TRUPANION INC., 10-Q filed on 5/3/2017
Quarterly Report
Document and Entity Information Document
3 Months Ended
Mar. 31, 2017
Apr. 28, 2017
Entity Information [Line Items]
 
 
Entity Registrant Name
TRUPANION INC. 
 
Entity Central Index Key
0001371285 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Mar. 31, 2017 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q1 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
29,760,893 
Condensed Consolidated Statement of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Income Statement [Abstract]
 
 
Revenue
$ 54,729 
$ 42,699 
Claims expenses
39,187 
30,604 
Other cost of revenue
6,387 
4,791 
Gross profit
9,155 
7,304 
Sales and marketing
4,089 
3,840 
Technology Services Costs
2,403 
2,287 
General and administrative
4,012 
3,722 
Total operating expenses
10,504 
9,849 
Operating loss
(1,349)
(2,545)
Interest expense
137 
30 
Other income, net
(28)
(17)
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest
(1,458)
(2,558)
Income tax expense
24 
14 
Net loss
$ (1,482)
$ (2,572)
Net loss per share: Basic and diluted (per share)
$ (0.05)
$ (0.09)
Weighted average shares used to compute net loss per share: Basic and diluted (in shares)
29,254,681 
27,999,248 
Condensed Consolidated Statement of Comprehensive Income Statement (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
 
 
Net loss
$ (1,482)
$ (2,572)
Foreign currency translation adjustments
12 
289 
Change in unrealized (losses) gains on available-for-sale securities
(7)
Other comprehensive income, net of taxes
291 
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
$ (1,477)
$ (2,281)
Condensed Consolidated Balance Sheet (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Assets [Abstract]
 
 
Cash and cash equivalents
$ 21,937 
$ 23,637 
Short-term Investments
30,793 
29,570 
Accounts and other receivables
13,513 
10,118 
Prepaid expenses and other assets
2,243 
2,062 
Total current assets
68,486 
65,387 
Restricted Cash and Cash Equivalents, Noncurrent
600 
600 
Investments in fixed maturities, at fair value
2,656 
2,579 
Equity Method Investments
265 
271 
Property and equipment, net
7,990 
8,464 
Intangible Assets, Net (Excluding Goodwill)
4,946 
4,910 
Other Assets, Noncurrent
2,790 
134 
Total assets
87,733 
82,345 
Liabilities and Equity [Abstract]
 
 
Accounts payable
2,020 
2,006 
Accrued liabilities
3,791 
4,322 
Claims reserve
10,621 
9,521 
Deferred Revenue, Current
17,690 
13,463 
Other payables
1,278 
1,094 
Total current liabilities
35,400 
30,406 
Long-term debt
4,788 
4,767 
Deferred tax liabilities
1,623 
1,623 
Other liabilities
837 
834 
Total liabilities
42,648 
37,630 
Common stock: $0.00001 par value per share
Preferred Stock, Value, Outstanding
Additional paid-in capital
131,421 
129,574 
Accumulated other comprehensive loss
(372)
(377)
Accumulated deficit
(82,763)
(81,281)
Treasury stock, at cost
(3,201)
(3,201)
Stockholders' Equity Attributable to Parent
45,085 
44,715 
Total liabilities and stockholders' equity
$ 87,733 
$ 82,345 
Condensed Consolidated Balance Sheet Condensed Consolidated Balance Sheet Parentheticals (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Held-to-maturity Securities, Fair Value
$ 30,792 
$ 29,570 
Available-for-sale Securities, Amortized Cost Basis
$ 2,671 
$ 2,587 
Common Stock [Member]
 
 
Common Stock, Par or Stated Value Per Share
$ 0.00001 
$ 0.00001 
Common Stock, Shares Authorized
100,000,000 
100,000,000 
Common Stock, Shares, Issued
30,414,926 
30,156,247 
Common Stock, Shares, Outstanding
29,757,626 
29,498,947 
Preferred Stock [Member]
 
 
Preferred Stock, Par or Stated Value Per Share
$ 0.00001 
$ 0.00001 
Preferred Stock, Shares Authorized
10,000,000 
10,000,000 
Preferred Stock, Shares Issued
Preferred Stock, Shares Outstanding
Treasury Stock [Member]
 
 
Treasury Stock, Shares
657,300 
657,300 
Condensed Consolidated Statement of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Net Cash Provided by (Used in) Operating Activities [Abstract]
 
 
Net loss
$ (1,482)
$ (2,572)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract]
 
 
Depreciation, Depletion and Amortization
1,036 
785 
Stock-based compensation expense
781 
696 
Other Operating Income (Expense), Net
97 
Increase (Decrease) in Operating Assets [Abstract]
 
 
Accounts and other receivables
(3,372)
(234)
Prepaid expenses and other assets
(219)
153 
Accounts payable
64 
(200)
Accrued liabilities
(598)
(1,267)
Claims Reserve
1,093 
521 
Deferred revenue
4,218 
676 
Other payables
239 
135 
Net cash provided by (used in) operating activities
1,857 
(1,298)
Net Cash Provided by (Used in) Investing Activities [Abstract]
 
 
Payments to Acquire Held-to-maturity Securities
(5,172)
(3,959)
Proceeds from Sale and Maturity of Held-to-maturity Securities
3,871 
3,700 
Purchases of property and equipment
(462)
(653)
(Payments for) Proceeds from Investments
(2,710)
(34)
Net cash used in investing activities
(4,473)
(946)
Net Cash Provided by (Used in) Financing Activities [Abstract]
 
