Lemonade Inc

Previous wording

On January 8, 2024, we entered into an Amended and Restated Customer Investment Agreement (“Amended Agreement”) where GC will provide up to an additional $140 million of financing for our sales and marketing growth efforts beginning from the Original Commitment End Date through December 31, 2025. All other material terms and conditions from the Agreement remain unchanged. The Amended Agreement contains standard customary representations, warranties and covenants by the parties, and will continue in effect unless terminated by any party pursuant to its terms.

Current wording

On January 8, 2024, we entered into an Amended and Restated Customer Investment Agreement where GC will provide up to an additional $140 million of financing for our sales and marketing growth efforts beginning from the Original Commitment End Date through December 31, 2025. This was further amended and restated in April 2024 and June 2024 to clarify certain provisions with no changes to material terms and conditions (collectively, the "Amended and Restated Agreement"). The Amended and Restated Agreement as of June 2024 contains standard customary representations, warranties and covenants by the parties, and will continue in effect unless terminated by any party pursuant to its terms.

Previous wording

As of March 31, 2024, we had $28.3 million of outstanding borrowings under the Agreement. We incurred interest expense of $0.6 million for the three months ended March 31, 2024, and such interest is included in “General and administrative expense” in the unaudited condensed consolidated statements of operations and comprehensive income.

Current wording

As of June 30, 2024, we had $43.9 million of outstanding borrowings under the Agreement. We incurred interest expense of $1.0 million and $1.5 million for the three and six months ended June 30, 2024, respectively and such interest is included in “General and administrative expense” in the unaudited condensed consolidated statements of operations and comprehensive income.

Previous wording

Effective July 1, 2023 through June 30, 2024, we agreed to the terms of our reinsurance program which includes Whole Account Quota Share Reinsurance Contracts by and among the Company, Lemonade Insurance Company ("LIC"), Metromile Insurance Company and Lemonade Insurance N.V. ("Lemonade Insurance"), and each of Hannover Ruck SE, MAPFRE Re, and Swiss Reinsurance America Corporation (collectively referred to as “Reinsurers”) ("Reinsurance Program"). Under the Reinsurance Program, which covers all products and geographies, the Company transfers, or "cedes," a share of premium to the Reinsurers. In exchange, these Reinsurers pay us a ceding commission on all premiums ceded to the Reinsurers, in addition to funding the corresponding claims, subject to certain limitations, including but not limited to, the exclusion of hurricane losses, and a limit of $5,000,000 per occurrence for non-hurricane catastrophe losses. The overall share of proportional reinsurance under the Reinsurance Program is approximately 55% of premium. The Per Risk Cap across the contracts is $750,000. Additionally, the contracts are subject to loss ratio caps and variable ceding commission levels, which align our interests with those of its Reinsurers.

Current wording

We maintained proportional reinsurance contracts which provided 55% protection on covered risks. We agreed to the terms of our reinsurance program effective July 1, 2023 through June 30, 2024 which includes Whole Account Quota Share Reinsurance Contracts by and among the Company, Lemonade Insurance Company ("LIC"), Metromile Insurance Company ("MIC") and Lemonade Insurance N.V. ("LINV"), and each of Hannover Ruck SE, MAPFRE Re, and Swiss Reinsurance America Corporation (collectively referred to as “Reinsurers”) ("Reinsurance Program"). Under the Reinsurance Program, which covers all products and geographies, the Company transfers, or "cedes," a share of premium to the Reinsurers. In exchange, these Reinsurers pay us a ceding commission on all premiums ceded to the Reinsurers, in addition to funding the corresponding claims, subject to certain limitations, including but not limited to, the exclusion of hurricane losses, and a limit of $5,000,000 per occurrence for non-hurricane catastrophe losses. The overall share of proportional reinsurance under the Reinsurance Program is approximately 55% of premium. The Per Risk Cap across the contracts is $750,000. Additionally, the contracts are subject to loss ratio caps and variable ceding commission levels, which align our interests with those of its Reinsurers. We renewed the Reinsurance Program effective July 1, 2024 and will expire on June 30, 2025, with similar terms to the contracts that expired on June 30, 2024 except for the limit per occurrence for non-hurricane catastrophe losses which increased to $10,000,000.

