TRUPANION INC

Previous wording

We provide medical insurance for cats and dogs in the United States, Canada, Continental Europe, and Australia. Through our data-driven, vertically-integrated approach, we develop and offer high value medical insurance products, priced specifically for each pet’s unique characteristics and coverage level. Our growing and loyal membership base provides us with highly predictable and recurring revenue.

Current wording

We provide medical insurance for cats and dogs in the United States, Canada, Continental Europe, Australia, and Puerto Rico. Through our data-driven, vertically-integrated approach, we develop and offer high value medical insurance products, priced specifically for each pet’s unique characteristics and coverage level. Our growing and loyal membership base provides us with highly predictable and recurring revenue.

Previous wording

We operate in two aggregated reporting segments: subscription business and other business. We generate revenue in our subscription business segment primarily by subscription fees from direct-to-consumer products. We operate our subscription business segment similar to other subscription-based businesses, with a focus on achieving a target margin prior to our new pet acquisition expense and acquiring as many pets as possible at our targeted average estimated internal rate of return. Within our subscription business, we also provide "Powered by Trupanion" pet insurance product offerings marketed by third parties and, in Canada, low and medium average revenue per pet ("ARPU") products marketed under the brand names, Furkin and PHI Direct. We are the underwriter and provide a full suite of services and support for these products. They are designed to align with the target margin profile of our subscription business segment. Within our subscription business segment, we also offer products in Continental Europe, which are currently underwritten using third-party underwriters.

Current wording

We operate in two aggregated reporting segments: subscription business and other business. We generate revenue in our subscription business segment primarily by subscription fees from direct-to-consumer products. We operate our subscription business segment similar to other subscription-based businesses, with a focus on achieving a target margin prior to our new pet acquisition expense and acquiring as many pets as possible at our targeted average estimated internal rate of return. Within our subscription business, we also provide "Powered by Trupanion" pet insurance product offerings marketed by third parties and, in Canada, low and medium average revenue per pet products marketed under the brand names, Furkin and PHI Direct. We are the underwriter and provide a full suite of services and support for these products. They are designed to align with the target margin profile of our subscription business segment. Within our subscription business segment, we also offer products in Continental Europe, which are currently underwritten using third-party underwriters.

Previous wording

The following table sets forth total pets enrolled and key operating metrics for our subscription business for each of the last eight fiscal quarters.

Current wording

The following tables set forth total pets enrolled and key operating metrics for our subscription business for year to date values as well as each of the last eight fiscal quarters.

Previous wording

Total pets enrolled. Total pets enrolled reflects the number of subscription pets or pets enrolled in one of the insurance products offered in our other business segment at the end of each period presented. We monitor total pets enrolled because it provides an indication of the growth of our consolidated business.

Current wording

Total pets enrolled. Total pets enrolled reflects the number of subscription pets and pets enrolled in one of the insurance products offered in our other business segment at the end of each period presented. We monitor total pets enrolled because it provides an indication of the growth of our consolidated business.

Previous wording

The following table reconciles GAAP new pet acquisition expense to non-GAAP net acquisition cost (in thousands) for each of the last eight fiscal quarters:

Current wording

The following table reconciles GAAP new pet acquisition expense to non-GAAP net acquisition cost (in thousands) for the six months ended June 30, 2024 and 2023 and for each of the last eight fiscal quarters:

Previous wording

We operate in two aggregated reporting segments: subscription business and other business. We generate revenue in our subscription business segment primarily by subscription fees from direct-to-consumer products. We operate our subscription business segment similar to other subscription-based businesses, with a focus on achieving a target margin prior to our pet acquisition expense and acquiring as many pets as possible at our targeted average estimated internal rate of return. Within our subscription business, we also provide "Powered by Trupanion" pet insurance product offerings marketed by third parties and, in Canada, low and medium ARPU products marketed under the brand names Furkin and PHI Direct. We provide a full suite of services and support for these products and they are designed to align with the target margin profile of our subscription business segment. Within our subscription business segment, we also offer products in Continental Europe, which are currently underwritten using third-party underwriters.