 
Proceeds from stock option exercises
1,037 
486 
Proceeds from (Repayments of) Debt
(40)
987 
Repayments of Long-term Capital Lease Obligations
(102)
Net cash provided by financing activities
895 
1,473 
Effect of foreign exchange rates on cash, net
21 
341 
Cash, Cash Equivalents, and Restricted Cash, Period Increase (Decrease)
(1,700)
(430)
Cash, Cash Equivalents, and Restricted Cash at beginning of period
24,237 
17,956 
Cash, Cash Equivalents, and Restricted Cash, Carrying Value, End of Period
22,537 
17,526 
Increase in payables for property and equipment
93 
58 
Capital Lease Obligations Incurred
$ 45 
$ 0 
Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations and Summary of Significant Accounting Policies
Description of Business
Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) provides medical insurance plans for cats and dogs throughout the United States, Canada and Puerto Rico.
Basis of Presentation
The consolidated balance sheet data as of December 31, 2016 was derived from audited consolidated financial statements. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on February 15, 2017. The accompanying unaudited consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of its operations, as of and for the periods presented. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or for any other period.
Reclassifications
Certain prior year amounts have been reclassified within the Company’s consolidated financial statements from their original presentation to conform to the current period presentation.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include the valuation of deferred tax assets, stock-based compensation expense, claims reserve, useful lives of software developed for internal use, the valuation of assets evaluated for impairment and income tax uncertainties. Actual results could differ from the estimates used in preparing the consolidated financial statements.
Accumulated Other Comprehensive Loss
There were no reclassifications out of accumulated other comprehensive loss during the three months ended March 31, 2017 and 2016.
Accounting Pronouncements Adopted During Period
In November 2015, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) amending the accounting for income taxes and requiring all deferred tax assets and liabilities be classified as non-current in the consolidated balance sheets. The Company adopted this ASU as of January 1, 2017 and has retrospectively applied all provisions.
In March 2016, the FASB issued an ASU amending the accounting for employee share-based payments, including income tax recognition and classification. The Company adopted this ASU as of January 1, 2017. As a result, the Company has elected to use actual forfeitures in the estimate of stock-based compensation expense. Additionally, the guidance related to the accounting for excess tax benefits and deficiencies resulted in an initial adjustment as of January 1, 2017 to the Company's net operating loss deferred tax asset to eliminate the Company's existing windfall pool amounting to $4.3 million, which was offset by an adjustment to the Company's valuation allowance. Finally, tax withholding of shares will be allowed up to the employee's maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award, subject to the Company's internal policies for making this election.
Recent Accounting Pronouncements
In February 2016, the FASB issued an ASU amending the lease presentation guidance. The ASU requires organizations that lease assets to recognize the rights and obligations created by those leases on the consolidated balance sheets. This ASU is effective for fiscal years beginning after December 15, 2018 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2019. The Company has determined this guidance will require recognition of a lease liability and corresponding asset on the consolidated balance sheets equal to the present value of minimum lease payments. The carrying amount of the asset is derived from the amount of the lease liability at the end of each reporting period.
In August 2016, the FASB issued an ASU which addresses eight specific cash flow issues intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for fiscal periods beginning after December 15, 2017 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2018. The Company is in the process of assessing the impact of this guidance.
Net Loss per Share
Earnings Per Share [Text Block]
Net Loss per Share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period. Excluded from the weighted-average number of shares outstanding are shares that have been issued and are subject to future vesting and unvested restricted stock. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. Potentially dilutive common stock equivalents are comprised of unvested restricted stock, stock options and warrants. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.
The following potentially dilutive equity securities were not included in the diluted net loss per common share calculation because they would have had an antidilutive effect:
 
As of March 31,
 
2017
 
2016
Stock options
3,983,098

 
4,760,535

Restricted stock awards and units
351,702

 
472,384

Warrants
810,000

 
869,999

Investment Securities
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Investment Securities
The amortized cost, gross unrealized holding losses, and fair value of available-for-sale and short-term investments by major security type and class of security were as follows as of March 31, 2017 and December 31, 2016 (in thousands):
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of March 31, 2017
 
 
 
 
 
       Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,671

 
$

 
$
1,671

              Municipal bond
1,000

 
(15
)
 
985

 
$
2,671

 
$
(15
)
 
$
2,656

       Short-term investments:
 
 
 
 
 
              U.S. treasury securities
$
6,186

 
$
(1
)
 
$
6,185

              Certificates of deposit
687

 

 
687

              U.S. government funds
23,920

 

 
23,920

 
$
30,793


$
(1
)

$
30,792

 
 
 
 
 
 
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of December 31, 2016
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,587

 
$

 
$
1,587

Municipal bond
1,000

 
(8
)
 
992

 
$
2,587


$
(8
)

$
2,579

Short-term investments:
 
 
 
 
 
U.S. treasury securities
$
5,791

 
$

 
$
5,791

Certificates of deposit
707

 

 
707

U.S. government funds
23,072

 

 
23,072

 
$
29,570


$


$
29,570


Maturities of debt securities classified as available-for-sale were as follows (in thousands):
 
March 31, 2017
 
Amortized
Cost
 
Fair
Value
Available-for-sale:
 
 
 
Due under one year
$

 
$

Due after one year through five years
1,671

 
1,671

Due after five years through ten years
1,000

 
985

Due after ten years

 

