Financial Data and Key Metrics Changes - In 2024, the company achieved a gross combined ratio of 95 on $1.3 billion of gross premiums written, generating GAAP net income of $31 million and adjusted EBITDA of $112 million, marking significant improvements from 2023 [8] - For Q4 2024, the company reported net income of $22 million, a $46 million improvement year-over-year, with operating income of $35 million and adjusted EBITDA of $43 million, reflecting year-over-year increases of $47 million and $43 million respectively [20][21] - The gross accident period loss ratio for Q4 was 61%, a 2-point improvement year-over-year, while the growth combined ratio was 91%, a 19-point improvement year-over-year [22] Business Line Data and Key Metrics Changes - Policies in force grew by 21% year-over-year to over 414,000, with a gross loss ratio of 59% and a gross combined ratio of 95% [10] - The company ceded approximately 9% of its gross earned premium in Q4, with a minimal difference of 1 point between gross and net loss ratios [22] Market Data and Key Metrics Changes - The company expanded its reach to 76% of the U.S. population with the recent launch in Minnesota and has filings pending in additional states [14] - The partnership channel saw new writings more than doubling in 2024, with Q4 new writings through this channel representing roughly a third of overall new business [12] Company Strategy and Development Direction - The company aims to accelerate growth by expanding its partnerships channel and reinvesting in the business for long-term returns, emphasizing disciplined underwriting and leveraging technology [9][15] - The focus remains on providing a great customer experience and competitive pricing, with a commitment to maintaining a long-term growth strategy [15][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth avenues while acknowledging the need for selective rate decreases in certain geographies [29] - The company is prepared to respond quickly to changes in the macroeconomic landscape, leveraging its technology platform for real-time adjustments [47] Other Important Information - The company has successfully reduced its run rate interest expense by over 50% and made significant strides in diversifying its distribution channels [10][23] - Management highlighted the importance of maintaining a disciplined approach to customer acquisition costs, which leads to accelerated expense recognition [21] Q&A Session Summary Question: Direction of premium per policy in the year ahead - Management expects to see modest rate decreases, which may apply pressure to average premiums, but growth in independent agency and partnership channels may keep per policy premiums relatively flat to modestly increasing [29][30] Question: Modeling session rate on premium going forward - Management indicated that session levels of earned premium are expected to remain consistent with Q4 levels around 9% [33][34] Question: Retention levels on recent cohorts - Management refrained from sharing specific data points but noted improvements in retention and a normalization of churn rates [36] Question: Expected loss ratio trends with rate reductions - Management projects a low-to-mid single-digit loss trend for 2025, with slight increases in the loss ratio expected but nothing material [40] Question: Impact of tariffs on future performance - Management is not currently predicting any impacts from tariffs but is prepared to respond quickly if changes occur [46][47] Question: Ad spend strategy for 2025 - The company is shifting towards more mid-to-upper funnel channels while maintaining a rigorous measurement of returns on marketing investments [51][52] Question: Returns from direct vs. embedded partnership channels - Both channels are operating at target returns, with the embedded channel showing longer retention and higher average premiums [55] Question: Competition dynamics in 2025 - Management expects competition dynamics to remain stable, despite a slight increase in competition observed in Q4 [58]