Current wording

We operate in two aggregated reporting segments: subscription business and other business. We generate revenue in our subscription business segment primarily by subscription fees from direct-to-consumer products. We operate our subscription business segment similar to other subscription-based businesses, with a focus on achieving a target margin prior to our pet acquisition expense and acquiring as many pets as possible at our targeted average estimated internal rate of return. Within our subscription business, we also provide "Powered by Trupanion" pet insurance product offerings marketed by third parties and, in Canada, low and medium average revenue per pet products marketed under the brand names Furkin and PHI Direct. We provide a full suite of services and support for these products and they are designed to align with the target margin profile of our subscription business segment. Within our subscription business segment, we also offer products in Continental Europe, which are currently underwritten using third-party underwriters.

Previous wording

Other cost of revenue for the subscription business segment includes direct and indirect member service expenses, Territory Partner renewal fees, payment processing fees and premium tax expenses. Other cost of revenue for the other business segment includes the commissions we pay to unaffiliated general agents, costs to administer the programs in the other business segment and premium taxes on the sales in this segment.

Current wording

Other cost of revenue for the subscription business segment includes direct and indirect member service expenses, Territory Partner fees upon policy renewals, payment processing fees and premium tax expenses. Other cost of revenue for the other business segment includes the commissions we pay to unaffiliated general agents, costs to administer the programs in the other business segment and premium taxes on the sales in this segment.

Previous wording

Other business segment. Our other business segment primarily includes other product offerings that have been materially different from those in our subscription business segment. In addition, we expect the growth rate of this segment to be materially different from our subscription business segment. We do not undertake marketing efforts for and are not the primary interface with the customers of the third parties for whom we underwrite other business segment policies. Our relationships in our other business segment are generally subject to termination provisions and are non-exclusive. Accordingly, we have limited influence on the volume of business of this segment. Loss of an entire program via contract termination could result in the associated policies and revenue being lost over a period of 12 to 18 months, which could have a material impact on our results of operations. In some cases, we have structured exclusive relationships, but those relationships have been and may continue to be subject to limitations on the number of enrolled pets as to which we will write policies for the third party. We may enter into additional relationships in this segment in the future, if we believe they will be beneficial, which could impact our operating results.

Current wording

Other business segment. Our other business segment primarily includes other product offerings that have been materially different from those in our subscription business segment. In addition, we expect the growth rate and margin profile of this segment to be materially different from our subscription business segment. We do not undertake marketing efforts for and are not the primary interface with the customers of the third parties for whom we underwrite other business segment policies. Our relationships in our other business segment are generally subject to termination provisions and are non-exclusive. Accordingly, we have limited influence on the volume of business of this segment. Loss of an entire program via contract termination could result in the associated policies and revenue being lost over a period of 12 to 18 months, which could have a material impact on our results of operations. In some cases, we have structured exclusive relationships, but those relationships have been and may continue to be subject to limitations on the number of enrolled pets as to which we will write policies for the third party. We may enter into additional relationships in this segment in the future, if we believe they will be beneficial, which could impact our operating results.

Previous wording

Comparison of the Three Months Ended March 31, 2024 and 2023

Current wording

Comparison of the Three and Six Months Ended June 30, 2024 and 2023

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023. Total revenue increased by $49.8 million, or 19%, to $306.1 million for the three months ended March 31, 2024. Revenue from our subscription business segment increased by $35.9 million, or 22%, to $201.1 million for the three months ended March 31, 2024. This increase was primarily due to an 11% increase in subscription pet months (the sum of pets enrolled for each month during a period) for policies underwritten by Trupanion during the respective periods and a 10% increase in monthly average revenue per pet. Revenue from our other business segment increased by $13.9 million, or 15%, to $105.0 million for the three months ended March 31, 2024. This increase was primarily driven by a 2% increase in pet months and a 14% increase in monthly average revenue per pet in this segment.

Current wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023. Total revenue increased by $94.0 million, or 18%, to $620.9 million for the six months ended June 30, 2024. Revenue from our subscription business segment increased by $71.3 million, or 21%, to $409.8 million for the six months ended June 30, 2024. This increase was primarily due to an 10% increase in subscription pet months (the sum of pets enrolled for each month during a period) for policies underwritten by Trupanion and a 11% increase in monthly average revenue per pet. Revenue from our other business segment increased by $22.7 million, or 12%, to $211.2 million for the six months ended June 30, 2024. This increase was primarily driven by a 15% increase in monthly average revenue per pet in this segment, offset by a 2% decrease in pet months in this segment.

