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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q

(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from____________to____________

Commission File Number: 001-39658
ROOT, INC.
(Exact name of Registrant as specified in its charter)
Delaware84-2717903
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
80 E. Rich Street, Suite 500
Columbus, Ohio
43215
(Address of principal executive offices)(Zip Code)
(866) 980-9431
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock,
$0.0001 par value per share
ROOTThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐Accelerated filer ☐
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
As of November 4, 2021, the number of outstanding shares of the registrant’s Class A common stock, par value $0.0001 per share, was 132.5 million and the number of outstanding shares of the registrant’s Class B common stock, par value $0.0001 per share, was 120.0 million.



TABLE OF CONTENTS
Page



SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:
our ability to retain existing customers, acquire new customers and expand our customer reach;
our expectations regarding our future financial performance, including total revenue, gross profit/(loss), adjusted gross profit/(loss), direct contribution, gross loss ratio, marketing costs, gross loss adjustment expense, or LAE, ratio, quota share levels and expansion of our renewal premium base;
the impact of the COVID-19 pandemic on our business and financial performance;
our goal to be licensed in all states in the United States and the timing of obtaining additional licenses and launching in new states;
the accuracy and efficiency of our telematics and behavioral data, and our ability to gather and leverage additional data;
our ability to materially improve retention rates and our ability to realize benefits from retaining customers;
our ability to underwrite risks accurately and charge profitable rates;
our ability to maintain our business model and improve our capital and marketing efficiency;
our ability to drive improved conversion and decrease the cost of customer acquisition;
our ability to maintain and enhance our brand and reputation;
our ability to effectively manage the growth of our business;
our ability to improve our product offerings, introduce new products and expand into additional insurance lines;
our ability to cross sell our products and attain greater value from each customer;
our lack of operating history and ability to attain profitability;
our ability to compete effectively with existing competitors and new market entrants in our industry;
future performance of the markets in which we operate;
our ability to operate a “capital-light” business and obtain and maintain reinsurance contracts;
our ability to realize economies of scale;
our ability to build an embedded insurance offering;
our ability to expand our distribution channels through additional partnership relationships, digital media and referrals;
our ability to implement the features discussed herein, reduce customer acquisition costs, and realize other expected benefits related to the partnership with Carvana Group, LLC, or Carvana;



our ability to drive a significant long-term competitive advantage through our partnership with Carvana;
our ability to successfully enter into a new term facility with BlackRock Financial Management, Inc., on the anticipated terms or at all;
our ability to deliver a vertically integrated customer experience;
our ability to develop products that utilize our telematics to drive better customer satisfaction and retention;
our ability to protect our intellectual property and any costs associated therewith;
our ability to develop an autonomous claims experience;
our ability to take rate action early and react to changing environments;
our ability to meet risk-based capital requirements;
our ability to realize the benefits anticipated from our Texas county mutual fronting arrangement;
our ability to expand domestically and internationally;
our ability to stay in compliance with laws and regulation that currently apply or become applicable to our business; and
the growth rates of the markets in which we compete.
You should not rely on forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described under the heading “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained herein. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made and we undertake no obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.
Unless the context otherwise indicates, references in this report to the terms “Root,” “the Company,” “we,” “our” and “us” refer to Root, Inc. and its subsidiaries.
We may announce material business and financial information to our investors using our investor relations website (ir.joinroot.com). We therefore encourage investors and others interested in Root to review the information that we make available on our website, in addition to following our filings with the Securities and Exchange Commission, or SEC, webcasts, press releases and conference calls.



Part I.  Financial Information
Item 1.  Financial Statements
ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
As of
September 30,December 31,
20212020
(in millions, except par value )
Assets
Investments:
Fixed maturities available-for sale, at fair value (amortized cost: $129.2 and $215.4 at September 30, 2021 and December 31, 2020, respectively)
$130.8 $221.0 
Short-term investments (amortized cost: zero and $3.0 at September 30, 2021 and December 31, 2020, respectively)
 3.0 
Other investments1.3 0.5 
Total investments 132.1 224.5 
Cash and cash equivalents834.1 1,112.8 
Restricted cash1.0 1.0 
Premiums receivable, net of allowance of $3.3 and $3.5 at September 30, 2021 and December 31, 2020, respectively
175.8 130.1 
Reinsurance recoverable176.4 124.8 
Prepaid reinsurance premiums114.7 112.8 
Other assets90.4 56.3 
Total assets$1,524.5 $1,762.3 
Liabilities and Stockholders’ Equity
Liabilities:
Loss and loss adjustment expense reserves$300.7 $237.2 
Unearned premiums210.9 157.1 
Long-term debt201.7 188.2 
Reinsurance premiums payable89.0 89.1 
Accounts payable and accrued expenses41.5 48.0 
Other liabilities44.7 10.3 
Total liabilities888.5 729.9 
Commitments and Contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.0001 par value, 100.0 shares authorized, zero shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
  
