SEC Filing | Root, Inc.

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root-20220630

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 June 30, 2022

☐ 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)


Delaware						84-2717903
(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 class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, $0.0001 par value per share	ROOT	The 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 August 1, 2022, the number of outstanding shares of the registrant’s Class A common stock, par value $0.0001 per share, was 161.2 million and the number of outstanding shares of the registrant’s Class B common stock, par value $0.0001 per share, was 93.8 million.

TABLE OF CONTENTS


		Page
Special Note Regarding Forward-Looking Statements

	Part I. Financial Information	1
Item 1.	Condensed Consolidated Balance Sheets - Unaudited	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss - Unaudited	2
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity - Unaudited	3
	Condensed Consolidated Statements of Cash Flows - Unaudited	5
	Notes to Condensed Consolidated Financial Statements - Unaudited	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42

	Part II. Other Information	43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	48
Item 6.	Exhibits	49
	Signatures	51

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), net income/(loss), adjusted gross profit/(loss), direct contribution, adjusted EBITDA, 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 and governmental responses thereto on our business and financial condition;

•the impact of supply chain disruptions, increasing inflation, a recession and/or disruptions to properly functioning financial and capital markets and interest rates on our business and financial condition;

•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 raise additional capital;

•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 realize profits, retain customers, contract with additional partners to utilize the product, or achieve other benefits from our embedded insurance offering;

•our ability to expand our distribution channels through additional partnership relationships, digital media and referrals;

•our ability to 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 attract, motivate and retain key personnel, or hire personnel, in a competitive labor market and to offer competitive compensation and benefits;

•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 regulations that currently apply or become applicable to our business;

•our ability to continue to meet Nasdaq listing standards; 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
	June 30,		December 31,
	2022		2021
	(in millions, except par value )
Assets
Investments:
Fixed maturities available-for-sale, at fair value (amortized cost: $124.9 and $129.5 at June 30, 2022 and December 31, 2021, respectively)	$	120.3	$	129.9
Short-term investments (amortized cost: $0.5 and zero at June 30, 2022 and December 31, 2021, respectively)	0.5		—
Other investments	4.4		4.7
Total investments	125.2		134.6
Cash and cash equivalents	885.6		706.0
Restricted cash	1.0		1.0
Premiums receivable, net of allowance of $3.8 and $5.4 at June 30, 2022 and December 31, 2021, respectively	132.2		148.1
Reinsurance recoverable and receivable, net of allowance of $0.1 and $0.2 at June 30, 2022 and December 31, 2021, respectively	158.1		155.0
Prepaid reinsurance premiums	91.8		100.8
Other assets	85.9		73.8
Total assets	$	1,479.8	$	1,319.3
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity
Liabilities:
Loss and loss adjustment expense reserves	$	312.7	$	320.2
Unearned premiums	161.9		180.1
Long-term debt and warrants	292.3		—
Reinsurance premiums payable	124.0		101.6
Accounts payable and accrued expenses	37.7		29.1

Other liabilities	51.2		39.9
Total liabilities	979.8		670.9
Commitments and Contingencies (Note 11)
Redeemable convertible preferred stock, $0.0001 par value, 100.0 shares authorized, 14.1 shares issued and outstanding at June 30, 2022 and December 31, 2021 (liquidation preference of $126.5)	112.0		112.0
Stockholders’ equity:

Class A common stock, $0.0001 par value, 1,000.0 shares authorized, 161.0 and 142.9 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	—		—
Class B common stock, $0.0001 par value, 269.0 shares authorized, 93.8 and 109.9 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	—		—

Additional paid-in capital	1,829.0		1,806.1
Accumulated other comprehensive (loss) income	(4.6)		0.4
Accumulated loss	(1,436.4)		(1,270.1)
Total stockholders’ equity	388.0		536.4
Total liabilities, redeemable convertible preferred stock and stockholders’ equity	$	1,479.8	$	1,319.3