Previous wording

This increase was driven by a $23.4 million, or 18%, increase in veterinary invoice expense and a $2.7 million, or 16%, increase in other cost of revenue. The 18% increase in veterinary invoice expense was driven by an 11% increase in total subscription pet months for policies underwritten by Trupanion and a 6% increase in veterinary invoice expense per pet month. The 16% increase in other cost of revenue was primarily due to general increases in costs attributable to growth in our membership. Subscription business cost of revenue decreased from 88% to 86% of revenue year-over-year.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023. Total cost of revenue for our subscription business segment increased $24.2 million, or 16%, to $175.7 million, for the three months ended June 30, 2024. This increase was driven by a $21.2 million, or 16%, increase in veterinary invoice expense and a $3.0 million, or 18%, increase in other cost of revenue. The 16% increase in veterinary invoice expense was driven by an 8% increase in total subscription pet months for policies underwritten by Trupanion and a 7% increase in veterinary invoice expense per pet month. The 18% increase in other cost of revenue was primarily due to general increases in costs attributable to growth in our membership. Subscription business cost of revenue decreased from 87% to 84% of revenue year-over-year.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023. Technology and development expenses increased by $2.1 million, or 42%, to $7.0 million for the three months ended March 31, 2024. This increase was primarily due to increases of $0.9 million in general compensation and other employee-related expenses, $0.6 million in infrastructure related expenses, and $0.4 million in development expense. Technology and development expenses remained constant at 2% of total revenue year-over-year.

Current wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023. Technology and development expenses increased by $5.0 million, or 50%, to $15.2 million for the six months ended June 30, 2024, primarily due to a $3.5 million reduction in capitalized expenditures related to internally-developed software projects launched in early 2024 and a $1.2 million increase in development expense. Technology and development expenses remained constant at 2% of total revenue year-over-year.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023. General and administrative expenses decreased by $6.3 million, or 30%, to $14.7 million for the three months ended March 31, 2024. The decrease in expense when comparing periods was driven primarily by two charges recorded during the first quarter of 2023, a $4.8 million stock-based compensation charge following certain executive departures and a $3.8 million charge related to the negotiated settlement of uncollected premiums in connection with the transition of underwriting a third-party business to other insurers. These decreases in expense period over period were partially offset by increases of $0.7 million in general compensation and other employee-related expenses and a $0.5 million increase in professional services. General and administrative expenses decreased from 8% to 5% of total revenue year-over-year, partially due to certain non-recurring expenses.

Current wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023. General and administrative expenses decreased by $4.2 million, or 12%, to $29.9 million for the six months ended June 30, 2024. The decrease in expense when comparing periods was driven primarily by two charges recorded during the first quarter of 2023, a $4.8 million stock-based compensation charge following certain executive departures and a $3.8 million charge related to the negotiated settlement of uncollected premiums in connection with the transition of underwriting a third-party business to other insurers. These decreases in expense period over period were partially offset by increases of $1.8 million in property and sales taxes and discretionary related expenses, $1.1 million in underwriting fees related to our Canadian business, $1.1 million in professional services, and $0.5 million in general compensation and other employee-related expenses. General and administrative expenses decreased from 6% to 5% of total revenue year-over-year.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023. New pet acquisition expenses decreased by $4.8 million, or 22%, to $16.8 million for the three months ended March 31, 2024. This decrease was primarily due to a decrease in expenses related to generating leads and driving conversion, as we focused on growth in our more efficient channels. New pet acquisition expenses as a percentage of revenue was 6% for the three months ended March 31, 2024 compared to 8% in the same period last year, as we were able to stay disciplined with our discretionary pet acquisition spend, while still managing to grow total enrolled subscription pets, excluding those related to managing general agent policies in continental Europe operations, by 10%.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023. New pet acquisition expenses decreased by $2.9 million, or 14%, to $17.9 million for the three months ended June 30, 2024. The decrease was primarily due to a decrease in expenses related to generating leads and driving conversion, as we focused on growth in our more efficient channels. New pet acquisition as a percentage of revenue was 6% for the three months ended June 30, 2024 compared to 8% in the same period last year, as we were able to stay disciplined with our discretionary pet acquisition spend, while still managing to grow total enrolled subscription pets by 8%.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023. Depreciation and amortization expense increased by $0.6 million, or 18%, to $3.8 million for the three months ended March 31, 2024 primarily driven by an increase in in-service internally developed software projects during the period.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023. Depreciation and amortization expense increased by $1.1 million, or 35%, to $4.4 million for the three months ended June 30, 2024 primarily driven by an increase in in-service internally developed software projects during the period.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023. Total other (income) expense, net increased by $0.3 million to $0.8 million for the three months ended March 31, 2024 primarily due to an increase in interest expense incurred on the Credit Facility partially offset by an increase in interest earned on our investment portfolio.