 
$
2,671

 
$
2,656


The Company had one investment with an unrealized loss of less than $0.1 million and a fair value of $1.0 million at March 31, 2017 and December 31, 2016. This investment has been in an unrealized loss position for more than 12 months. The Company assessed the bond for credit impairment and determined that there is no intent to sell this bond, and it is likely that it will hold the investment for a period of time sufficient to allow for recovery. Furthermore, future payments on this bond are insured by a financial guarantee insurer. Therefore, the Company believes that the unrealized loss on this bond constitutes a temporary impairment.
Fair Value
Fair Value Disclosures [Text Block]
Fair Value
The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.
When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
Level 2 inputs: Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis (in thousands):
 
As of March 31, 2017
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Restricted cash
$
600

 
$
600

 
$

 
$

Foreign deposits
1,671

 
1,671

 

 

Municipal bond
985

 

 
985

 

Money market funds
4,497

 
4,497

 

 

Total
$
7,753

 
$
6,768

 
$
985

 
$

 
 
 
 
 
 
 
 
 
As of December 31, 2016
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Restricted cash
$
600

 
$
600

 
$

 
$

Foreign deposits
1,587

 
1,587

 

 

Municipal bond
992

 

 
992

 

Money market funds
7,033

 
7,033

 

 

Total
$
10,212

 
$
9,220

 
$
992

 
$


Long-term investments classified as available-for-sale are measured using quoted market prices when quoted market prices are available. If quoted market prices in active markets for identical assets are not available to determine fair value, then the Company uses quoted prices of similar instruments and other significant inputs derived from observable market data obtained from third-party data providers. Short-term investments are carried at amortized cost and the fair value is disclosed in Note 3. Fair value is determined in the same manner as available-for-sale securities and is considered a Level 1 measurement.
Notes receivable are comprised of secured funds loaned to third parties and are carried at their estimated collectible amounts, plus accrued interest and recorded in other long-term assets on the consolidated balance sheets until 12 months prior to the date they are due. The Company estimates fair value for its notes receivable using a variety of observable and unobservable inputs including, but not limited to, market interest rates and assessed creditworthiness of the third parties. This is a Level 3 measurement. Notes receivable, recorded in other long term assets on the consolidated balance sheets, totaled $2.7 million, for the three months ended March 31, 2017. Based upon this assessment, the carrying amount of notes receivable approximated fair value at March 31, 2017.
The Company estimates fair value for its long-term debt based upon rates currently available to the Company for debt with similar terms and remaining maturities. This is a Level 3 measurement. Based upon the terms of the debt, the carrying amount of long-term debt approximated fair value at March 31, 2017 and December 31, 2016.
The Company’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers between levels for the three months ended March 31, 2017 and 2016.
Debt
Debt Disclosure [Text Block]
Debt
The Company has a revolving line of credit with a bank, which is secured by any and all interest the Company has in assets that are not otherwise restricted. This agreement was most recently amended in March 2017. The revolving line of credit bore a variable interest rate as of March 31, 2017 equal to the greater of 4.5%, or 1.25% plus the prime rate. Interest expense is due monthly on the outstanding principal amount with all amounts outstanding under the revolving line of credit due upon maturity in December 2019. The credit agreement requires the Company to comply with various financial and non-financial covenants. As of March 31, 2017 and December 31, 2016, the Company was in compliance with all covenants. This facility has a requirement that $0.6 million be held as restricted cash with the bank as of March 31, 2017. This facility also has a compensating balance requirement of $0.4 million and an irrevocable standby letter of credit totaling $1.1 million, which reduces the amount available on the line of credit.
As of March 31, 2017 and December 31, 2016, borrowings on the revolving line of credit are limited to the lesser of $30.0 million and the total amount of cash and securities held by the Company's insurance subsidiaries (American Pet Insurance Company and Wyndham Insurance Company (SAC) Limited), less up to $4.5 million and $3.0 million, respectively, for obligations the Company may have outstanding for other ancillary services in the future. As of March 31, 2017 and December 31, 2016, the Company's outstanding borrowings under this facility were $5.0 million. The Company had $20.5 million available under its revolving line of credit as of March 31, 2017.
Commitment and Contingencies
Commitments and Contingencies Disclosure [Text Block]
Commitments and Contingencies
The outcomes of the Company’s legal proceedings are inherently unpredictable, subject to significant uncertainties, and could be material to the Company's operating results and cash flows for a particular period. The Company makes a provision for a liability relating to legal matters when it is both probable that a material liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter.
Stock-based Compensation
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Stock-Based Compensation
The following table presents information regarding stock options granted, exercised and forfeited for the periods presented:
 
Number Of Options
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
 
 
 
 
(in thousands)
December 31, 2016
4,123,023

 
$
5.06

 
$
43,185

Granted
152,199

 
15.82

 
 
Exercised
(257,679
)
 
4.02

 
3,068

Forfeited
(34,445
)
 
8.85

 
 
March 31, 2017
3,983,098

 
5.50

 
35,439

 
 
 
 
 
 
Vested and exercisable at March 31, 2017
2,986,493

 
$
3.29

 
$
32,695

As of March 31, 2017, the stock options outstanding had a weighted-average remaining contractual life of 5.6 years.
Stock-based compensation expense includes stock options and restricted stock awards and units granted to employees and non-employees and has been reported in the Company’s consolidated statements of operations in claims expenses, other cost of revenue, sales and marketing, technology and development, and general and administrative expenses depending on the function performed by the employee or non-employee. The Company measures stock-based compensation expense on a straight-line basis except for restricted stock with a performance condition which is measured on a graded vesting schedule. The remaining 350,631 shares of unvested restricted stock measured on a graded vesting schedule are expected to vest over the remaining service term of approximately 2.5 years.
As of March 31, 2017, the Company had unrecognized stock-based compensation expense of $5.1 million, which is expected to vest over a weighted-average period of approximately 2.4 years. As of March 31, 2017, the Company had 996,605 unvested stock options and 351,702 restricted stock awards and units that are expected to vest. No net tax benefits related to the stock-based compensation costs have been recognized since the Company’s inception. The expense recognized in each category of the Company’s consolidated statements of operations is provided in the table below:
 