Class A common stock, $0.0001 par value, 1,000.0 shares authorized, 127.0 and 59.4 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
  
Class B common stock, $0.0001 par value, 269.0 shares authorized, 125.5 and 192.2 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
  
Treasury stock, at cost(0.8)(0.8)
Additional paid-in capital1,794.4 1,775.6 
Accumulated other comprehensive income1.6 5.6 
Accumulated loss(1,159.2)(748.0)
Total stockholders’ equity636.0 1,032.4 
Total liabilities and stockholders’ equity$1,524.5 $1,762.3 
See Notes to the Condensed Consolidated Financial Statements - Unaudited
1


ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - UNAUDITED
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
(in millions, except per share data)
Revenues:
Net premiums earned$85.1 $44.9 $225.4 $278.4 
Net investment income1.0 1.1 2.6 4.3 
Net realized gains on investments 0.1 2.4 0.2 
Fee and other income7.7 4.4 21.8 13.0 
Total revenues93.8 50.5 252.2 295.9 
Operating expenses:
Loss and loss adjustment expenses114.4 76.1 284.5 303.3 
Sales and marketing65.4 36.9 245.5 90.1 
Other insurance (benefit) expense(4.5)(26.3)(3.6)0.3 
Technology and development18.0 12.9 49.3 40.2 
General and administrative27.4 16.6 69.8 58.8 
Total operating expenses220.7 116.2 645.5 492.7 
Operating loss(126.9)(65.7)(393.3)(196.8)
Interest expense(6.1)(19.5)(17.9)(32.9)
Loss before income tax expense(133.0)(85.2)(411.2)(229.7)
Income tax expense    
Net loss(133.0)(85.2)(411.2)(229.7)
Other comprehensive income (loss):
Changes in net unrealized gains (losses) on investments(0.5)0.1 (4.0)5.0 
Comprehensive loss$(133.5)$(85.1)$(415.2)$(224.7)
Loss per common share: basic and diluted (both Class A and B)$(0.53)$(2.20)$(1.65)$(5.94)
Weighted-average common shares outstanding: basic and diluted (both Class A and B)250.2 38.8 248.8 38.7 
See Notes to the Condensed Consolidated Financial Statements - Unaudited

2


ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - UNAUDITED
Redeemable Convertible Preferred StockClass A and Class B Common StockTreasury StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated LossTotal Stockholders' Equity (Deficit)
SharesAmountClass A SharesClass B SharesAmountSharesAmount
(in millions)
Balance—June 30, 2021 $ 114.0 139.7 $ 4.6 $(0.8)$1,786.9 $2.1 $(1,026.2)$762.0 
Net loss— — — — — — — — — (133.0)(133.0)
Changes in other comprehensive loss— — — — — — — — (0.5)— (0.5)
Conversion of Class B to Class A— — 13.0 (13.0)— — — — — — — 
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes— — 0.1 — — — — 0.9 — — 0.9 
Reclassification of early-exercised stock options to liabilities — — (0.1)(1.2)— — — (0.9)— — (0.9)
Common stock—share-based compensation expense— — — — — — — 7.5 — — 7.5 
Balance—September 30, 2021 $ 127.0 125.5 $ 4.6 $(0.8)$1,794.4 $1.6 $(1,159.2)$636.0 
Balance—January 1, 2021 $ 59.4 192.2 $ 4.6 $(0.8)$1,775.6 $5.6 $(748.0)$1,032.4 
Net loss— — — — — — — — — (411.2)(411.2)
Changes in other comprehensive loss— — — — — — — — (4.0)— (4.0)
Conversion of Class B to Class A— — 65.9 (65.9)— — — — — — — 
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes— — 2.1 0.4 — — — 4.3 — — 4.3 
Reclassification of early-exercised stock options to liabilities — — (0.4)(1.2)— — — (0.2)— — (0.2)
Common stock—share-based compensation expense— — — — — — — 14.7 — — 14.7 
Balance—September 30, 2021 $ 127.0 125.5 $ 4.6 $(0.8)$1,794.4 $1.6 $(1,159.2)$636.0 







