutory Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Insurance [Abstract] | |
Statutory Accounting Practices Disclosure | The Insurance Company maintained statutory capital and surplus and had statutory net loss as of and for the years ended December 31, 2021 and 2020 as follows (in thousands): December 31, 2021 2020 Statutory capital and surplus $ 32,639 $ 22,453 Statutory net loss $ (825) $ (2,078) |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies - Narrative (Details) $ / shares in Units, $ in Thousands | Nov. 08, 2021USD ($)$ / shares | Jun. 30, 2021USD ($) | Mar. 31, 2020employee | Dec. 31, 2021USD ($)state$ / sharesshares | Dec. 31, 2020USD ($)$ / shares | Feb. 28, 2021 | Jan. 01, 2021USD ($) | Dec. 31, 2019USD ($) |
Business Description And Accounting Policies [Line Items] | ||||||||
Number of states in which entity operates | state | 8 | |||||||
Loss and loss adjustment expense reserves | $ 73,438 | $ 57,093 | $ 52,222 | |||||
Exchange ratio for reverse recapitalization | 1.01547844 | |||||||
Business combination converted exchange ratio | 1.01547844 | |||||||
Common stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||||
Deferred contract cost | $ 100 | $ 200 | ||||||
Deferred revenue recognized | 2,900 | 2,300 | ||||||
Remaining performance obligation amount | $ 14,300 | 17,200 | ||||||
Website and software development costs, useful life | 3 years | |||||||
Advertising expenses | $ 33,600 | $ 7,200 | ||||||
Operating lease liability | 18,404 | |||||||
Right-of-use asset | $ 14,200 | |||||||
Public Warrants | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Warrants (in shares) | shares | 7,666,646 | |||||||
Private Warrants | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Warrants (in shares) | shares | 180,000 | |||||||
Convertible Preferred Stock Warrants | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Warrants (in shares) | shares | 0 | |||||||
Accounting Standards Update 2016-02 | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Operating lease liability | $ 21,200 | |||||||
Right-of-use asset | $ 15,900 | |||||||
Lemonade, Inc. | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Common stock par value (in dollars per share) | $ / shares | $ 0.00001 | |||||||
Metromile, Inc. | Lemonade, Inc. | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Fully diluted equity value | $ 500,000 | |||||||
Equity value, net of unrestricted cash and cash equivalents | $ 340,000 | |||||||
Business combination converted exchange ratio | 0.05263 | |||||||
Common stock par value (in dollars per share) | $ / shares | $ 0.00001 | |||||||
Revenue, Segment Benchmark | Customer Concentration Risk | One Customer | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Concentration risk percentage | 88.20% | |||||||
Minimum | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Useful life | 3 years | |||||||
Maximum | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Useful life | 5 years | |||||||
Bitcoin | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Indefinite-lived intangible assets acquired | $ 1,000 | $ 1,000 | ||||||
COVID-19 | ||||||||
Business Description And Accounting Policies [Line Items] | ||||||||
Temporary reduction in number of employees | employee | 125 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies - Remaining Performance Obligations (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | ||
Overview and Basis of Presentation (Details) [Line Items] | ||
Remaining performance obligation, percentage | 51.00% | |
Remaining performance obligation, period | 24 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | ||
Overview and Basis of Presentation (Details) [Line Items] | ||
Remaining performance obligation, percentage | 66.00% | |
Remaining performance obligation, period | 24 months |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Schedule of assets measured on a recurring basis at fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Cash equivalents | ||
Total cash equivalents | $ 113,402 | $ 6,771 |
Restricted cash equivalents | ||
Total restricted cash equivalents | 22,900 | 9,532 |
Marketable securities - restricted | ||
Total marketable securities - restricted | 62,625 | 24,651 |
Money market accounts | ||
Cash equivalents | ||
Total cash equivalents | 113,402 | 6,771 |
Restricted cash equivalents | ||
Total restricted cash equivalents | 19,569 | 6,201 |
Certificates of deposits | ||
Restricted cash equivalents | ||
Total restricted cash equivalents | 3,331 | 3,331 |
Corporate debt securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 2,545 | 5,955 |
U.S. treasury and agency securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 35,281 | 6,994 |
Commercial paper | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 16,081 | 8,791 |
Asset backed securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 8,718 | 2,911 |
Level 1 | ||
Cash equivalents | ||
Total cash equivalents | 113,402 | 6,771 |
Restricted cash equivalents | ||
Total restricted cash equivalents | 22,900 | 9,532 |
Marketable securities - restricted | ||
Total marketable securities - restricted | 33,295 | 6,994 |
Level 1 | Money market accounts | ||
Cash equivalents | ||
Total cash equivalents | 113,402 | 6,771 |
Restricted cash equivalents | ||
Total restricted cash equivalents | 19,569 | 6,201 |
Level 1 | Certificates of deposits | ||
Restricted cash equivalents | ||
Total restricted cash equivalents | 3,331 | 3,331 |
Level 1 | Corporate debt securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 0 | 0 |