Previous wording

In addition, LIC and Lemonade Insurance agreed to the terms of a Property Per Risk Excess of Loss Reinsurance Contract with a panel of reinsurance companies (the "PPR Contract"), and LIC agreed to the terms of an Automatic Facultative Property Per Risk Excess of Loss Reinsurance Contract with Arch Re (the "Automatic Facultative PPR Contract"), each effective from July 1, 2023 until June 30, 2024. Under the PPR Contract, claims in excess of $750,000 are 100% ceded up to a maximum recovery of $2.25 million, subject to certain limitations. Under the Automatic Facultative PPR Contract, claims in excess of $3 million are 100% ceded with a potential recovery of at least $10 million, subject to certain limitations.

Current wording

LIC and LINV entered into a Property Per Risk Excess of Loss Reinsurance Contract with a panel of reinsurance companies (the "PPR Contract"), and LIC entered into an Automatic Facultative Property Per Risk Excess of Loss Reinsurance Contract with Arch Re (the "Automatic Facultative PPR Contract"), each effective from July 1, 2023 until June 30, 2024. Under the PPR Contract, claims in excess of $750,000 are 100% ceded up to a maximum recovery of $2,250,000, subject to certain limitations. The PPR Contract was renewed at similar terms effective July 1, 2024 through June 30, 2025. The Automatic Facultative PPR Contract, in which claims in excess of $3,000,000 are 100% ceded with a potential recovery of at least $10,000,000, subject to certain limitations, expired on June 30, 2024 and was not renewed.

Previous wording

Metromile entered into a Quota Share reinsurance agreement effective January 1, 2022 which expired on June 30, 2023. Under the terms of the agreement, the Company ceded 30% of premiums and losses to reinsurers.

Current wording

MIC entered into a Quota Share reinsurance agreement effective January 1, 2022 and expired on June 30, 2023. Under the terms of the agreement, the Company ceded 30% of premiums and losses to reinsurers.

Previous wording

We maintained proportional reinsurance contracts which provided 55% protection on covered risks effective July 1, 2022. In addition, we purchased a reinsurance program to protect us against natural catastrophe risk in the U.S. that exceeds $80,000,000 in losses effective July 1, 2022, and expired on June 30, 2023. Other non-proportional reinsurance contracts were renewed with terms similar to the expiring contracts. The proportional reinsurance and other non-proportional reinsurance contracts expired on June 30, 2023.

Current wording

We also entered into a reinsurance program to protect against catastrophe risk in the U.S. that exceed $80,000,000 in losses effective July 1, 2022 and expired on June 30, 2023.

Previous wording

We also purchased an Excess of Loss ("XOL") Reinsurance Contract through a captive in Bermuda to cover catastrophe risk over the initial $50 million limit for each loss occurrence, and further subject to a limit of $80 million for each loss occurrence and in aggregate, primarily on property and car business underwritten by LIC. This XOL reinsurance contract became effective July 1, 2023 and will expire on June 30, 2024. We are also exposed to some risks from MIC ceded through the Quota Share ("QS") Reinsurance Contract which is retained in a captive subsidiary, Lemonade Re SPC in the Cayman Islands. This QS reinsurance contract became effective July 1, 2023 and shall remain in force for an indefinite period until terminated by either party. Through our captives, we are exposed to the risk of natural catastrophe events and other covered risks under the reinsurance agreements from assumed risks from policies underwritten by both LIC and MIC.

Current wording

We also entered into an Excess of Loss ("XOL") Reinsurance Contract through a captive in Bermuda in which we have a variable interest, primarily to cover catastrophe risk over the initial $50,000,000 limit for each loss occurrence, and further subject to a limit of $80,000,000 for each loss occurrence and in aggregate, primarily on property and car business underwritten by LIC. This XOL reinsurance contract became effective July 1, 2023 and expired on June 30, 2024. We have renewed the XOL reinsurance contract effective July 1, 2024 and will expire on June 30, 2025 at similar terms and is expanded to include risks written by MIC.