Current wording

Three months ended June 30, 2024 compared to three months ended June 30, 2023. Total other (income) expense, net decreased by $0.4 million to $0.4 million for the three months ended June 30, 2024 primarily due to an increase in interest income from our investments partially offset by an increase in interest expense.

Previous wording

Three months ended March 31, 2024 compared to three months ended March 31, 2023. Stock-based compensation decreased by $4.2 million, or 34%, to $8.2 million for the three months ended March 31, 2024. The three months ended March 31, 2023 included $4.8 million in stock-based compensation as a result of charges after certain executive departures.

Current wording

Six months ended June 30, 2024 compared to six months ended June 30, 2023. Stock-based compensation decreased by $2.2 million, or 11%, to $16.8 million for the six months ended June 30, 2024. The amount of stock-based compensation recognized largely reflects the timing and vesting of our annual performance grants, calculated according to our equity incentive plan. Additionally, the six months ended June 30, 2023 included $4.8 million in stock-based compensation as a result of charges after certain executive departures.

Previous wording

As of March 31, 2024, the Company had $275.2 million in cash, cash equivalents and short-term investments, of which $237.1 million was held by the Company's insurance entities. Outside of our insurance entities, we held $38.1 million in cash, cash equivalents and short-term investments with an additional $15.0 million available under our Credit Facility. Our insurance entities maintained $256.7 million of capital surplus, which was $103.4 million in excess of the estimated risk-based capital requirement of $153.3 million. The ability to distribute any portion of this estimated $103.4 million excess to our parent company, and the timing of any distribution, may be subject to regulatory limitations.

Current wording

As of June 30, 2024, the Company had $277.2 million in cash, cash equivalents and short-term investments, of which $244.1 million was held by the Company's insurance entities. Outside of our insurance entities, we held $33.2 million in cash, cash equivalents and short-term investments with an additional $15.0 million available under our Credit Facility. Our insurance entities maintained $263.0 million of capital surplus, which was $130.3 million in excess of the estimated risk-based capital requirement of $132.7 million. The ability to distribute any portion of this estimated $130.3 million excess to our parent company, and the timing of any distribution, may be subject to regulatory limitations.

Previous wording

In April 2021, our board of directors approved a share repurchase program, pursuant to which we may, between May 2021 and May 2026, repurchase outstanding shares of our common stock. While our board of directors has approved the program, any repurchase activity is subject to quarterly assessment and board approval, based on various factors including available cash, our stock price relative to our estimated intrinsic value, forecasted operating results, and available opportunities to deploy capital. We repurchased no shares under this program during the three months ended March 31, 2024.

Current wording

In April 2021, our board of directors approved a share repurchase program, pursuant to which we may, between May 2021 and May 2026, repurchase outstanding shares of our common stock. While our board of directors has approved the program, any repurchase activity is subject to quarterly assessment and board approval, based on various factors including available cash, our stock price relative to our estimated intrinsic value, forecasted operating results, and available opportunities to deploy capital. We repurchased no shares under this program during the six months ended June 30, 2024.