Level 1 | U.S. treasury and agency securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 33,295 | 6,994 |
Level 1 | Commercial paper | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 0 | 0 |
Level 1 | Asset backed securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 0 | 0 |
Level 2 | ||
Cash equivalents | ||
Total cash equivalents | 0 | 0 |
Restricted cash equivalents | ||
Total restricted cash equivalents | 0 | 0 |
Marketable securities - restricted | ||
Total marketable securities - restricted | 29,330 | 17,657 |
Level 2 | Money market accounts | ||
Cash equivalents | ||
Total cash equivalents | 0 | 0 |
Restricted cash equivalents | ||
Total restricted cash equivalents | 0 | 0 |
Level 2 | Certificates of deposits | ||
Restricted cash equivalents | ||
Total restricted cash equivalents | 0 | 0 |
Level 2 | Corporate debt securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 2,545 | 5,955 |
Level 2 | U.S. treasury and agency securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 1,986 | 0 |
Level 2 | Commercial paper | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 16,081 | 8,791 |
Level 2 | Asset backed securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 8,718 | 2,911 |
Level 3 | ||
Cash equivalents | ||
Total cash equivalents | 0 | 0 |
Restricted cash equivalents | ||
Total restricted cash equivalents | 0 | 0 |
Marketable securities - restricted | ||
Total marketable securities - restricted | 0 | 0 |
Level 3 | Money market accounts | ||
Cash equivalents | ||
Total cash equivalents | 0 | 0 |
Restricted cash equivalents | ||
Total restricted cash equivalents | 0 | 0 |
Level 3 | Certificates of deposits | ||
Restricted cash equivalents | ||
Total restricted cash equivalents | 0 | 0 |
Level 3 | Corporate debt securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 0 | 0 |
Level 3 | U.S. treasury and agency securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 0 | 0 |
Level 3 | Commercial paper | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | 0 | 0 |
Level 3 | Asset backed securities | ||
Marketable securities - restricted | ||
Total marketable securities - restricted | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Schedule of warrant liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance, beginning of period | $ 83,652 | $ 1,738 |
Issuance of warrant on Series E convertible preferred stock | 12,620 | |
Increase in fair value of warrant | 47,062 | 69,294 |
Exercise of preferred stock warrants prior to Business Combination | (130,714) | |
Public and Private placement Warrants acquired in Business Combination | 45,623 | |
Decrease in fair value of Public and Private placement Warrants | (44,467) | |
Balance, end of period | $ 1,156 | $ 83,652 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Schedule of Black-Scholes option valuation model (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liability | $ 83 |
Exercise Price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Private placement warrants | 11.50 |
Dividend Yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Private placement warrants | 0 |
Volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Private placement warrants | 0.75 |
Risk-Free Interest Rate | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Private placement warrants | 0.0113 |
Expected Term | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Private placement warrants | 4.1 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Narrative (Details) | Dec. 31, 2020shares |
Warrants for preferred stock | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrants (in shares) | 0 |
Marketable Securities - Narrati
Marketable Securities - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Investments, Debt and Equity Securities [Abstract] | ||
Marketable securities bonds with carrying values | $ 5.2 | $ 4.9 |
Marketable Securities - Schedul
Marketable Securities - Schedule of available-for-sale securities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 62,741 | $ 24,634 |
ACL | 0 | |
Unrealized Gain | 0 | 17 |
Unrealized Loss | (116) | 0 |
Estimated Fair Value | 62,625 | 24,651 |
Corporate debt securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 2,547 | 5,938 |
ACL | 0 | |
Unrealized Gain | 0 | 17 |
Unrealized Loss | (2) | 0 |
Estimated Fair Value | 2,545 | 5,955 |
U.S. treasury and agency securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 35,385 | 6,994 |
ACL | 0 | |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (104) | 0 |
Estimated Fair Value | 35,281 | 6,994 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16,081 | 8,791 |
ACL | 0 | |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Estimated Fair Value | 16,081 | 8,791 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8,728 | 2,911 |
ACL | 0 | |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (10) | 0 |
Estimated Fair Value | $ 8,718 | $ 2,911 |
Marketable Securities - Sched_2
Marketable Securities - Schedule of amortized cost and estimated fair value of marketable securities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Securities, Available-for-sale [Line Items] | ||
Due within one year | $ 41,603 | $ 21,603 |
Due between one to five years | 21,138 | 3,031 |
Total | 62,741 | 24,634 |
Estimated Fair Value | ||
Debt Securities, Available-for-sale [Line Items] | ||
Due within one year | 41,596 | 21,629 |
Due between one to five years | 21,029 | 3,022 |
Total | $ 62,625 | $ 24,651 |
Marketable Securities - Continu
Marketable Securities - Continuous loss position (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Fair Value | ||