Three Months Ended March 31,
 
2017
 
2016
 
(in thousands)
Claims expenses
$
70

 
$
58

Other cost of revenue
43

 
8

Sales and marketing
187

 
82

Technology and development
50

 
55

General and administrative
431

 
493

Total stock-based compensation expense
$
781

 
$
696

Claims Reserve
Supplementary Insurance Information, for Insurance Companies Disclosure [Text Block]
Claims Reserve
The Company provides a reserve for unpaid claims and claims incurred but not reported (IBNR). This liability is primarily based on, but not limited to, patterns of claims being paid, patterns of claims received, seasonality patterns and historical experience. This, combined with the estimated cost of administering claims incurred but not reported makes up the Company's claims reserve. As the Company grows, the claims reserve is expected to increase. Additionally, if expected claims payout completion patterns extend, the claims reserve may further increase. The Company reviews estimates for the claims reserve quarterly. Any necessary adjustments are reflected in earnings.
The Company has two segments: subscription business and other business. The subscription business segment includes monthly subscriptions related to the Company’s medical plan which are marketed directly to consumers, while the other business segment includes all other business that is not directly marketed to consumers.
Claims Reserve
Activity in the subscription business claims reserve is summarized as follows:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(in thousands)
Claims reserve at beginning of year
 
$
8,538

 
$
5,384

Claims incurred during the period related to:
 
 
 
 
Current year
 
36,518

 
28,123

Prior years
 
(195
)
 
387

Total claims incurred
 
36,323

 
28,510

Claims paid during period related to:
 
 
 
 
Current year
 
28,868

 
22,940

Prior years
 
6,400

 
4,913

Total claims paid
 
35,268

 
27,853

Non-cash claims expense
 
93

 
94

Claims reserve at end of period
 
$
9,500

 
$
5,947

The decrease in subscription business claims incurred for prior years for the three months ended March 31, 2017 is primarily due to less claims incurred than was expected relating to prior year claims. The increase in subscription business claims for prior years for the three months ended March 31, 2016 is primarily due to more claims incurred than was expected relating to prior year claims.
Activity in the other business claims reserve is summarized as follows:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(in thousands)
Claims reserve at beginning of year
 
$
983

 
$
890

Claims incurred during the period related to:
 
 
 
 
Current year
 
3,048

 
2,104

Prior years
 
(184
)
 
(10
)
Total claims incurred
 
2,864

 
2,094

Claims paid during period related to:
 
 
 
 
Current year
 
2,092

 
1,357

Prior years
 
634

 
720

Total claims paid
 
2,726

 
2,077

Non-cash claims expense
 

 

Claims reserve at end of period
 
$
1,121

 
$
907


Incurred but not reported claims
The following table summarizes the activity for incurred but not reported claims plus expected development for the Company's subscription business segment (in thousands):
 
As of March 31, 2017
 
Total of IBNR plus expected development on reported claims
Year Incurred
 
 
2015
$
174

2016
1,725

2017
7,557

The following table summarizes the activity for incurred but not reported claims plus expected development for the Company's other business segment (in thousands):
 
As of March 31, 2017
 
Total of IBNR plus expected development on reported claims
Year Incurred
 
 
2015
$
2

2016
162

2017
957

Segments
Segment Reporting Disclosure [Text Block]
Segments
The Company has two segments: subscription business and other business. The subscription business segment includes monthly subscriptions related to the Company’s medical plan which are marketed directly to consumers, while the other business segment includes all other business that is not directly marketed to consumers.
The chief operating decision maker uses two measures to evaluate segment performance: revenue and gross profit. Additionally, other operating expenses, such as sales and marketing expenses, are allocated to each segment and evaluated when material. Interest and other expenses and income taxes are not allocated to the segments, nor included in the measure of segment profit or loss. The Company does not analyze discrete segment balance sheet information related to long-term assets.
Revenue and gross profit of the Company’s segments were as follows (in thousands):
 
Three Months Ended March 31,
 
2017
 
2016
Revenue:
 
 
 
Subscription business
$
50,229

 
$
39,143

Other business
4,500

 
3,556

 
54,729

 
42,699

Claims expenses:
 
 
 
Subscription business
36,323

 
28,510

Other business
2,864

 
2,094

 
39,187

 
30,604

Other cost of revenue:
 
 
 
Subscription business
4,923

 
3,693

Other business
1,464

 
1,098

 
6,387

 
4,791

Gross profit:
 
 
 
Subscription business
8,983

 
6,940

Other business
172


364

 
9,155


7,304

Sales and marketing:
 
 
 
Subscription business
4,041

 
3,802

Other business
48

 
38

 
4,089

 
3,840

Technology and development
2,403

 
2,287

General and administrative
4,012

 
3,722

Operating loss
$
(1,349
)

$
(2,545
)

The following table presents the Company’s revenue by geographic region of the member (in thousands):
 