3



ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT) - UNAUDITED (CONTINUED)
Redeemable Convertible Preferred StockClass A and Class B Common StockTreasury StockAdditional Paid-in CapitalAccumulated Other Comprehensive Income (Loss)Accumulated LossTotal Stockholders' Equity (Deficit)
SharesAmountClass A SharesClass B SharesAmountSharesAmount
(in millions)
Balance—June 30, 2020161.8 $560.4  41.4 $ 4.6 $(0.8)$37.6 $5.5 $(529.5)$(487.2)
Net loss— — — — — — — — — (85.2)(85.2)
Changes in other comprehensive income— — — — — — — — 0.1 — 0.1 
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes— — — 1.0 — — — 0.9 — — 0.9 
Reclassification of early-exercised stock options from liabilities — — — 0.1 — — — 0.2 — — 0.2 
Common stock—share-based compensation expense— — — — — — — 0.8 — — 0.8 
Balance—September 30, 2020161.8 $560.4  42.5 $ 4.6 $(0.8)$39.5 $5.6 $(614.7)$(570.4)
Balance—January 1, 2020158.9 $560.4  44.4 $ 4.5 $(0.1)$10.5 $0.6 $(385.0)$(374.0)
Net loss— — — — — — — — — (229.7)(229.7)
Changes in other comprehensive income— — — — — — — — 5.0 — 5.0 
Tender offer and subsequent conversion2.9 — — (2.9)— — — 25.1 — — 25.1 
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes— — — 1.5 — — — 1.2 — — 1.2 
Reclassification of early-exercised stock options from liabilities — — — (0.1)— — — 0.3 — — 0.3 
Common stock—share-based compensation expense— — — — — — — 1.9 — — 1.9 
Settlement of related party loan— — — (0.4)— 0.1 (0.7)0.5 — — (0.2)
Balance—September 30, 2020161.8 $560.4  42.5 $ 4.6 $(0.8)$39.5 $5.6 $(614.7)$(570.4)

See Notes to the Condensed Consolidated Financial Statements - Unaudited


4


ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
Nine Months Ended September 30,
20212020
(in millions)
Cash flows from operating activities:
Net loss$(411.2)$(229.7)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation14.7 1.9 
Tender offer 25.1 
Depreciation and amortization11.0 10.6 
Bad debt expense14.7 16.7 
Warrants fair value adjustment 16.0 
Payment-in-kind interest expense9.3 6.8 
Net realized gains on investments(2.4)(0.2)
Change in fair value of equity securities(0.4) 
Changes in operating assets and liabilities:
Premiums receivable(60.4)(32.4)
Reinsurance recoverable(51.6)(78.8)
Prepaid reinsurance premiums(1.9)(101.7)
Other assets(1.6)(8.1)
Losses and loss adjustment expenses reserves63.5 84.6 
Unearned premiums53.8 19.7 
Reinsurance premiums payable(0.1)140.7 
Accounts payable and accrued expenses(7.1)31.6 
Other liabilities5.4 2.4 
Net cash used in operating activities(364.3)(94.8)
Cash flows from investing activities:
Purchases of investments(10.4)(138.1)
Proceeds from maturities, call and pay downs of investments30.6 31.2 
Sales of investments70.2 9.4 
Capitalization of internally developed software(4.8)(3.9)
Purchases of fixed assets(2.3)(1.7)
Net cash provided by (used in) investing activities83.3 (103.1)
Cash flows from financing activities:
Proceeds from exercise of stock options and restricted stock units, net of tax proceeds/(withholding)3.0 1.4 
Purchase of treasury stock (0.2)
Proceeds from debt and warrants issuance, net of issuance costs 12.1 
Repayments of long-term debt(0.7)(13.2)
Net cash provided by financing activities2.3 0.1 
Net decrease in cash, cash equivalents and restricted cash (278.7)(197.8)
Cash, cash equivalents and restricted cash at beginning of period1,113.8 416.6 
Cash, cash equivalents and restricted cash at end of period$835.1 $218.8 
See Notes to the Condensed Consolidated Financial Statements - Unaudited