Less Than 12 Months | $ 43,070 | $ 4,435 |
12 Months or Longer | 0 | 0 |
Total | 43,070 | 4,435 |
Unrealized Losses | ||
Less Than 12 Months | (116) | 0 |
12 Months or Longer | 0 | 0 |
Total | (116) | 0 |
Corporate debt securities | ||
Fair Value | ||
Less Than 12 Months | 737 | 2,826 |
12 Months or Longer | 0 | 0 |
Total | 737 | 2,826 |
Unrealized Losses | ||
Less Than 12 Months | (2) | 0 |
12 Months or Longer | 0 | 0 |
Total | (2) | 0 |
U.S. treasury and agency securities | ||
Fair Value | ||
Less Than 12 Months | 31,809 | 1,016 |
12 Months or Longer | 0 | 0 |
Total | 31,809 | 1,016 |
Unrealized Losses | ||
Less Than 12 Months | (104) | 0 |
12 Months or Longer | 0 | 0 |
Total | (104) | 0 |
Commercial paper | ||
Fair Value | ||
Less Than 12 Months | 1,808 | 0 |
12 Months or Longer | 0 | 0 |
Total | 1,808 | 0 |
Unrealized Losses | ||
Less Than 12 Months | 0 | 0 |
12 Months or Longer | 0 | 0 |
Total | 0 | 0 |
Asset backed securities | ||
Fair Value | ||
Less Than 12 Months | 8,716 | 593 |
12 Months or Longer | 0 | 0 |
Total | 8,716 | 593 |
Unrealized Losses | ||
Less Than 12 Months | (10) | 0 |
12 Months or Longer | 0 | 0 |
Total | $ (10) | $ 0 |
Business Combination - Schedule
Business Combination - Schedule of business combination proceeds (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Reverse Recapitalization [Abstract] | |
Cash – INSU’s trust and cash (net of redemptions) | $ 229,925 |
Cash – PIPE | 170,000 |
Less transaction costs and advisory fees paid | 31,456 |
Less cash payments to Metromile Operating Company stockholders | 32,000 |
Net Business Combination and PIPE financing | 336,469 |
Less non-cash net liabilities assumed from INSU | 45,516 |
Net contributions from Business Combination and PIPE Financing | $ 290,953 |
Business Combination - Schedu_2
Business Combination - Schedule of equity changes due to business combination (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Reverse Recapitalization [Abstract] | |
INSU Class A Common stock, outstanding prior to Business Combination (in shares) | 23,540,000 |
INSU Class B Common stock, outstanding prior to Business Combination (in shares) | 6,669,667 |
Less redemption of INSU shares (in shares) | 8,372 |
Common stock of INSU (in shares) | 30,201,295 |
Shares issued in PIPE (in shares) | 17,000,000 |
Business Combination and PIPE financing shares (in shares) | 47,201,295 |
Metromile Operating Company shares (in shares) | 79,525,839 |
Total shares of common stock immediately after Business Combination (in shares) | 126,727,134 |
Common and preferred stock outstanding (in shares) | 78,313,665 |
Business combination converted exchange ratio | 1.01547844 |
Business Combination - Narrativ
Business Combination - Narrative (Details) $ / shares in Units, $ in Millions | Nov. 08, 2021USD ($)tradingDay$ / shares | Dec. 31, 2021USD ($)$ / shares | Dec. 31, 2020$ / shares |
Business Combination, Separately Recognized Transactions [Line Items] | |||
Business combination converted exchange ratio | 1.01547844 | ||
Common stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | |
Lemonade, Inc. | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Common stock par value (in dollars per share) | $ / shares | $ 0.00001 | ||
Metromile, Inc. | Lemonade, Inc. | |||
Business Combination, Separately Recognized Transactions [Line Items] | |||
Fully diluted equity value | $ | $ 500 | ||
Equity value, net of unrestricted cash and cash equivalents | $ | $ 340 | ||
Business combination converted exchange ratio | 0.05263 | ||
Common stock par value (in dollars per share) | $ / shares | $ 0.00001 | ||
Number of trading days | tradingDay | 20 | ||
Number of trading days prior to conversion | tradingDay | 3 | ||
Transaction costs | $ | $ 3.5 |
Website and Software Developm_3
Website and Software Development Costs, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Research and Development [Abstract] | ||
Capitalized website and software development costs | $ 81,782 | $ 64,478 |
Accumulated amortization | (55,916) | (46,077) |
Capitalized website and software development costs, net | 25,866 | 18,401 |
Amortization of capitalized software | 11,306 | 11,188 |
Net amount of capitalized website and software development costs written off | $ 0 | $ 0 |
Telematics Devices, Improveme_3
Telematics Devices, Improvements, and Equipment, Net (Details) $ in Thousands | Dec. 31, 2021USD ($)vendordevice | Dec. 31, 2020USD ($)device |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 22,595 | $ 24,019 |
Accumulated depreciation and amortization | (8,941) | (11,303) |
Telematics devices, improvements and equipment, net | 13,654 | 12,716 |
Telematics devices | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 12,506 | $ 14,018 |
Number of vendors | vendor | 1 | |
Number of devices available to send to policyholders | device | 74,500 | 49,200 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,692 | $ 2,677 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 7,397 | $ 7,324 |
Deferred Policy Acquisition C_3
Deferred Policy Acquisition Costs, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Policy Acquisition Costs Disclosures [Abstract] | ||
Deferred policy acquisition costs | $ 11,533 | $ 10,511 |
Deferred ceding commission | (114) | (1,202) |
Accumulated amortization | (9,986) | (8,653) |
Deferred policy acquisition costs, net | 1,433 | 656 |
Total amortization expense | $ 1,300 | $ 1,500 |
Digital Assets, Net (Details)
Digital Assets, Net (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Impairment on digital assets | $ 183 | $ 0 | |