Three Months Ended March 31,
 
2017
 
2016
United States
$
44,134

 
$
34,477

Canada
10,595

 
8,222

Total revenue
$
54,729

 
$
42,699


Substantially all of the Company’s long-lived assets were located in the United States as of March 31, 2017 and December 31, 2016.
Nature of Operations and Summary of Significant Accounting Policies (Policies)
Description of Business
Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) provides medical insurance plans for cats and dogs throughout the United States, Canada and Puerto Rico.
Basis of Presentation
The consolidated balance sheet data as of December 31, 2016 was derived from audited consolidated financial statements. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on February 15, 2017. The accompanying unaudited consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of its operations, as of and for the periods presented. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, or for any other period.
Reclassifications
Certain prior year amounts have been reclassified within the Company’s consolidated financial statements from their original presentation to conform to the current period presentation.
Use of Estimates
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include the valuation of deferred tax assets, stock-based compensation expense, claims reserve, useful lives of software developed for internal use, the valuation of assets evaluated for impairment and income tax uncertainties. Actual results could differ from the estimates used in preparing the consolidated financial statements.
Accumulated Other Comprehensive Loss
There were no reclassifications out of accumulated other comprehensive loss during the three months ended March 31, 2017 and 2016.
Accounting Pronouncements Adopted During Period
In November 2015, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) amending the accounting for income taxes and requiring all deferred tax assets and liabilities be classified as non-current in the consolidated balance sheets. The Company adopted this ASU as of January 1, 2017 and has retrospectively applied all provisions.
In March 2016, the FASB issued an ASU amending the accounting for employee share-based payments, including income tax recognition and classification. The Company adopted this ASU as of January 1, 2017. As a result, the Company has elected to use actual forfeitures in the estimate of stock-based compensation expense. Additionally, the guidance related to the accounting for excess tax benefits and deficiencies resulted in an initial adjustment as of January 1, 2017 to the Company's net operating loss deferred tax asset to eliminate the Company's existing windfall pool amounting to $4.3 million, which was offset by an adjustment to the Company's valuation allowance. Finally, tax withholding of shares will be allowed up to the employee's maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award, subject to the Company's internal policies for making this election.
Recent Accounting Pronouncements
In February 2016, the FASB issued an ASU amending the lease presentation guidance. The ASU requires organizations that lease assets to recognize the rights and obligations created by those leases on the consolidated balance sheets. This ASU is effective for fiscal years beginning after December 15, 2018 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2019. The Company has determined this guidance will require recognition of a lease liability and corresponding asset on the consolidated balance sheets equal to the present value of minimum lease payments. The carrying amount of the asset is derived from the amount of the lease liability at the end of each reporting period.
In August 2016, the FASB issued an ASU which addresses eight specific cash flow issues intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for fiscal periods beginning after December 15, 2017 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2018. The Company is in the process of assessing the impact of this guidance.
Fair Value Notes Receivable (Policies)
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]
Notes receivable are comprised of secured funds loaned to third parties and are carried at their estimated collectible amounts, plus accrued interest and recorded in other long-term assets on the consolidated balance sheets until 12 months prior to the date they are due. The Company estimates fair value for its notes receivable using a variety of observable and unobservable inputs including, but not limited to, market interest rates and assessed creditworthiness of the third parties.
Net Loss per Share (Tables)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]
The following potentially dilutive equity securities were not included in the diluted net loss per common share calculation because they would have had an antidilutive effect:
 
As of March 31,
 
2017
 
2016
Stock options
3,983,098

 
4,760,535

Restricted stock awards and units
351,702

 
472,384

Warrants
810,000

 
869,999

Investment Securities Available-for-Sale (Tables)
The amortized cost, gross unrealized holding losses, and fair value of available-for-sale and short-term investments by major security type and class of security were as follows as of March 31, 2017 and December 31, 2016 (in thousands):
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of March 31, 2017
 
 
 
 
 
       Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,671

 
$

 
$
1,671

              Municipal bond
1,000

 
(15
)
 
985

 
$
2,671

 
$
(15
)
 
$
2,656

       Short-term investments:
 
 
 
 
 
              U.S. treasury securities
$
6,186

 
$
(1
)
 
$
6,185

              Certificates of deposit
687

 

 
687

              U.S. government funds
23,920

 

 
23,920

 
$
30,793


$
(1
)

$
30,792

 
 
 
 
 
 
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of December 31, 2016
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,587

 
$

 
$
1,587

Municipal bond
1,000

 
(8
)
 
992

 
$
2,587


$
(8
)

$
2,579

Short-term investments:
 
 
 
 
 
U.S. treasury securities
$
5,791

 
$

 
$
5,791

Certificates of deposit
707

 

 
707

U.S. government funds
23,072

 

 
23,072

 
$
29,570


$


$
29,570

Maturities of debt securities classified as available-for-sale were as follows (in thousands):
 
March 31, 2017
 
Amortized
Cost
 
Fair
Value
Available-for-sale:
 
 
 
Due under one year
$

 
$

Due after one year through five years
1,671

 
1,671

Due after five years through ten years
1,000

 
985

Due after ten years

 

 
$
2,671

 
$
2,656

Fair Value (Tables)
Fair value, asset & liabilities measured on recurring basis [Table Text Block]
The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis (in thousands):
 
As of March 31, 2017
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Restricted cash
$
600

 
$
600

 
$

 
$

Foreign deposits
1,671

 
1,671

 

 

Municipal bond
985

 

 
985

 

Money market funds
4,497

 
4,497

 

 

Total
$
7,753

 
$
6,768

 
$
985

 
$

 
 
 
 
 
 
 
 
 
As of December 31, 2016
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Restricted cash
$
600

 
$
600

 
$

 
$

Foreign deposits
1,587

 
1,587

 