Previous wording

Net earned premium increased $16.2 million, or 24%, to $84.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to the earning of increased gross written premium and the impact of change in our reinsurance program to ceded written premium under our Proportional Reinsurance Contracts as discussed above under "Reinsurance".

Current wording

Net earned premium increased $12.8 million, or 17%, to $89.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to the earning of increased gross written premium and the impact of our reinsurance program to ceded written premium under our Proportional Reinsurance Contracts as discussed above under "Reinsurance".

Previous wording

Gross written premium increased $41.6 million, or 25%, to $205.6 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily due to a 13% increase in net added customers year over year driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. In addition, we also saw an 8% increase in premium per customer year over year due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. Assumed premium related to car insurance policies written in Texas through our fronting arrangement with a third party carrier in Texas also contributed to the increase in gross written premium during the period.

Current wording

Gross written premium increased $44.3 million, or 24%, to $226.2 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily due to a 14% increase in net added customers year over year driven by the success of our digital advertising campaigns and partnerships. We also continued to expand our geographic footprint and product offerings. In addition, we also saw an 8% increase in premium per customer year over year due to an increasing prevalence of multiple policies per customer, growth in the overall average policy value, and continued shift in the mix of underlying products toward higher value policies. Assumed premium related to car insurance policies written in Texas through our fronting arrangement with a third party carrier in Texas also contributed to the increase in gross written premium during the period.

Previous wording

Ceded written premium increased $30.4 million, or 37%, to $111.7 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to growth in business across all products and the impact of our reinsurance agreements. Under our current Reinsurance Program which became effective July 1, 2023, our overall share under the proportional reinsurance is approximately 55% of premium, and the contracts are subject to loss ratio caps and variable commission levels. Other non-proportional reinsurance contracts were renewed with terms similar to the expired contracts. See "Reinsurance" above for further information.

Current wording

Ceded written premium increased $30.2 million, or 32%, to $124.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to growth in business across all products and the impact of our reinsurance agreements. Under our proportional reinsurance program, our overall share is approximately 55% of premium and are subject to loss ratio caps and variable commission. Other non-proportional reinsurance contracts were renewed with terms similar to the expired contracts. See "Reinsurance" above for further information.

Previous wording

The table below shows the amount of premium we earned on a gross and net basis. Ceded earned premium as a percentage of gross earned premium slightly decreased to approximately 55% for the three months ended March 31, 2024, as compared to approximately 56% for the three months ended March 31, 2023 primarily due to the change in reinsurance terms under the proportional reinsurance contracts as discussed above.

Current wording

The table below shows the amount of premium we earned on a gross and net basis. Ceded earned premium as a percentage of gross earned premium slightly increased to approximately 55% for the three months ended June 30, 2024, as compared to approximately 53% for the three months ended June 30, 2023 primarily due to the impact of reinsurance terms under the proportional reinsurance contracts as discussed above.

Previous wording

Ceding commission income increased $3.8 million, or 22%, to $21.0 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, due to the increase in ceded earned premium related to the proportional reinsurance contracts with third-party reinsurers during the period.

Current wording

Ceding commission income decreased $1.0 million, or 6%, to $16.5 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, consistent with the increase in ceded earned premium offset by the change in terms of the proportional reinsurance contracts with third-party reinsurers during the period.

Previous wording

Net investment income increased $2.6 million, or 52% to $7.6 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily driven by the diversification of the Company's investment portfolio with higher returns, offset by investment expenses of $0.1 million. We mainly invest in cash, money market funds, U.S. Treasury bills, corporate debt securities, asset-backed securities, notes and other obligations issued or guaranteed by the U.S. Government.

Current wording

Net investment income increased $2.5 million, or 45% to $8.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily driven by the diversification of the Company's investment portfolio with higher returns, offset by investment expenses of $0.1 million. We mainly invest in cash, money market funds, U.S. Treasury bills, corporate debt securities, asset-backed securities, notes and other obligations issued or guaranteed by the U.S. Government.

Previous wording

Commission and other income increased $1.3 million, or 27%, to $6.1 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to growth in premiums placed with third-party insurance companies during the period and sublease income from our New York and San Francisco office space.