Bitcoin | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Indefinite-lived intangible assets acquired | $ 1,000 | 1,000 | |
Impairment on digital assets | 200 | ||
Indefinite-lived intangible assets (excluding goodwill) | 800 | ||
Impairment losses | 200 | ||
Indefinite-lived intangible assets (excluding goodwill), fair value disclosure | $ 1,300 |
Loss and Loss Adjustment Expe_3
Loss and Loss Adjustment Expense Reserves - Reconciliation of the reserve balances for losses and LAE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balance at beginning of period | $ 57,093 | $ 52,222 |
Less reinsurance recoverable | (33,941) | (28,837) |
Net balance at beginning of period | 23,152 | 23,385 |
Incurred related to: | ||
Current year | 216,785 | |
Total incurred | 88,467 | 21,208 |
Paid related to: | ||
Current year | 45,640 | 6,425 |
Prior years | (7,636) | 14,741 |
Total paid | 38,004 | 21,166 |
Net balance at end of period | 73,438 | 23,152 |
Plus reinsurance recoverable | 0 | 33,941 |
Balance at end of period | 73,438 | 57,093 |
Property, Liability and Casualty Insurance Product Line | ||
Incurred related to: | ||
Current year | 88,640 | 16,140 |
Prior years | (350) | 4,793 |
Total incurred | $ 88,290 | $ 20,933 |
Loss and Loss Adjustment Expe_4
Loss and Loss Adjustment Expense Reserves - Average historical claims duration (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Years | ||
1 | 51.00% | |
2 | 24.00% | |
3 | 11.00% | |
4 | 6.00% | |
5 | 2.00% | |
6 | ||
7 | ||
8 | ||
9 | ||
10 |
Loss and Loss Adjustment Expe_5
Loss and Loss Adjustment Expense Reserves - Incurred and paid claims development, net of reinsurance (Details) $ in Thousands | Dec. 31, 2021USD ($)claim | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred loss and loss adjustment expenses, net of reinsurance | $ 213,487 | ||||
IBNR Reserves | |||||
Cumulative Number of Reported Claims | claim | |||||
Cumulative paid loss and loss adjustment expenses, net of reinsurance | $ 140,083 | ||||
All outstanding liabilities before 2017, net of reinsurance | 34 | ||||
Liabilities for loss and LAE, net of reinsurance | 73,438 | ||||
2017 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred loss and loss adjustment expenses, net of reinsurance | 38,619 | $ 37,529 | $ 36,326 | $ 36,244 | $ 34,309 |
IBNR Reserves | $ 1,090 | ||||
Cumulative Number of Reported Claims | claim | 29,064,000 | ||||
Cumulative paid loss and loss adjustment expenses, net of reinsurance | $ 36,898 | 36,121 | 33,987 | 29,988 | $ 21,246 |
2018 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred loss and loss adjustment expenses, net of reinsurance | 38,585 | 38,657 | 36,501 | 37,879 | |
IBNR Reserves | $ 2,529 | ||||
Cumulative Number of Reported Claims | claim | 44,097,000 | ||||
Cumulative paid loss and loss adjustment expenses, net of reinsurance | $ 34,142 | 34,465 | 30,154 | $ 20,771 | |
2019 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred loss and loss adjustment expenses, net of reinsurance | 31,097 | 32,954 | 31,705 | ||
IBNR Reserves | $ 3,804 | ||||
Cumulative Number of Reported Claims | claim | 51,101,000 | ||||
Cumulative paid loss and loss adjustment expenses, net of reinsurance | $ 21,630 | 25,235 | $ 17,032 | ||
2020 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred loss and loss adjustment expenses, net of reinsurance | 16,546 | 16,140 | |||
IBNR Reserves | $ 6,585 | ||||
Cumulative Number of Reported Claims | claim | 37,239,000 | ||||
Cumulative paid loss and loss adjustment expenses, net of reinsurance | $ 1,773 | $ 6,426 | |||
2021 | |||||
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense [Line Items] | |||||
Incurred loss and loss adjustment expenses, net of reinsurance | 88,640 | ||||
IBNR Reserves | $ 23,136 | ||||
Cumulative Number of Reported Claims | claim | 41,483,000 | ||||
Cumulative paid loss and loss adjustment expenses, net of reinsurance | $ 45,640 |
Loss and Loss Adjustment Expe_6
Loss and Loss Adjustment Expense Reserves - Incurred and paid claims development (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Insurance [Abstract] | |||
Total incurred losses and loss adjustment expenses, net of reinsurance | $ 216,785 | ||
Total paid losses and loss adjustment expenses, net of reinsurance | (143,347) | ||
Liabilities for loss and LAE, net of reinsurance | 73,438 | $ 23,152 | $ 23,385 |
Reinsurance recoverable on unpaid loss | 0 | 33,941 | 28,837 |
Loss and loss adjustment expense reserves | $ 73,438 | $ 57,093 | $ 52,222 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |||||||||
Feb. 28, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Apr. 30, 2021reinsurer | May 01, 2020agreement | Apr. 30, 2020reinsurer | May 01, 2019agreement | Apr. 30, 2019reinsurer | May 01, 2018agreement | Apr. 30, 2018reinsurer | May 01, 2017agreement | |
Effects of Reinsurance [Line Items] | |||||||||||
Paid net | $ 9 | ||||||||||
Number of quota-share reinsurance agreements | agreement | 5 | 4 | 3 | 2 | |||||||
Reinsurance ceding rate | 85.00% | 85.00% | 85.00% | 85.00% | |||||||
Number of unaffiliated reinsurers | reinsurer | 5 | 4 | 3 | 2 | |||||||
Acquisition costs from reinsurance | $ 4.7 | $ 11.3 | |||||||||
Metromile Insurance Company | |||||||||||
Effects of Reinsurance [Line Items] | |||||||||||
Paid net | $ 6.2 |
Reinsurance - Schedule of reins
Reinsurance - Schedule of reinsurance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Effects of Reinsurance [Line Items] | |||
Total premiums earned | $ 111,063 | $ 99,712 | |