 

Municipal bond
992

 

 
992

 

Money market funds
7,033

 
7,033

 

 

Total
$
10,212

 
$
9,220

 
$
992

 
$

Stock-based Compensation (Tables)
The following table presents information regarding stock options granted, exercised and forfeited for the periods presented:
 
Number Of Options
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
 
 
 
 
(in thousands)
December 31, 2016
4,123,023

 
$
5.06

 
$
43,185

Granted
152,199

 
15.82

 
 
Exercised
(257,679
)
 
4.02

 
3,068

Forfeited
(34,445
)
 
8.85

 
 
March 31, 2017
3,983,098

 
5.50

 
35,439

 
 
 
 
 
 
Vested and exercisable at March 31, 2017
2,986,493

 
$
3.29

 
$
32,695

As of March 31, 2017, the stock options outstanding had a weighted-average remaining contractual life of 5.6 years.
The expense recognized in each category of the Company’s consolidated statements of operations is provided in the table below:
 
Three Months Ended March 31,
 
2017
 
2016
 
(in thousands)
Claims expenses
$
70

 
$
58

Other cost of revenue
43

 
8

Sales and marketing
187

 
82

Technology and development
50

 
55

General and administrative
431

 
493

Total stock-based compensation expense
$
781

 
$
696

Claims Reserve (Tables)
Activity in the subscription business claims reserve is summarized as follows:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(in thousands)
Claims reserve at beginning of year
 
$
8,538

 
$
5,384

Claims incurred during the period related to:
 
 
 
 
Current year
 
36,518

 
28,123

Prior years
 
(195
)
 
387

Total claims incurred
 
36,323

 
28,510

Claims paid during period related to:
 
 
 
 
Current year
 
28,868

 
22,940

Prior years
 
6,400

 
4,913

Total claims paid
 
35,268

 
27,853

Non-cash claims expense
 
93

 
94

Claims reserve at end of period
 
$
9,500

 
$
5,947

The decrease in subscription business claims incurred for prior years for the three months ended March 31, 2017 is primarily due to less claims incurred than was expected relating to prior year claims. The increase in subscription business claims for prior years for the three months ended March 31, 2016 is primarily due to more claims incurred than was expected relating to prior year claims.
Activity in the other business claims reserve is summarized as follows:
 
 
Three Months Ended March 31,
 
 
2017
 
2016
 
 
(in thousands)
Claims reserve at beginning of year
 
$
983

 
$
890

Claims incurred during the period related to:
 
 
 
 
Current year
 
3,048

 
2,104

Prior years
 
(184
)
 
(10
)
Total claims incurred
 
2,864

 
2,094

Claims paid during period related to:
 
 
 
 
Current year
 
2,092

 
1,357

Prior years
 
634

 
720

Total claims paid
 
2,726

 
2,077

Non-cash claims expense
 

 

Claims reserve at end of period
 
$
1,121

 
$
907


The following table summarizes the activity for incurred but not reported claims plus expected development for the Company's subscription business segment (in thousands):
 
As of March 31, 2017
 
Total of IBNR plus expected development on reported claims
Year Incurred
 
 
2015
$
174

2016
1,725

2017
7,557

The following table summarizes the activity for incurred but not reported claims plus expected development for the Company's other business segment (in thousands):
 
As of March 31, 2017
 
Total of IBNR plus expected development on reported claims
Year Incurred
 
 
2015
$
2

2016
162

2017
957

Segments (Tables)
Revenue and gross profit of the Company’s segments were as follows (in thousands):
 
Three Months Ended March 31,
 
2017
 
2016
Revenue:
 
 
 
Subscription business
$
50,229

 
$
39,143

Other business
4,500

 
3,556

 
54,729

 
42,699

Claims expenses:
 
 
 
Subscription business
36,323

 
28,510

Other business
2,864

 
2,094

 
39,187

 
30,604

Other cost of revenue:
 
 
 
Subscription business
4,923

 
3,693

Other business
1,464

 
1,098

 
6,387

 
4,791

Gross profit:
 
 
 
Subscription business
8,983

 
6,940

Other business
172


364

 
9,155


7,304

Sales and marketing:
 
 
 
Subscription business
4,041

 
3,802

Other business
48

 
38

 
4,089

 
3,840

Technology and development
2,403

 
2,287

General and administrative
4,012

 
3,722

Operating loss
$
(1,349
)

$
(2,545
)
The following table presents the Company’s revenue by geographic region of the member (in thousands):
 
Three Months Ended March 31,
 
2017
 
2016
United States
$
44,134

 
$
34,477

Canada
10,595

 
8,222

Total revenue
$
54,729

 
$
42,699

Nature of Operations and Summary of Significant Accounting Policies (Details) Narrative (USD $)
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax
$ 0 
$ 0 
 
Accumulated other comprehensive loss: unrealized loss on available for sale securities
100,000 
 
100,000 
Unrealized foreign currency gain (loss)
12,000 
289,000 
 
New Accounting Pronouncement or Change in Accounting Principle, Effect of Adoption, Quantification
$ 4,300,000 
 
 
Net Loss per Share (Details) Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
Mar. 31, 2017
Dec. 31, 2016
Mar. 31, 2017
Equity Option [Member]
Mar. 31, 2016
Equity Option [Member]
Mar. 31, 2017
Restricted Stock Units (RSUs) [Member]
Mar. 31, 2016
Restricted Stock Units (RSUs) [Member]
Mar. 31, 2017
Warrant [Member]
Mar. 31, 2016
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number
3,983,098 
4,123,023 
3,983,098 
4,760,535 
 