See Notes to Condensed Consolidated Financial Statements - Unaudited


ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - UNAUDITED

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
	(in millions, except per share data)
Revenues:
Net premiums earned	$	74.7	$	81.2	$	153.0	$	140.3
Net investment income	0.7		0.7		1.3		1.6
Net realized (losses) gains on investments	(0.1)		—		1.1		2.4
Fee and other income	5.1		7.9		10.4		14.1
Total revenues	80.4		89.8		165.8		158.4
Operating expenses:
Loss and loss adjustment expenses	95.7		110.2		192.4		170.1
Sales and marketing	25.4		111.7		40.1		180.1
Other insurance (benefit) expense	(7.8)		(1.5)		(6.8)		0.9
Technology and development	17.9		17.5		31.8		31.3
General and administrative	29.9		24.0		59.9		42.4
Total operating expenses	161.1		261.9		317.4		424.8
Operating loss	(80.7)		(172.1)		(151.6)		(266.4)
Interest expense	(9.2)		(6.5)		(14.7)		(11.8)
Loss before income tax expense	(89.9)		(178.6)		(166.3)		(278.2)
Income tax expense	—		—		—		—
Net loss	(89.9)		(178.6)		(166.3)		(278.2)
Other comprehensive loss:
Changes in net unrealized losses on investments	(1.3)		—		(5.0)		(3.5)
Comprehensive loss	$	(91.2)	$	(178.6)	$	(171.3)	$	(281.7)
Loss per common share: basic and diluted (both Class A and B)	$	(0.36)	$	(0.72)	$	(0.66)	$	(1.12)
Weighted-average common shares outstanding: basic and diluted (both Class A and B)	253.0		248.9		252.3		248.0

See Notes to Condensed Consolidated Financial Statements - Unaudited


ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY - UNAUDITED

	Redeemable Convertible Preferred Stock			Class A and Class B Common Stock				Treasury Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Loss		Total Stockholders' Equity
	Shares	Amount		Class A Shares	Class B Shares	Amount		Shares	Amount
				(in millions)
Balance—March 31, 2022	14.1	$	112.0	154.9	99.5	$	—	—	$	—	$	1,818.5	$	(3.3)	$	(1,346.5)	$	468.7
Net loss	—	—		—	—	—		—	—		—		—		(89.9)		(89.9)
Other comprehensive loss	—	—		—	—	—		—	—		—		(1.3)		—		(1.3)
Conversion of Class B to Class A	—	—		5.7	(5.7)	—		—	—		—		—		—		—
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes	—	—		0.4	—	—		—	—		—		—		—		—

Common stock—share-based compensation expense	—	—		—	—	—		—	—		7.4		—		—		7.4
Warrant compensation expense	—	—		—	—	—		—	—		3.5		—		—		3.5
Warrants issuance costs	—	—		—	—	—		—	—		(0.4)		—		—		(0.4)
Balance—June 30, 2022	14.1	$	112.0	161.0	93.8	$	—	—	$	—	$	1,829.0	$	(4.6)	$	(1,436.4)	$	388.0

Balance—January 1, 2022	14.1	$	112.0	142.9	109.9	$	—	—	$	—	$	1,806.1	$	0.4	$	(1,270.1)	$	536.4
Net loss	—	—		—	—	—		—	—		—		—		(166.3)		(166.3)
Other comprehensive loss	—	—		—	—	—		—	—		—		(5.0)		—		(5.0)

Conversion of Class B to Class A	—	—		16.1	(16.1)	—		—	—		—		—		—		—
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes	—	—		2.0	—	—		—	—		0.4		—		—		0.4
Reclassification of early-exercised stock options from liabilities	—	—		—	—	—		—	—		0.1		—		—		0.1
Common stock—share-based compensation expense	—	—		—	—	—		—	—		14.0		—		—		14.0
Warrant compensation expense	—	—		—	—	—		—	—		8.8		—		—		8.8
Warrants issuance costs	—	—		—	—	—		—	—		(1.0)		—		—		(1.0)
Term Loan C warrants issued	—	—		—	—	—		—	—		0.6		—		—		0.6
Balance—June 30, 2022	14.1	$	112.0	161.0	93.8	$	—	—	$	—	$	1,829.0	$	(4.6)	$	(1,436.4)	$	388.0


ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY - UNAUDITED (CONTINUED)

	Redeemable Convertible Preferred Stock			Class A and Class B Common Stock				Treasury Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Loss		Total Stockholders' Equity
	Shares	Amount		Class A Shares	Class B Shares	Amount		Shares	Amount
				(in millions)
Balance—March 31, 2021	—	$	—	86.5	166.4	$	—	4.6	$	(0.8)	$	1,780.6	$	2.1	$	(847.6)	$	934.3
Net loss	—	—		—	—	—		—	—		—		—		(178.6)		(178.6)

Conversion of Class B to Class A	—	—		26.8	(26.8)	—		—	—		—		—		—		—
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes	—	—		1.0	0.1	—		—	—		1.1		—		—		1.1
Reclassification of early-exercised stock options from liabilities	—	—		(0.3)		—		—	—		0.3		—		—		0.3
Common stock—share-based compensation expense	—	—		—	—	—		—	—		4.9		—		—		4.9
Balance—June 30, 2021	—	$	—	114.0	139.7	$	—	4.6	$	(0.8)	$	1,786.9	$	2.1	$	(1,026.2)	$	762.0

Balance—January 1, 2021	—	$	—	59.4	192.2	$	—	4.6	$	(0.8)	$	1,775.6	$	5.6	$	(748.0)	$	1,032.4
Net loss	—	—		—	—	—		—	—		—		—		(278.2)		(278.2)
Other comprehensive loss	—	—		—	—	—		—	—		—		(3.5)		—		(3.5)
Conversion of Class B to Class A	—	—		52.9	(52.9)	—		—	—		—		—		—		—
Common stock—option exercises and restricted stock units vesting, net of shares withheld for employee taxes	—	—		2.0	0.4	—		—	—		3.4		—		—		3.4
Reclassification of early-exercised stock options from liabilities	—	—		(0.3)	—	—		—	—		0.7		—		—		0.7
Common stock—share-based compensation expense	—	—		—	—	—		—	—		7.2		—		—		7.2
Balance—June 30, 2021	—	$	—	114.0	139.7	$	—	4.6	$	(0.8)	$	1,786.9	$	2.1	$	(1,026.2)	$	762.0

See Notes to Condensed Consolidated Financial Statements - Unaudited


ROOT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
	Six Months Ended June 30,
	2022		2021
	(in millions)
Cash flows from operating activities:
Net loss	$	(166.3)	$	(278.2)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	14.0		7.2
Warrant compensation expense	8.8		—
Depreciation and amortization	6.6		7.2
Bad debt expense	8.9		9.4

Payment-in-kind interest expense	—		5.8
Net realized gains on investments	(1.1)		(2.4)

Changes in operating assets and liabilities:
Premiums receivable	7.0		(39.5)
Reinsurance recoverable and receivable	(3.1)		(17.2)
Prepaid reinsurance premiums	9.0		1.3

Other assets	(10.5)		3.3
Losses and loss adjustment expenses reserves	(7.5)		35.3
Unearned premiums	(18.2)		38.7
Reinsurance premiums payable	22.4		(20.5)
Accounts payable and accrued expenses	14.3		23.0
Other liabilities	10.8		0.1
Net cash used in operating activities	(104.9)		(226.5)
Cash flows from investing activities:
Purchases of investments	(9.0)		(6.8)
Proceeds from maturities, call and pay downs of investments	11.6		23.9
Sales of investments	2.2		70.2
Capitalization of internally developed software	(5.3)		(3.2)
Purchases of fixed assets	—		(1.5)
Purchases of indefinite-lived intangible assets and transaction costs	(1.3)		—
Net cash (used in) provided by investing activities	(1.8)		82.6
Cash flows from financing activities:
Proceeds from exercise of stock options and restricted stock units, net of tax proceeds/(withholding)	0.3		4.7


Proceeds from issuance of debt and related warrants, net of issuance costs	286.0		—

Repayments of long-term debt	—		(0.5)