Direct Unearned Premium | 15,726 | 16,070 | |
Ceded Unearned Premium | 0 | (13,668) | |
Ceded Loss and LAE Reserves | 0 | (33,941) | $ (28,837) |
Net Premium Written | 91,308 | 15,107 | |
Net Premium Earned | 77,983 | 14,972 | |
Net Unearned Premium | 15,726 | 2,402 | |
Net Losses and LAE Incurred | 88,290 | 20,933 | |
Net Loss and LAE Reserves | 73,438 | 23,152 | |
Direct | |||
Effects of Reinsurance [Line Items] | |||
Direct Premium Written | 110,719 | 100,611 | |
Total premiums earned | 111,063 | 99,712 | |
Direct Unearned Premium | 15,726 | 16,070 | |
Direct Losses and LAE Incurred | 102,991 | 74,943 | |
Direct Loss and LAE Reserves | 73,438 | 57,093 | |
Ceded | |||
Effects of Reinsurance [Line Items] | |||
Ceded Premium Written | (19,411) | (85,504) | |
Ceded Premium Earned | (33,080) | (84,740) | |
Ceded Unearned Premium | 0 | (13,668) | |
Ceded Losses and LAE Incurred | (14,701) | (54,010) | |
Ceded Loss and LAE Reserves | $ 0 | $ (33,941) |
Notes Payable, net - Schedule o
Notes Payable, net - Schedule of debt outstanding, net (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Principal Amount Due | $ 0 | $ 63,341 |
Less: Unamortized debt issuance costs and discounts | 0 | (11,407) |
Notes payable, net | 0 | 51,934 |
2019 Loan and Security Agreement | ||
Debt Instrument [Line Items] | ||
Principal Amount Due | 0 | 25,000 |
Subordinated Note Purchase and Security Agreement | ||
Debt Instrument [Line Items] | ||
Principal Amount Due | 0 | 32,461 |
Notes payable, net | 32,500 | |
Paycheck Protection Program Loan | ||
Debt Instrument [Line Items] | ||
Principal Amount Due | $ 0 | $ 5,880 |
Notes Payable, net - Narrative
Notes Payable, net - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||
Borrowing amount | $ 5,900 | |||
Debt interest rate | 1.00% | |||
Deferral period | 10 months | |||
Debt term | 168 days | |||
Interest and principal | $ 300 | |||
Notes payable | $ 0 | $ 51,934 | ||
Warrants issued for debt (in shares) | 8,669,076 | |||
Estimated fair value | $ 12,500 | |||
Balloon payment | $ 600 | |||
Principal amount due | 24,300 | |||
Prepayment charge interest | 1.00% | |||
Subordinated Note Purchase and Security Agreement | ||||
Debt Instrument [Line Items] | ||||
Borrowing amount | 31,600 | |||
Debt interest rate | 2.00% | |||
Capitalized payment | 900 | |||
Additional funds | 15,000 | |||
Notes payable | 32,500 | |||
Paid-in-Kind Interest | $ 600 | |||
End of term fee rate | 1.00% | |||
Subordinated Note Purchase and Security Agreement | Debt Instrument, Outstanding Balance Threshold Two | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 5,000 | |||
2019 Loan and Security Agreement | ||||
Debt Instrument [Line Items] | ||||
Borrowing amount | 25,000 | |||
Series-E Convertible Preferred Stock | ||||
Debt Instrument [Line Items] | ||||
Estimated fair value | $ 500 | |||
Effective Date First Year | ||||
Debt Instrument [Line Items] | ||||
Prepayment charge | 3.00% | |||
Effective Date Second Year | ||||
Debt Instrument [Line Items] | ||||
Prepayment charge | 2.00% | |||
Minimum | Subordinated Note Purchase and Security Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 9.00% | |||
Minimum | Subordinated Note Purchase and Security Agreement | Debt Instrument, Outstanding Balance Threshold Three | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 9.00% | |||
Notes payable | $ 10,000 | |||
Maximum | Subordinated Note Purchase and Security Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 11.00% | |||
Maximum | Subordinated Note Purchase and Security Agreement | Debt Instrument, Outstanding Balance Threshold One | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 11.00% | |||
Notes payable | $ 5,000 | |||
Maximum | Subordinated Note Purchase and Security Agreement | Debt Instrument, Outstanding Balance Threshold Two | ||||
Debt Instrument [Line Items] | ||||
Notes payable | $ 10,000 | |||
Median | Subordinated Note Purchase and Security Agreement | Debt Instrument, Outstanding Balance Threshold Two | ||||
Debt Instrument [Line Items] | ||||
Debt interest rate | 10.00% |
Leases, Commitments, and Cont_3
Leases, Commitments, and Contingencies - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($) | Dec. 31, 2021USD ($)location | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of real estate locations | location | 2 | |
Right-of-use asset | $ 14,200 | |
Right-of-use assets, statement of financial position, extensible enumeration | Prepaid expenses and other assets | |
Operating lease liability | $ 18,404 | |
Operating lease liability, statement of financial position, extensible enumeration | Other liabilities | |
Weighted average remaining operating lease term (in years) | 7 years 7 months 6 days | |
Weighted average discount rate | 510.00% | |
Rent expense | $ 2,900 |
Leases, Commitments, and Cont_4
Leases, Commitments, and Contingencies - Operating lease cost (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease cost | $ 2,785 |
Short-term lease cost | 0 |
Variable lease cost | 187 |
Total lease costs included in other operating expenses | $ 2,972 |
Weighted average remaining operating lease term (in years) | 7 years 7 months 6 days |
Weighted average discount rate | 510.00% |
Operating cash flows from operating leases | $ 3,257 |
Right-of-use assets obtained in exchange for new lease liabilities | $ 0 |
Leases, Commitments, and Cont_5
Leases, Commitments, and Contingencies - Maturities of operating lease liabilities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 2,181 |
2023 | 2,373 |
2024 | 2,500 |
2025 | 1,849 |
2026 | 2,027 |