 
 
 
Restricted stock, outstanding
 
 
 
 
351,702 
472,384 
 
 
Common shares attributable to dilutive effect of warrants
 
 
 
 
 
 
810,000 
869,999 
Investment Securities (Details) Investment Schedule (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
$ 30,793 
$ 29,570 
Held-to-maturity securities, gross unrealized holding losses
(1)
Held-to-maturity securities, fair value
30,792 
29,570 
Available-for-sale securities, amortized cost
2,671 
2,587 
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax
(15)
(8)
Available-for-sale securities, fair value
2,656 
2,579 
Deposits [Member]
 
 
Investment [Line Items]
 
 
Available-for-sale securities, amortized cost
1,671 
1,587 
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax
Available-for-sale securities, fair value
1,671 
1,587 
Municipal Bonds [Member]
 
 
Investment [Line Items]
 
 
Available-for-sale securities, amortized cost
1,000 
1,000 
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax
(15)
(8)
Available-for-sale securities, fair value
985 
992 
U.S. Treasury securities
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
6,186 
5,791 
Held-to-maturity securities, gross unrealized holding losses
(1)
Held-to-maturity securities, fair value
6,185 
5,791 
Certificates of deposit
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
687 
707 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
687 
707 
US government debt securities
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
23,920 
23,072 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
$ 23,920 
$ 23,072 
Investment Securities (Details) Narrative (USD $)
Mar. 31, 2017
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
 
 
Accumulated other comprehensive loss: unrealized loss on available for sale securities
$ 100,000 
$ 100,000 
Available-for-sale Securities, Debt Maturities, Year Six Through Ten, Fair Value
985,000 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
$ 1,000,000 
$ 1,000,000 
Investment Securities (Details) Held-to-Maturity (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
 
 
Held-to-maturity Securities, Amortized Cost before Other than Temporary Impairment
$ 30,793 
$ 29,570 
Held-to-maturity Securities, Fair Value
$ 30,792 
$ 29,570 
Investment Securities (Details) Available-for-Sale (USD $)
Mar. 31, 2017
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
$ 1,000,000 
$ 1,000,000 
Available-for-sale securities, debt maturities, next twelve months, amortized cost basis
 
Available-for-sale securities, debt maturities, next twelve months, fair value
 
Available-for-sale securities, debt maturities, year two through five, amortized cost basis
1,671,000 
 
Available-for-sale securities, debt maturities, year two through five, fair value
1,671,000 
 
Available-for-sale securities, debt maturities, year six through ten, amortized cost basis
1,000,000 
 
Available-for-sale securities, debt maturities, year six through ten, fair value
985,000 
 
Available-for-sale securities, debt maturities, after ten years, amortized cost basis
 
Available-for-sale securities, debt maturities, after ten years, fair value
 
Available-for-sale securities, amortized cost
2,671,000 
2,587,000 
Available-for-sale securities, debt maturities, fair value
$ 2,656,000 
 
Fair Value (Details) Unobservable (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Restricted Cash and Cash Equivalents, Noncurrent
$ 600 
$ 600 
Marketable Securities, Noncurrent
2,656 
2,579 
Assets, Fair Value Disclosure
7,753 
10,212 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair Value Disclosure
6,768 
9,220 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair Value Disclosure
985 
992 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair Value Disclosure
Cash and Cash Equivalents [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Restricted Cash and Cash Equivalents, Noncurrent
600 
600 
Cash and Cash Equivalents [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Restricted Cash and Cash Equivalents, Noncurrent
600 
600 
Cash and Cash Equivalents [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Restricted Cash and Cash Equivalents, Noncurrent
Cash and Cash Equivalents [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Restricted Cash and Cash Equivalents, Noncurrent
Deposits [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
1,671 
1,587 
Deposits [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
1,671 
1,587 
Deposits [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
Deposits [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
Municipal bond
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
985 
992 
Municipal bond |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
Municipal bond |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
985 
992 
Municipal bond |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
Money Market Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
4,497 
7,033 
Money Market Funds [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
4,497 
7,033 
Money Market Funds [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
Money Market Funds [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
$ 0 
$ 0 
Fair Value (Details) Narrative (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Fair Value Disclosures [Abstract]
 
 
Notes Receivable, Fair Value Disclosure
$ 2.7 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net
$ 0 
$ 0 
Debt (Details) Narrative (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Line of credit facility, interest rate description
greater of 4.5%, or 1.25% plus the prime rate 
 
Restricted Cash and Cash Equivalents
$ 0.6 
 
Compensating balance
0.4 
 
Line of Credit Facility, Maximum Amount Outstanding During Period
30.0 
30.0 
Line of Credit Facility, Ancillary Services
4.5 
3.0 
Line of Credit, Noncurrent
5.0 
 
Letters of Credit Outstanding, Amount
1.1 
 
Line of Credit Facility, Remaining Borrowing Capacity
$ 20.5 
 
Stock-based Compensation (Details) Options Granted, Exercised and Forfeited (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
Stock-based compensation, options, outstanding, number of shares
3,983,098 
4,123,023 
Stock-based compensation, options, granted, number of options
152,199 
 
Stock-based compensation, options, exercised
(257,679)
 
Stock-based compensation, options, forfeited
(34,445)
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number
2,986,493 
 
Stock-based compensation, options, outstanding, weighted-average exercise price
$ 5.50 
$ 5.06 
Stock-based compensation, options, granted, weighted-average exercise price
$ 15.82 
 