Previous wording

Net cash provided by operating activities was $2.4 million for the three months ended March 31, 2024, compared to $6.9 million net cash used in operating activities for the three months ended March 31, 2023. This increase was primarily driven by an increase in premium collection from members as our pricing actions flow through, a decrease in acquisition costs, and timing differences in other working capital activities. Changes in accounts receivable and deferred revenue were primarily related to annual policies with annual payment terms within our other business segment.

Current wording

Net cash provided by operating activities was $9.3 million for the six months ended June 30, 2024, compared to $10.3 million net cash used in operating activities for the six months ended June 30, 2023. This increase was primarily driven by an increase in premium collection from members as our pricing actions flow through and a decrease in acquisition costs offset by timing differences in other working capital activities. Changes in accounts receivable and deferred revenue were primarily related to annual policies with annual payment terms within our other business segment.

Previous wording

Net cash used by investing activities was $2.7 million for the three months ended March 31, 2024, primarily consisting of $3.1 million of capital expenditures mainly related to the development of internal-use software focused on member experience, claims processing and internal policy management improvements. Net cash provided by investing activities was $33.9 million for the three months ended March 31, 2023, primarily consisting of $39.0 million in sales and maturities of investment securities, net of purchases, offset by $5.2 million of capital expenditures mainly related to the development of internal-use software focused on member experience, claims processing and internal policy management improvements.

Current wording

Net cash used in investing activities was $30.5 million for the six months ended June 30, 2024, primarily consisting of purchases of investment securities of $81.2 million as well as $5.9 million of capital expenditures primarily related to the development of internal-use software focused on member experience, claims processing and internal policy management improvements, partially offset by $55.7 million in sales and maturities of investment securities. Net cash provided by investing activities was $28.4 million for the six months ended June 30, 2023, primarily consisting of $117.7 million in sales and maturities of investment securities, offset by $79.9 million of purchases of investments and $9.9 million of capital expenditures.

Previous wording

Net cash used by financing activities was $0.3 million for the three months ended March 31, 2024, primarily consisting of $0.3 million in repayments on the Credit Facility. Net cash provided by financing activities was $33.8 million for the three months ended March 31, 2023, primarily consisting of $35.1 million in proceeds from the Credit Facility, partially offset by $0.9 million in shares withheld to satisfy tax withholdings.

Current wording

Net cash used in financing activities was $1.2 million for the six months ended June 30, 2024, primarily consisting of $0.7 million in repayments on the Credit Facility. Net cash provided by financing activities was $33.7 million for the six months ended June 30, 2023, primarily consisting of $35.1 million in proceeds from the Credit Facility.

Previous wording

As of March 31, 2024, our insurance entities collectively held $108.4 million in cash and cash equivalents, to be used for operating expenses for our insurance entities, $128.7 million in short-term investments and $277.5 million in other current assets. Most of the assets in our insurance entities are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate.

Current wording

As of June 30, 2024, our insurance entities collectively held $91.2 million in cash and cash equivalents, to be used for operating expenses for our insurance entities, $152.8 million in short-term investments and $284.4 million in other current assets. Most of the assets in our insurance entities are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate.

Previous wording

The majority of our investments are held by our insurance entities to satisfy risk-based capital requirements of the National Association of Insurance Commissioners (NAIC). The NAIC requirements provide a method for analyzing the minimum amount of risk-based capital (statutory capital and surplus plus other adjustments) appropriate for an insurance company to support its overall business operations, taking into account the risk characteristics of the company’s assets, liabilities and certain other items. An insurance company found to have insufficient statutory capital based on its risk-based capital ratio may be subject to varying levels of additional regulatory oversight depending on the level of capital inadequacy. APIC must hold certain capital amounts in order to comply with the statutory regulations and, therefore, we cannot use these amounts for general operating purposes without regulatory approval. As our business grows, the amount of capital we are required to maintain to satisfy our risk-based capital requirements will also increase, though risk-based capital requirements also take our overall rate of growth into consideration. Recently, our other business segment growth has slowed and, currently, we expect that to continue, which would reduce capital requirements. APIC was required to maintain at least $120.1 million and $137.6 million of risk-based capital as of March 31, 2024 and December 31, 2023, respectively.