Net cash provided by financing activities	286.3		4.2
Net increase (decrease) in cash, cash equivalents and restricted cash	179.6		(139.7)
Cash, cash equivalents and restricted cash at beginning of period	707.0		1,113.8
Cash, cash equivalents and restricted cash at end of period	$	886.6	$	974.1

See Notes to Condensed Consolidated Financial Statements - Unaudited

ROOT, INC. AND SUBSIDIARIES

NOTES TO 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, 2021 filed with the SEC on February 23, 2022, or the 2021 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, or LAE, allowance for expected credit losses on premium receivables 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 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-related premium relief efforts, including restrictions on the ability to cancel policies for non-payment, requirements to defer insurance premium payments for up to 60 days and restrictions on increasing policy premiums. The COVID-19 pandemic and governmental responses thereto have impacted and may further impact the broader economic environment, including creating or exacerbating supply chain disruptions and inflation and negatively impacting unemployment levels, economic growth, the proper functioning of financial and capital markets and interest rates. As a result of certain factors related to the COVID-19 global pandemic, we continue to file in multiple states to establish rates that more closely follow the evolving loss cost trends. 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.

Cash, Cash Equivalents and Restricted Cash—The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amount in the condensed consolidated statements of cash flows:


	As of
	June 30,		December 31,
	2022		2021
	(dollars in millions)
Cash and cash equivalents	$	885.6	$	706.0
Restricted cash	1.0		1.0
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	886.6	$	707.0

3.INVESTMENTS

The amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities at June 30, 2022 and December 31, 2021 are as follows:


	June 30, 2022
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	23.3	$	—	$	—	$	(0.8)	$	22.5
Municipal securities	20.0		—		—		(0.9)		19.1
Corporate debt securities	48.5		—		—		(1.9)		46.6
Residential mortgage-backed securities	2.7		—		—		(0.2)		2.5
Commercial mortgage backed securities	27.9		—		—		(0.8)		27.1
Other debt obligations	2.5		—		—		—		2.5
Total fixed maturities	124.9		—		—		(4.6)		120.3
Short-term investments	0.5		—		—		—		0.5
Total	$	125.4	$	—	$	—	$	(4.6)	$	120.8

	December 31, 2021
	Amortized Cost		Allowance for Expected Credit Losses		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	23.7	$	—	$	—	$	(0.4)	$	23.3
Municipal securities	20.4		—		0.3		(0.1)		20.6
Corporate debt securities	48.2		—		0.7		(0.2)		48.7
Residential mortgage-backed securities	3.5		—		—		—		3.5
Commercial mortgage backed securities	30.2		—		0.2		(0.1)		30.3
Other debt obligations	3.5		—		—		—		3.5


Total	$	129.5	$	—	$	1.2	$	(0.8)	$	129.9

Management reviewed the available-for-sale securities at each balance sheet date to consider whether it was necessary to recognize a credit loss as of June 30, 2022 and December 31, 2021 related to any of the above securities. We do not intend to sell the investments and it is not more likely than not that we will be required to sell the security before recovery. Management concluded that the available-for-sale securities’ unrealized losses were due to non-credit related factors and, therefore, there was no allowance for credit loss as of June 30, 2022 and December 31, 2021.

Other Investments

As of June 30, 2022 and December 31, 2021, other investments related to our private equity investments were $4.4 million and $4.7 million, respectively. We recognized zero and $1.2 million of realized gains for the three and six months ended June 30, 2022, respectively. We recorded the sale of one of our private equity investments within net realized (losses) gains on investments in our condensed consolidated statements of operations and comprehensive loss. There were no unrealized gains or impairment losses recognized on private equity investments for the three and six months ended June 30, 2022 and 2021.

The following tables reflect the gross unrealized losses and fair value of short-term investments and available-for-sale fixed maturity securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2022 and December 31, 2021:


	June 30, 2022
	Less than 12 Months					12 Months or More				Total
	Fair Value		Unrealized Loss			Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
	(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies	$	6.6	$	(0.2)		$	15.0	$	(0.6)	$	21.6	$	(0.8)
Municipal securities	15.8		(0.7)			2.2		(0.2)		18.0		(0.9)
Corporate debt securities	44.3		(1.7)		<