Thereafter | 7,969 |
Total lease payments | 18,899 |
Less: imputed interest | 495 |
Total lease liability | $ 18,404 |
Leases, Commitments, and Cont_6
Leases, Commitments, and Contingencies - Future minimum lease payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Purchase Obligations | |
2021 | $ 3,949 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 0 |
Thereafter | 0 |
Total minimum lease payments | 3,949 |
Leases | |
2021 | 3,276 |
2022 | 3,093 |
2023 | 3,181 |
2024 | 3,190 |
2025 | 2,433 |
Thereafter | 11,186 |
Total minimum lease payments | 26,359 |
Total | |
2021 | 7,225 |
2022 | 3,093 |
2023 | 3,181 |
2024 | 3,190 |
2025 | 2,433 |
Thereafter | 11,186 |
Total minimum lease payments | $ 30,308 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - shares | Dec. 31, 2021 | Dec. 31, 2020 |
Stockholders' Equity Note [Abstract] | ||
Common stock authorized (in shares) | 640,000,000 | 111,702,628 |
Common stock outstanding (in shares) | 128,221,885 | 8,992,039 |
Common stock issued (in shares) | 128,221,885 | 8,992,039 |
Preferred stock authorized (in shares) | 10,000,000 | 89,775,268 |
Preferred stock outstanding (in shares) | 0 | 68,776,614 |
Public and Private Warrants (De
Public and Private Warrants (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Public and Private Warrants (Details) [Line Items] | |
Number of shares to purchase (in shares) | shares | 1 |
Share price per share (in dollars per share) | $ / shares | $ 11.50 |
Purchase period, after completion of business combination | 30 days |
Purchase period, after IPO closing date | 12 months |
Period prior written notice of redemption | 30 days |
Closing period (in dollars per share) | $ / shares | $ 18 |
Trading days | 20 days |
Threshold trading day period | 30 days |
Public Warrants | |
Public and Private Warrants (Details) [Line Items] | |
Sale of stock (in shares) | shares | 7,666,646 |
Private Warrants | |
Public and Private Warrants (Details) [Line Items] | |
Sale of stock (in shares) | shares | 180,000 |
Warrant | |
Public and Private Warrants (Details) [Line Items] | |
Price per warrant (in dollars per share) | $ / shares | $ 0.01 |
Stock Option Plans - Narrative
Stock Option Plans - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units grants (in shares) | 9,828,868 | |
Share based compensation expense | $ 20,600,000 | |
Total unrecognized compensation cost | $ 63,900,000 | |
Recognized average period | 2 years 9 months 14 days | |
Total grant date fair value of shares vested | $ 28,600,000 | |
Issued outstanding performance-based awards (in shares) | 150,000 | |
Awards issued (in shares) | 11,130,711 | |
PSUs term | 5 years | |
Expense from PSUs | $ 9,400,000 | |
Expected dividend yield | 0.00% | 0.00% |
Weighted-average grant date fair value per share of stock options granted (in dollars per share) | $ 7.69 | $ 3.13 |
Unrecognized stock-based compensation cost | $ 1,500,000 | |
Stock Plan 2021 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock units granted (in shares) | 11,130,711 | |
Restricted stock units vested (in shares) | 1,301,843 | |
Recognized average period | 2 years 1 month 13 days | |
Performance Based Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation cost | $ 0 | |
Stock-based compensation expense | $ 2,500,000 | |
Awards issued (in shares) | 2,761,087 | |
Vesting threshold trading days | 20 days | |
Trading window | 30 days | |
Stock Plan 2021 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock reserved for issuance (in shares) | 38,018,247 | |
Vesting period | 4 years | |
Expected dividend yield | 0.00% |
Stock Option Plans - Schedule o
Stock Option Plans - Schedule of restricted stock units (Details) | 12 Months Ended |
Dec. 31, 2021$ / sharesshares | |
Number of RSUs | |
Beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 11,130,711 |
Vested (in shares) | shares | (2,742,608) |
Forfeited (in shares) | shares | (1,146,123) |
Ending balance (in shares) | shares | 7,241,980 |
Weighted-Average Fair Value | |
Beginning balance (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 8.67 |
Vested (in dollars per share) | $ / shares | 10.39 |
Forfeited (in dollars per share) | $ / shares | 7.61 |
Ending balance (in dollars per share) | $ / shares | $ 8.19 |
Stock Option Plans - Schedule_2
Stock Option Plans - Schedule of estimate the value of options granted (Details) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Option Plans (Details) - Schedule of estimate the value of options granted [Line Items] | ||
Expected volatility rate, minimum | 47.00% | |
Expected volatility rate, maximum | 62.00% | |
Expected term (years) | 5 years 3 months 29 days | |
Risk-free interest rate, minimum | 0.26% | |
Risk-free interest rate, maximum | 1.73% | |
Forfeiture rate | 26.20% | |
Forfeiture rate, minimum | 19.62% | |
Forfeiture rate, maximum | 25.76% | |
Volatility | 62.00% | |
Risk-free interest rate | 0.53% | |
Expected dividends | 0.00% | 0.00% |
Performance Based Awards | ||
Stock Option Plans (Details) - Schedule of estimate the value of options granted [Line Items] | ||
Expected volatility rate, minimum | 65.00% | |
Expected volatility rate, maximum | 70.00% | |
Risk-free interest rate, minimum | 0.30% | |
Risk-free interest rate, maximum | 0.60% | |
Minimum | ||
Stock Option Plans (Details) - Schedule of estimate the value of options granted [Line Items] | ||
Expected term (years) | 4 years 11 months 12 days | |
Minimum | Performance Based Awards | ||
Stock Option Plans (Details) - Schedule of estimate the value of options granted [Line Items] | ||