Current wording

The majority of our investments are held by our insurance entities to satisfy risk-based capital requirements of the National Association of Insurance Commissioners ("NAIC"). The NAIC requirements provide a method for analyzing the minimum amount of risk-based capital (statutory capital and surplus plus other adjustments) appropriate for an insurance company to support its overall business operations, taking into account the risk characteristics of the company’s assets, liabilities and certain other items. An insurance company found to have insufficient statutory capital based on its risk-based capital ratio may be subject to varying levels of additional regulatory oversight depending on the level of capital inadequacy. APIC must hold certain capital amounts in order to comply with the statutory regulations and, therefore, we cannot use these amounts for general operating purposes without regulatory approval. As our business grows, the amount of capital we are required to maintain to satisfy our risk-based capital requirements will also increase, though risk-based capital requirements also take our overall rate of growth into consideration. Recently, our other business segment growth has slowed and, currently, we expect that to continue, which would reduce capital requirements. APIC was required to maintain at least $99.0 million and $137.6 million of risk-based capital as of June 30, 2024 and December 31, 2023, respectively. In July 2024, APIC distributed an ordinary dividend of $4.1 million to Trupanion, Inc.

Previous wording

In 2021, we established two new wholly-owned insurance subsidiaries, ZPIC and QPIC, domiciled in Missouri and Nebraska, respectively, and in 2022, we established a new wholly-owned insurance subsidiary, GPIC, domiciled in Canada. We have funded required statutory capital to each of these new subsidiaries. As of March 31, 2024, neither ZPIC, QPIC nor GPIC have begun underwriting any insurance policies, accordingly, each of these entities are currently overcapitalized relative to traditional risk-based capital requirements. We formed these insurance subsidiaries to provide us flexibility as to the insurance entity we use to market and write policies.

Current wording

In 2021, we established two new wholly-owned U.S. insurance subsidiaries, ZPIC and QPIC, domiciled in Missouri and Nebraska, respectively, and in 2022, we established a new wholly-owned insurance subsidiary, GPIC, domiciled in Canada. We have funded required statutory capital to each of these new subsidiaries. As of June 30, 2024, neither ZPIC, QPIC nor GPIC have begun underwriting any insurance policies, accordingly, each of these entities are currently overcapitalized relative to traditional risk-based capital requirements. We formed these insurance subsidiaries to provide us flexibility as to the insurance entity we use to market and write policies.

Previous wording

WICL Segregated Account AX was established by WICL, with Trupanion, Inc. as the shareholder, to enter into a reinsurance agreement with Accelerant Insurance Company of Canada, formerly known as Omega General Insurance Company. All of the assets and liabilities of WICL Segregated Account AX are legally segregated from other assets and liabilities within WICL, and all shares of the segregated account are owned by Trupanion, Inc. In April 2024, our parent company received a dividend of $8.6 million from WICL Segregated Account AX as allowed under our agreements with WICL. As required by the Office of the Superintendent of Financial Institutions regulations related to our reinsurance agreement with Accelerant Insurance Company of Canada, we are required to maintain a Canadian Trust account with the greater of CAD $2.0 million or 120% of unearned Canadian premium plus 20% of outstanding Canadian claims, including all incurred but not reported claims. As of March 31, 2024, the account held CAD $12.0 million.

Current wording

WICL Segregated Account AX was established by WICL, with Trupanion, Inc. as the shareholder, to enter into a reinsurance agreement with Accelerant Insurance Company of Canada, formerly known as Omega General Insurance Company. All of the assets and liabilities of WICL Segregated Account AX are legally segregated from other assets and liabilities within WICL, and all shares of the segregated account are owned by Trupanion, Inc. In April 2024, our parent company received a dividend of $8.6 million from WICL Segregated Account AX as allowed under our agreements with WICL. As required by the Office of the Superintendent of Financial Institutions regulations related to our reinsurance agreement with Accelerant Insurance Company of Canada, we are required to maintain a Canadian Trust account with the greater of CAD $2.0 million or 120% of unearned Canadian premium plus 20% of outstanding Canadian claims, including all incurred but not reported claims. As of June 30, 2024, the account held CAD $17.9 million.