5


ROOT, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
1.NATURE OF BUSINESS
Root, Inc. is a holding company which, directly or indirectly, maintains 100% ownership of each of its subsidiaries, including, among others, Root Insurance Company, an Ohio-domiciled insurance company; Root Property & Casualty Insurance Company, a Delaware-domiciled insurance company; and Root Reinsurance Company, Ltd., a Cayman Islands-domiciled reinsurance company together with Root, Inc. “we,” “us” or “our.” We were formed in 2015 and began writing personal auto insurance in July 2016.
We are a technology company operating a primarily direct-to-consumer model with the majority of our personal insurance customers acquired through mobile applications. We offer auto and renters insurance products underwritten by Root Insurance Company and Root Property & Casualty Insurance Company.
2.BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation—In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. All such adjustments are of a normal and recurring nature. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 4, 2021, or the 2020 10-K.
Basis of Consolidation—The unaudited condensed consolidated financial statements include the accounts of Root, Inc. and its subsidiaries, all of which are wholly owned. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. All intercompany accounts and transactions have been eliminated.
Use of Estimates—The preparation of the unaudited condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in our unaudited condensed consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, premium write-offs and valuation allowances for income taxes.
COVID-19—In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. The pandemic and related measures taken to contain the spread of COVID-19, such as government-mandated business closures, orders to “shelter in place” and travel and transportation restrictions, have negatively affected the U.S. and global economies, disrupted global supply chains, and led to unprecedented levels of unemployment. We, and other businesses within the insurance industry, have been impacted by certain individual state bulletins that were issued in 2020 and outlined COVID-19 premium relief efforts, including restrictions on the ability to cancel policies for non-payment, requirements to defer insurance payments for up to 60 days and restrictions on increasing policy premiums. The COVID-19 pandemic has impacted and may further impact the broader economic environment, including negatively impacting unemployment levels, economic growth, the proper functioning of financial and capital markets and interest rates. As the COVID-19 pandemic continues, there is uncertainty around the severity and duration of the pandemic and the pandemic’s potential impact on our business and our financial performance. Accordingly, we cannot predict the impact that it may have on our future results of operations and financial condition.
Reinsurance—In August 2021, we commenced a fronting arrangement with an unaffiliated Texas county mutual insurance company, or the fronting carrier. We route all of our new auto policies and, over time, expect to route certain renewal auto policies, in Texas through the fronting carrier and we assume 100% of the related premium and losses on those policies. The fronting arrangement allows us to have greater rating and underwriting flexibility. Premiums assumed are deferred and earned pro rata over the policy period. Unearned premium is established to cover the unexpired portion of premiums assumed. Commissions paid to the fronting carrier are