Expected term (years) | 7 months 6 days | |
Maximum | ||
Stock Option Plans (Details) - Schedule of estimate the value of options granted [Line Items] | ||
Expected term (years) | 7 years | |
Maximum | Performance Based Awards | ||
Stock Option Plans (Details) - Schedule of estimate the value of options granted [Line Items] | ||
Expected term (years) | 1 year 10 months 24 days |
Stock Option Plans - Schedule_3
Stock Option Plans - Schedule of activity of stock option plan (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Stock Number of Options | ||
Beginning balance (in shares) | 5,931,024 | |
Options granted (in shares) | 4,231 | |
Options exercised (in shares) | (1,103,263) | |
Options cancelled or expired and returned to plan (in shares) | (2,457,488) | |
Ending balance (in shares) | 2,374,504 | 5,931,024 |
Vested and exercisable to vest (in shares) | 767,785 | |
Vested and expected (in shares) | 1,670,909 | |
Weighted- Average Exercise Price | ||
Beginning balance (in dollars per share) | $ 2.61 | |
Options granted (in dollars per share) | 14.45 | |
Options exercised (in dollars per share) | 2.21 | |
Options cancelled or expired and returned to plan (in dollars per share) | 2.38 | |
Ending balance (in dollars per share) | 3 | $ 2.61 |
Vested and exercisable to vest (in dollars per share) | 2.97 | |
Vested and expected (in dollars per share) | $ 3 | |
Weighted- Average Remaining Contractual Term (Years) | ||
Outstanding | 8 years 3 months | 8 years 1 month 6 days |
Vested and exercisable to vest | 7 years 10 months 28 days | |
Vested and expected | 8 years 1 month 9 days | |
Aggregate Intrinsic Value (in thousands) | ||
Outstanding | $ 375 | $ 70,192 |
Vested and exercisable to vest | 352 | |
Vested and expected | $ 374 |
Stock Option Plans - Schedule_4
Stock Option Plans - Schedule of stock-based compensation expense for employee and nonemployee options (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 33,902 | $ 1,457 |
Cost of revenues | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 883 | 104 |
Research and development | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 3,932 | 714 |
Sales and marketing | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | 1,222 | 44 |
Other operating expenses | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Total stock-based compensation | $ 27,865 | $ 595 |
401(k) (Details)
401(k) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Retirement Benefits [Abstract] | ||
Percentage of eligible compensation | 90.00% | |
Percentage of employer match | 3.50% | |
Incurred expenses | $ 800,000 | $ 0 |
Incurred expenses in current year | $ 500,000 |
Income Taxes - Schedule of net
Income Taxes - Schedule of net deferred tax assets or liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Current | $ 0 | $ 0 |
Deferred | 0 | (84) |
Income tax expense (benefit) | $ 0 | $ (84) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of tax expense (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Statutory tax expense | $ (45,456) | $ (25,241) |
Warrants – mark to market | 545 | 14,552 |
Research and development tax credit | (1,555) | (1,170) |
Change in valuation allowance | 43,604 | 11,435 |
Other, net | 2,862 | 340 |
Income tax expense (benefit) | $ 0 | $ (84) |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 125,037 | $ 73,364 |
Tax credit carryforwards | 7,388 | 4,780 |
Unearned premium reserves | 662 | 103 |
Discounting of unpaid losses | 631 | 167 |
Stock compensation | 2,487 | 501 |
Other | 324 | 1,048 |
Total deferred tax assets | 136,529 | 79,963 |
Deferred tax liabilities: | ||
Depreciation & Amortization | (6,507) | (3,691) |
Total deferred tax liabilities | (6,507) | (3,691) |
Net deferred tax assets before valuation allowance | 130,022 | 76,272 |
Less valuation allowance | $ (130,022) | (76,272) |
Balance end of year | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Income Tax Contingency [Line Items] | ||
Net operating losses subject to expiration | $ 142 | |
Net operating losses not subject to expiration | 334 | |
Net operating loss carryforwards | 90.1 | |
Net operating loss carryforwards, research and development | 4.2 | |
Tax Year 2016 | ||
Income Tax Contingency [Line Items] | ||
Deduction limitation | 4 | |
Tax Year 2017 | ||
Income Tax Contingency [Line Items] | ||
Deduction limitation | 12 | |
Tax Year 2018 | ||
Income Tax Contingency [Line Items] | ||
Deduction limitation | 12 | |
Tax Year 2019 | ||
Income Tax Contingency [Line Items] | ||
Deduction limitation | 12 | |
Tax Year 2020 | ||
Income Tax Contingency [Line Items] | ||
Deduction limitation | 12 | |
Tax Year 2021 | ||
Income Tax Contingency [Line Items] | ||
Deduction limitation | 9.5 | |
Latest Tax Year | ||
Income Tax Contingency [Line Items] | ||
Deduction limitation | 4.2 | |
Domestic Tax Authority | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 475 | $ 279 |
Domestic Tax Authority | Research Tax Credit Carryforward | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforwards | 5 | 4 |
State and Local Jurisdiction | ||
Income Tax Contingency [Line Items] | ||
Net operating loss carryforwards | 463 | 258 |
State and Local Jurisdiction | Research Tax Credit Carryforward | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforwards | $ 4 | $ 3 |
Income Taxes - Uncertain tax po
Income Taxes - Uncertain tax positions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Gross unrecognized tax benefit, beginning of the year | $ 1,754 | $ 1,364 |
Increases related to tax positions taken during current year | 519 | 390 |