Stock-based compensation, options, exercised, weighted-average exercise price
$ 4.02 
 
Stock-based compensation, options, forfeited, weighted-average exercise price
$ 8.85 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price
$ 3.29 
 
Stock-based compensation, options, outstanding, aggregate intrinsic value
$ 35,439 
$ 43,185 
Stock-based compensation, options, exercised, aggregate intrinsic value
3,068 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value
$ 32,695 
 
Stock-based Compensation (Details) Expense Category (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Stock-based Compensation
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
$ 781 
$ 696 
Claims expense
 
 
Stock-based Compensation
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
70 
58 
Other Expense [Member]
 
 
Stock-based Compensation
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
43 
Sales and marketing
 
 
Stock-based Compensation
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
187 
82 
Technology services costs [Member]
 
 
Stock-based Compensation
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
50 
55 
General and administrative
 
 
Stock-based Compensation
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
$ 431 
$ 493 
Stock-based Compensation (Details) Narrative (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 195 Months Ended
Mar. 31, 2017
Mar. 31, 2017
Mar. 31, 2017
Restricted Stock Units (RSUs) [Member]
Mar. 31, 2016
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Remaining contractual life, share-based payments, weighted average
5 years 7 months 0 days 
 
 
 
Unvested Portion of Restricted Stock Grant with IPO Performance Condition
350,631 
350,631 
 
 
Unvested RSUs with IPO Performance Condition, Remaining Vesting Period
2 years 6 months 
 
 
 
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized
$ 5.1 
$ 5.1 
 
 
Share-based compensation arrangement , non-employee, weighted average remaining vesting period
2 years 5 months 0 days 
 
 
 
Share-based compensation arrangement by share-based payment award, options, nonvested, number of shares
996,605 
996,605 
 
 
Restricted stock, outstanding
 
 
351,702 
472,384 
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense
 
$ 0 
 
 
Claims Reserve (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Dec. 31, 2016
Dec. 31, 2015
Subscription business
 
 
 
 
Supplementary Insurance Information, by Segment [Line Items]
 
 
 
 
Claims expense non-cash
$ 93 
$ 94 
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid
35,268 
27,853 
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years
6,400 
4,913 
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year
28,868 
22,940 
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Net
9,500 
5,947 
8,538 
5,384 
Current Year Claims and Claims Adjustment Expense
36,518 
28,123 
 
 
Prior Year Claims and Claims Adjustment Expense
(195)
387 
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims
36,323 
28,510 
 
 
Other business
 
 
 
 
Supplementary Insurance Information, by Segment [Line Items]
 
 
 
 
Claims expense non-cash
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid
2,726 
2,077 
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Prior Years
634 
720 
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid, Current Year
2,092 
1,357 
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Net
1,121 
907 
983 
890 
Current Year Claims and Claims Adjustment Expense
3,048 
2,104 
 
 
Prior Year Claims and Claims Adjustment Expense
(184)
(10)
 
 
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims
2,864 
2,094 
 
 
Short-duration Insurance Contracts, Accident Year 2015 [Member] |
Subscription business
 
 
 
 
Supplementary Insurance Information, by Segment [Line Items]
 
 
 
 
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net
174 
 
 
 
Short-duration Insurance Contracts, Accident Year 2015 [Member] |
Other business
 
 
 
 
Supplementary Insurance Information, by Segment [Line Items]
 
 
 
 
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net
 
 
 
Short-duration Insurance Contracts, Accident Year 2016 [Member] |
Subscription business
 
 
 
 
Supplementary Insurance Information, by Segment [Line Items]
 
 
 
 
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net
1,725 
 
 
 
Short-duration Insurance Contracts, Accident Year 2016 [Member] |
Other business
 
 
 
 
Supplementary Insurance Information, by Segment [Line Items]
 
 
 
 
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net
162 
 
 
 
Short duration insurance contracts accident year 2017 [Member] |
Subscription business
 
 
 
 
Supplementary Insurance Information, by Segment [Line Items]
 
 
 
 
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net
7,557 
 
 
 
Short duration insurance contracts accident year 2017 [Member] |
Other business
 
 
 
 
Supplementary Insurance Information, by Segment [Line Items]
 
 
 
 
Short-duration Insurance Contracts, Incurred but Not Reported (IBNR) Claims Liability, Net
$ 957 
 
 
 
Segments (Details) Business Segment (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Segment Reporting Information [Line Items]
 
 
Revenue
$ 54,729 
$ 42,699 
Claims expenses
39,187 
30,604 
Other cost of revenue
6,387 
4,791 
Gross profit
9,155 
7,304 
Sales and marketing
4,089 
3,840 
Technology Services Costs
2,403 
2,287 
General and administrative
4,012 
3,722 
Operating loss
(1,349)
(2,545)
Subscription business
 
 
Segment Reporting Information [Line Items]
 
 
Revenue
50,229 
39,143 
Claims expenses
36,323 
28,510 
Other cost of revenue
4,923 
3,693 
Gross profit
8,983 
6,940 
Sales and marketing
4,041 
3,802 
Other business
 
 
Segment Reporting Information [Line Items]
 
 
Revenue
4,500 
3,556 
Claims expenses
2,864 
2,094 
Other cost of revenue
1,464 
1,098 
Gross profit
172 
364 
Sales and marketing
$ 48 
$ 38 
Segments (Details) Revenue by Geography (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Segment Reporting Information [Line Items]
 
 
Revenues
$ 54,729 
$ 42,699 
CANADA
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
10,595 
8,222 
UNITED STATES
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
$ 44,134 
$ 34,477