Current wording

Commission and other income increased $3.1 million, or 62%, to $8.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to growth in premiums placed with third-party insurance companies during the period, installment fees and sublease income from our New York and San Francisco office space.

Previous wording

Other insurance expense increased $3.7 million, or 27%, to $17.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 consistent with growth in earned premium. Employee-related expense, including stock-based compensation, increased by $1.6 million, or 42%, as compared to the three months ended March 31, 2023. Credit card processing fees increased $0.9 million, or 31%, as compared to the three months ended March 31, 2023 as a result of the increase in customers and associated premium. Professional fees and other services increased $0.6 million, or 13%, as compared to the three months ended March 31, 2023 primarily in support of growth and expansion initiatives. Amortization of deferred acquisition costs, net of ceding commissions increased $0.5 million, or 21% as compared to the three months ended March 31, 2023.

Current wording

Other insurance expense increased $3.8 million, or 25%, to $18.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 consistent with growth in earned premium. Professional fees and other services increased $1.5 million, or 33%, as compared to the three months ended June 30, 2023 primarily in support of growth and expansion initiatives. Credit card processing fees increased $1.2 million, or 38%, as compared to the three months ended June 30, 2023 as a result of the increase in customers and associated premium. Amortization of deferred acquisition costs, net of ceding commissions increased $0.7 million, or 28% as compared to the three months ended June 30, 2023.

Previous wording

Sales and marketing expense increased $2.2 million, or 8%, to $30.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to brand and performance advertising, which is the largest component of our sales and marketing expenses. Expense related to advertising and other customer acquisition channels increased $2.4 million, or 14%, as compared to the three months ended March 31, 2023. Employee-related expense, including stock-based compensation, decreased by $0.9 million, or 10% as compared to the three months ended March 31, 2023.

Current wording

Sales and marketing expense increased $12.0 million, or 48%, to $36.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily due to brand and performance advertising, which is the largest component of our sales and marketing expenses. Expense related to advertising, other customer acquisition channels and partner payments increased $12.2 million, or 90%, as compared to the three months ended June 30, 2023. Compensation expense related to the warrant shares increased $1.0 million, or 167%, as compared to the three months ended June 30, 2023. Employee-related expense, including stock-based compensation, decreased by $1.4 million, or 17% as compared to the three months ended June 30, 2023.

Previous wording

Technology development expense decreased $0.9 million, or 4%, to $20.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Employee-related expense, including stock-based compensation, and net of capitalized costs for the development of internal-use software, decreased $0.9 million, or 5%, as compared to the three months ended March 31, 2023.

Current wording

Technology development expense decreased $2.9 million, or 12%, to $21.2 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Employee-related expense, including stock-based compensation, and net of capitalized costs for the development of internal-use software, decreased $1.7 million, or 9%, as compared to the three months ended June 30, 2023. Hosting and software costs decreased $0.8 million, or 22%, as compared to the three months ended June 30, 2023. Allocated occupancy costs also decreased $0.4 million, or 36%, as compared to the three months ended June 30, 2023.

Previous wording

General and administrative expense decreased $2.9 million, or 9%, to $29.8 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Employee-related expense, including stock-based compensation, decreased $1.3 million, or 9%, as compared to three months ended March 31, 2023. Legal, accounting and other professional fees decreased $1.2 million, or 38%, compared to three months ended March 31, 2023. Corporate insurance expense decreased $1.0 million, or 56% as compared to three months ended March 31, 2023. Bad debt expense increased by $0.9 million or 39%, as compared to three months ended March 31, 2023.

Current wording

General and administrative expense decreased $0.9 million, or 3%, to $29.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Employee-related expense, including stock-based compensation, decreased $1.5 million, or 10%, as compared to three months ended June 30, 2023. Corporate insurance expense decreased $1.0 million, or 56% as compared to three months ended June 30, 2023. Legal, accounting and other professional fees increased $1.2 million, or 80%, compared to three months ended June 30, 2023. Bad debt expense increased by $0.5 million or 31%, as compared to three months ended June 30, 2023.