6


capitalized as deferred acquisition costs and amortized over the same period in which the related premiums are earned. Assumed premiums and losses are subject to external reinsurance agreements. For additional information on our premiums, reinsurance, and policy acquisition cost accounting policies, please refer to our 2020 10-K.
Recently Adopted Financial Accounting Standards—In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases (Topic 842), or ASU 2016-02. The main provision of ASU 2016-02 requires the recognition of right-of-use lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The guidance also requires disclosures that meet the objective of enabling financial statement users to assess the amount, timing, and uncertainty of related cash flows. We adopted ASU 2016-02 on January 1, 2021.
We elected various practical expedients which include: not applying the amended lease accounting guidance to comparative periods; including the carry forward of our leases without reassessing whether any contracts are leases or contain leases, lease classification and initial direct costs; and excluding leases with a term of 12 months or less from lease liability and right-of-use asset recognition. We did not elect the hindsight practical expedient.
Our lease agreements contain lease components and non-lease components, both of which we have elected to account for as a single lease component for our real estate asset class. Operating lease expense for operating lease right-of-use assets is recognized on a straight-line basis over the lease term, which may include options to extend or terminate the lease when it is reasonably certain to do so and there is a significant economic incentive to exercise that option.
Upon adoption of ASU 2016-02, we recognized an operating lease liability of $16.2 million and corresponding right-of-use asset of $9.9 million, which includes the effect of $6.3 million from reclassifying previously recognized deferred rent and lease exit liabilities as an offset, in accordance with the transition guidance. These lease assets and liabilities are recorded as other assets and other liabilities on the condensed consolidated balance sheets. This transition adjustment was reflected as a non-cash transaction in our condensed consolidated statements of cash flows. The transition did not have a material impact on our results of operations, liquidity or debt covenant compliance under our current debt agreements. For additional information refer to Note 7, “Leases.”
Upcoming Accounting Pronouncements—We currently qualify as an "emerging growth company," or EGC, under the Jumpstart Our Business Startups Act of 2012, whereby we have the option to adopt new or revised accounting guidance within the same time periods as private companies. We have elected this option, but may ultimately determine it is preferable to take advantage of early adoption provisions offered within the applicable guidance. As of June 30, 2021, the market value of our common stock held by non-affiliates exceeded $700 million. Accordingly, we will follow the adoption criteria for public companies beginning December 31, 2021 and reflect such adoption criteria in our Annual Report on Form 10-K for the year ended December 31, 2021.
In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU 2016-13. ASU 2016-13 amends previous guidance on the impairment measurement of financial assets, including reinsurance recoverables, available-for-sale securities, and premium receivables, by requiring an entity to recognize an allowance for expected credit losses as a contra asset, rather than impairment as losses are incurred. The amended guidance is intended to result in more timely recognition of expected credit losses and enhance the accounting and disclosure of credit losses on financial assets. The ASU requires a cumulative-effect change to retained earnings (accumulated loss) in the period of adoption and prospective changes on previously recorded impairments, to the extent applicable. Upon losing EGC status as of December 31, 2021, this ASU becomes effective retroactively to January 1, 2021. We continue to evaluate the impact of this amended guidance but do not expect the adoption to have a material impact on our financial statements.

7


3.INVESTMENTS
The amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities at September 30, 2021 and December 31, 2020 are as follows:

September 30, 2021
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies$22.9 $0.1 $(0.2)$22.8 
Municipal securities20.0 0.5 (0.1)20.4 
Corporate debt securities48.7 1.0 (0.1)49.6 
Residential mortgage-backed securities4.0   4.0 
Commercial mortgage backed securities29.0 0.4  29.4 
Other debt obligations4.6   4.6 
Total$129.2 $2.0 $(0.4)$130.8 
December 31, 2020
Amortized CostGross Unrealized GainsGross Unrealized LossesFair Value
(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies$16.9 $0.1 $ $17.0 
Municipal securities22.6 0.8  23.4 
Corporate debt securities87.5 3.1 (0.1)90.5 
Residential mortgage-backed securities7.8   7.8 
Commercial mortgage backed securities57.1 1.3  58.4 
Other debt obligations23.5 0.4  23.9 
Total fixed maturities215.45.7(0.1)221.0
Short-term investments3.0  3.0
Total$218.4 $5.7 $(0.1)$224.0 
Other Investments
Other investments consist of private equity investments without a readily determinable fair value. We elected to account for these investments at cost minus any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or a similar investment of the same issuer. As of September 30, 2021 and December 31, 2020, other investments were $1.3 million and $0.5 million, respectively. There were no impairments recognized on other investments for the three and nine months ended September 30, 2021 or 2020.

8


The following tables reflect the gross unrealized losses and fair value of bonds, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2021 and December 31, 2020:
September 30, 2021
Less than 12 Months12 Months or MoreTotal
Fair ValueUnrealized
Loss
Fair ValueUnrealized
Loss
Fair ValueUnrealized
Loss
(dollars in millions)
Bonds:
U.S. Treasury securities and agencies$19.6 $(0.2)$ $ $19.6 $(0.2)
Municipal securities5.0 (0.1)  5.0 (0.1)
Corporate debt securities4.9  1.6 (0.1)6.5 (0.1)
Residential mortgage-backed securities1.7  0.7  2.4  
Commercial mortgage-backed securities3.7    3.7  
Total bonds$34.9 $(0.3)$2.3 $(0.1)$37.2 $(0.4)
December 31, 2020
Less than 12 Months12 Months or MoreTotal
Fair ValueUnrealized
Loss
Fair ValueUnrealized
Loss
Fair ValueUnrealized
Loss
(dollars in millions)
Bonds:
U.S. Treasury securities and agencies$15.7 $ $ $ $15.7 $ 
Municipal securities2.3    2.3  
Corporate debt securities2.9 (0.1)