Gross unrecognized tax benefit, ending balance | $ 2,273 | $ 1,754 |
Segment and Geographic Inform_3
Segment and Geographic Information - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of operating segment | segment | 2 | |
Total asset | $ 313,415 | $ 202,164 |
Total revenue | 104,897 | 35,064 |
Revenue | Non-US | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 4,300 | 5,700 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total asset | 313,400 | 202,200 |
Insurance services | ||
Segment Reporting Information [Line Items] | ||
Total asset | 305,700 | 196,100 |
Total revenue | 99,973 | 29,395 |
Enterprise business solutions | ||
Segment Reporting Information [Line Items] | ||
Total asset | 7,700 | 6,100 |
Total revenue | $ 4,924 | $ 5,669 |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of operating results (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | $ 104,897 | $ 35,064 |
Total contribution | (9,004) | 11,351 |
Insurance services | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 99,973 | 29,395 |
Total contribution | (5,624) | 11,914 |
Enterprise business solutions | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total revenue | 4,924 | 5,669 |
Total contribution | $ (3,380) | $ (563) |
Segment and Geographic Inform_5
Segment and Geographic Information - Schedule of contribution to its total loss from operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting [Abstract] | ||
Total segment contribution | $ (9,004) | $ 11,351 |
Ceded premium, losses and LAE | (5,082) | 15,443 |
Other income | 2,373 | 2,421 |
Policy services expenses and other | 5,884 | 2,676 |
Sales, marketing, and other acquisition costs | 102,165 | 5,029 |
Research and development | 8,565 | 2,433 |
Amortization of capitalized software | 11,306 | 11,188 |
Other operating expenses | 63,491 | 16,981 |
Loss from operations | (197,706) | (44,820) |
Total other expense | 18,753 | 75,361 |
Loss before taxes | $ (216,459) | $ (120,181) |
Segment and Geographic Inform_6
Segment and Geographic Information - Schedule of geographical breakdown of direct earned premiums (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | $ 111,063 | $ 99,712 |
California | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | 64,186 | 58,276 |
Washington | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | 13,504 | 11,391 |
New Jersey | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | 10,944 | 9,155 |
Oregon | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | 7,148 | 7,232 |
Illinois | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | 4,404 | 4,474 |
Arizona | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | 5,650 | 4,527 |
Pennsylvania | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | 2,836 | 2,932 |
Virginia | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total premiums earned | $ 2,391 | $ 1,725 |
Net Loss per Share - Narrative
Net Loss per Share - Narrative (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Earnings Per Share [Abstract] | |
Reverse recapitalization ratio | 1.01547844 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of basic and diluted net loss per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | ||
Net loss attributable to common stockholders ($ in thousands) | $ (216,459) | $ (120,097) |
Denominator: | ||
Weighted average common shares outstanding — basic (in shares) | 114,609,563 | 8,890,631 |
Weighted average common shares outstanding - diluted (in shares) | 114,609,563 | 8,890,631 |
Net loss per share attributable to common stockholders — basic (in dollars per share) | $ (1.89) | $ (13.51) |
Net loss per share attributable to common stockholders - diluted (in dollars per share) | $ (1.89) | $ (13.51) |
Net Loss per Share - Schedule_2
Net Loss per Share - Schedule of antidilutive securities excluded from computation of earnings per share (Details) - shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 21,578,884 | 84,282,194 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 0 | 68,776,614 |
Outstanding stock options - Stock Plan | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 2,374,504 | 5,931,024 |
Warrant | Warrants for preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 0 | 9,574,556 |
Warrant | Warrants for common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 7,846,666 | 0 |
Restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total anti-dilutive securities (in shares) | 11,357,714 | 0 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Apr. 30, 2020 | Aug. 31, 2014 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||
Revenues | $ 104,897,000 | $ 35,064,000 | ||
Non-US | Revenue | ||||
Related Party Transaction [Line Items] | ||||
Revenues | 4,300,000 | 5,700,000 | ||
Investor | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 4,300,000 | |||
Accounts receivable | $ 0 | $ 0 | ||
Related Party Loan Receivable | Chief Executive Officer | ||||
Related Party Transaction [Line Items] | ||||
Loan amount | $ 400,000 | |||
Interest rate | 1.50% | 3.09% | ||
Due amount after termination of employee | 1 year | |||
Term after issuance | 10 years |
Statutory Financial Informati_3
Statutory Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Insurance [Abstract] | ||
Statutory capital and surplus | $ 32,639 | $ 22,453 |
Statutory net loss | (825) | $ (2,078) |
Capital contributions | $ 28,600 |
Subsequent Event (Details)
Subsequent Event (Details) | Jan. 01, 2022 |
Subsequent Event | |
Subsequent Event [Line Items] | |
Percentage of premiums, losses, and LAE ceded to the reinsurers | 25.00% |