Previous wording

Income tax expense increased $1.0 million, or 91%, to $2.1 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due to change in uncertain tax position related to transfer pricing methodology.

Current wording

Income tax expense increased $0.8 million, or 62%, to $2.1 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to change in uncertain tax position related to transfer pricing methodology.

Previous wording

Net loss decreased $18.5 million, or 28%, to $47.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due to the factors described above.

Current wording

Net loss decreased $10.0 million, or 15%, to $57.2 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 due to the factors described above.

Previous wording

(1) Includes compensation expense related to warrant shares of $0.9 million for the three months ended March 31, 2024, and none for the three months ended March 31, 2023.

Current wording

(1) Includes compensation expense related to warrant shares of $1.6 million and $2.5 million for the three and six months ended June 30, 2024, respectively, and $0.6 million for both the three and six months ended June 30, 2023.

Previous wording

As of March 31, 2024, we had $278.7 million in cash and cash equivalents, and $641.9 million in investments. From the date we commenced operations, we have generated negative cash flows from operations, and we have financed our operations primarily through private and public sales of equity securities. Our principal sources of funds are insurance premiums, investment income, reinsurance recoveries and proceeds from the maturity and sale of invested assets. These funds are primarily used to pay claims, operating expenses and taxes. In June 2023, we entered into an Agreement with GC, where up to $150 million of financing will be provided for our sales and marketing growth efforts through December 31, 2024. The Agreement was amended in January 2024, pursuant to which an additional financing of $140 million will be provided for our sales and marketing growth efforts through December 31, 2025. As of March 31, 2024, we had $28.3 million of outstanding borrowings under the Agreement with GC. We believe our existing cash and cash equivalents as of March 31, 2024 will be sufficient to meet our working capital, liquidity and capital expenditure needs for at least the next 12 months. This belief is subject, to a certain extent, on general economic, financial, competitive, regulatory and other factors that are beyond our control.

Current wording

As of June 30, 2024, we had $343.2 million in cash and cash equivalents, and $581.2 million in investments. From the date we commenced operations, we have generated negative cash flows from operations, and we have financed our operations primarily through private and public sales of equity securities and third party financing. Our principal sources of funds are insurance premiums, investment income, reinsurance recoveries and proceeds from the maturity and sale of invested assets. These funds are primarily used to pay claims, operating expenses and taxes. In June 2023, we entered into an Agreement with GC, where up to $150 million of financing will be provided for our sales and marketing growth efforts through December 31, 2024. The Agreement was amended and restated in January 2024, pursuant to which an additional financing of $140 million will be provided for our sales and marketing growth efforts through December 31, 2025, and was further amended and restated in April 2024 and June 2024 to clarify certain provisions and all material terms and conditions remain unchanged. As of June 30, 2024, we had $43.9 million of outstanding borrowings under the Amended and Restated Agreement with GC. We believe our existing cash and cash equivalents as of June 30, 2024 will be sufficient to meet our working capital, liquidity and capital expenditure needs for at least the next 12 months. This belief is subject, to a certain extent, on general economic, financial, competitive, regulatory and other factors that are beyond our control.

Previous wording

Our U.S. and Dutch insurance company subsidiaries, and our Dutch insurance holding company, are restricted by statute as to the amount of dividends that they may pay without the prior approval of their respective competent regulatory authorities. As of March 31, 2024, cash and investments held by these companies was $425.7 million of which $185.8 million is held as regulatory surplus.

Current wording

Our U.S. and Dutch insurance company subsidiaries, and our Dutch insurance holding company, are restricted by statute as to the amount of dividends that they may pay without the prior approval of their respective competent regulatory authorities. As of June 30, 2024, cash and investments held by these companies was $470.3 million of which $201.9 million is held as regulatory surplus.

Previous wording

Cash used in operating activities was $29.8 million for the three months ended March 31, 2024, a decrease of $16.6 million from $46.4 million for the three months ended March 31, 2023. This reflected the $18.5 million decrease in our net loss, primarily offset by changes in our operating assets and liabilities. The decrease in cash used in operating activities from the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to claim payments, settlements with our reinsurance partners, and growth and expansion spend of the Company, offset by collection of premiums and recoveries from reinsurance partners.

Current wording

Cash used in operating activities was $41.5 million for the six months ended June 30, 2024, a decrease of $55.2 million from $96.7 million for the six months ended June 30, 2023. This reflected the $28.5 million decrease in our net loss, primarily offset by changes in our operating assets and liabilities. The decrease in cash used in operating activities from the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to claim payments, settlements with our reinsurance partners, and growth and expansion spend of the Company, offset by collection of premiums and recoveries from reinsurance partners.

Previous wording

Cash provided by investing activities was $30.9 million for the three months ended March 31, 2024, primarily due to proceeds from sales and maturities of U.S. government obligations, corporate debt securities, asset-backed securities, short term investments offset by purchases of U.S. government obligations, corporate debt securities, asset-backed securities, short term investments. We also purchased property and equipment during the period.

Current wording

Cash provided by investing activities was $92.2 million for the six months ended June 30, 2024, primarily due to proceeds from sales and maturities of U.S. government obligations, corporate debt securities, asset-backed securities, short term investments offset by purchases of U.S. government obligations, corporate debt securities, asset-backed securities, short term investments. We also purchased property and equipment during the period.

Previous wording

Cash used in investing activities was $15.3 million for the three months ended March 31, 2023, primarily due to proceeds from sales and maturities of U.S. government obligations, corporate debt securities, short term investments offset by purchases of U.S. government obligations, corporate debt securities, short term investments. We also purchased property and equipment during the period.

Current wording

Cash provided by investing activities was $4.4 million for the six months ended June 30, 2023, primarily due to proceeds from sales and maturities of U.S. government obligations, corporate debt securities, short term investments offset by purchases of U.S. government obligations, corporate debt securities, short term investments. We also purchased property and equipment during the period.

Previous wording

Cash provided by financing activities was $13.5 million for the three months ended March 31, 2024, primarily due to borrowings under the financing agreement offset by principal and interest payments. We also had proceeds from stock option exercises during the period.

Current wording

Cash provided by financing activities was $29.1 million for the six months ended June 30, 2024, primarily due to borrowings under the financing agreement offset by principal payments. We also had proceeds from stock option exercises during the period.

Previous wording

Cash provided by financing activities was $0.1 million for the three months ended March 31, 2023, primarily due to proceeds from stock option exercises.

Current wording

Cash provided by financing activities was $0.3 million for the six months ended June 30, 2023, primarily due to proceeds from stock option exercises.

Previous wording

We do not have any current plans for material capital expenditures other than current operating requirements. There have been no material changes as of March 31, 2024 to our contractual obligations from those described in our Annual Report on Form 10-K. To the extent our future operating cash flows are insufficient to cover our net losses from catastrophic events, we had $927.1 million in cash and cash equivalents, and investments available at March 31, 2024. We may also seek to raise additional capital through third-party borrowings, sales of our equity, issuance of debt securities or entrance into new reinsurance arrangements. There can be no assurance that we will be able to raise additional capital on favorable terms or at all.

Current wording

We do not have any current plans for material capital expenditures other than current operating requirements. There have been no material changes as of June 30, 2024 to our contractual obligations from those described in our Annual Report on Form 10-K. To the extent our future operating cash flows are insufficient to cover our net losses from catastrophic events, we had $930.9 million in cash and cash equivalents, and investments available at June 30, 2024. We may also seek to raise additional capital through third-party borrowings, sales of our equity, issuance of debt securities or entrance into new reinsurance arrangements. There can be no assurance that we will be able to raise additional capital on favorable terms or at all.

Previous wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K and the notes to the unaudited interim condensed consolidated financial statements appearing elsewhere in this Quarterly Report. During the three months ended March 31, 2024, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K.

Current wording

Our critical accounting policies are described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K and the notes to the unaudited interim condensed consolidated financial statements appearing elsewhere in this Quarterly Report. During the six months ended June 30, 2024, there were no material changes to our critical accounting policies from those discussed in our Annual Report on Form 10-K.