Welcome to the Metromile Incorporated First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Garrett Edson of ICR. Thank you, Garrett. You may begin. Thank you, operator. Good afternoon, and welcome to Metromile's First Quarter 2021 Earnings Call. This afternoon, the company released its financial results for the quarter ending March 31st, 2021. The shareholder letter is available in the Investor Relations section of the company's website at www.metromile.com. I would like to remind everyone that certain statements made in the course of this call are not based on historical information and may constitute forward-looking statements. This call will include statements regarding our ability to grow our business as well as certain projections for the first quarter and full year 2021, and are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. I refer you to the company's filings made with the SEC for a more detailed discussion of the risks and factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. All such forward-looking statements are made as of today, May 17, 2021, and the company undertakes no duty to update any forward-looking statements that may be made during the course of this call. Additionally, certain non-GAAP financial measures will be discussed on this conference call. Our presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through our filings with the SEC at www.sec.gov. Joining me on the call today are Dan Preston, the company's Chief Executive Officer, and Lindsay Alexovich, Metromile's Chief Accounting Officer. With that, I am now going to turn the call over to Dan. Thank you. Good afternoon to everyone. Welcome to our first quarter 2021 earnings call. We appreciate your interest and continued support of Metromile. On today's call, I'll provide a brief overview of our first quarter performance and provide updates on our recent progress and overall growth strategy for 2021 and beyond. Lindsay will follow with additional detail on our first quarter 2021 results. Then we'll open the line for Q&A. We had a solid start to 2021 and our first quarter as a public company. We delivered on our first quarter outlook, increasing policies in force to near 96,000 at the top end of our range, while we generated further year-over-year improvements in our accident quarter loss ratio and contribution margins and came in well within our expected range, further validation of our per mile and behavioral pricing model. Our primary focus on unit economics continues to bear out in our results, which we believe positions us very well for the back half of 2021 when we expect to accelerate our growth trajectory significantly. Since our last call, we have been laying the groundwork to execute on our long-term sustainable growth strategy successfully. First, one of our primary strengths is the team we have built at Metromile over the last decade. This combination of visionary technology and consumer product talent, along with seasoned insurance leaders, allows us to reshape insurance products while delivering consistent underwriting results. Our digital innovation is working to make insurance fairer and more individualized every day, empowering the customer while building a high-margin business. We believe that same technology advantage creates cost structure advantages that return a meaningful profit for every policy sold. We have the right team in place to succeed, and even more so with our two most recent leadership hires, who both start next week. As we announced in April, Regi Vengalil will be joining us as our new Chief Financial Officer. Regi joins Metromile from Egencia, Expedia's corporate travel division, and has been instrumental in heading their finance division and helping lead their corporate development efforts. He'll be leading our finance team and ensuring we continue to press our unit economic advantage and keep a firm hand on our balance sheet and capital allocation priorities. I look forward to having him spend time with you on our upcoming calls. Along with Regi, as we continue to accelerate our growth strategy in the months ahead, we've hired a senior leader who has deep expertise in driving profitable growth, aligning low cost of acquisition channels with profitable segments of growth. As we announced last week, Troy Dye will be our new Senior Vice President of Growth, joining us after having spent 20 years at Capital One, where he was most recently the head of U.S. credit card marketing, engagement, and insights. Troy's extensive experience as a disciplined marketer well-versed in driving profitable growth makes him a particularly ideal fit for us. It's a testament to what we've built over the years and our mission of making insurance fairer and more personalized that we can attract talent like Regi and Troy. We're excited for the path ahead and know they will play a key role in helping us achieve our goals. Along with adding to our strong bench, on our last call I mentioned that we expected to begin offering bundled products by the end of the year, which will allow us to better reach the many drivers who are looking to combine their home and auto insurance. Today, I'm thrilled to announce that Hippo will be our partner in driving this endeavor. We believe that Hippo complements Metromile perfectly. We are both digital-first insurers that are truly customer-centric. Hippo's homeowners insurance offering also utilizes real-time data and technology to make insurance fairer, more accurately priced, and individualized, and our company cultures and values are clearly aligned. Our auto and homeowners bundle will be available to Hippo and Metromile customers by the end of 2021. It will enable them to save up to an additional 15% on each of their Metromile auto and Hippo homeowners policies when bundled and receive the same standard experience that each of our customers have come to expect. We anticipate this will have several positive effects, such as reducing cost of acquisition, increasing retention, and growing overall lifetime value. We look forward to providing more details about our rollout in the months ahead. Lastly, we announced a couple of weeks ago that we plan to become the first insurance company to adopt Bitcoin for insurance premiums and claims payments. It's a logical step in supporting our commitment to giving our customers more control over how they pay and get paid. By giving customers more flexibility, we can advance equitability, fair insurance, and financial resilience. As cryptocurrency becomes more mainstream and a larger part of consumers' assets, we look forward to adopting decentralized finance as part of our digital insurance platform. Beyond the progress made with our team and our insurance offering, we continue to see strong interest in Metromile Enterprise software platform, which provides us with recurring high margin revenue. Last quarter, we announced Toggle, a member of the Farmers Insurance family, had onboarded with Metromile Enterprise. This month they're expanding their deployments to additional lines of business. What's key about Toggle is that this is the first time an insurer is using our technology in a P&C line outside of auto. It's very important to highlight that it demonstrates our technology works across P&C lines and not strictly limited to auto. Enterprise is continuing to resonate with prospects in our pipeline, and we believe we have the potential to deploy Enterprise in additional lines of business, and we expect to provide further news on this front in the quarters ahead. Moving ahead, we're making great strides in anticipation of our accelerated growth initiatives. We've cut unit costs, in some cases dramatically, on new Pulse devices. Beginning with the second quarter, new Pulse devices delivered and installed will cost 26% less than prior models. Further, data costs for these new devices have been reduced by 65%. While we're beginning to recognize these cost savings in the second quarter, we expect it will become more evident in the overall results as growth accelerates in the latter portion of 2021 as we enter new states. As more of the country begins to reopen, employers welcome back workers in new hybrid work models and summer travel plans get underway, our data shows that more drivers are eagerly hitting the roads. In March 2021 alone, our drivers nationwide put on 19% more miles on their vehicles year-over-year and 20% more miles than the prior month. This trend has continued in April. The number of miles driven increased 109% year-over-year as driving surpassed pre-pandemic levels. The quality and nature of these miles has shifted, in many cases, away from commute hours and towards other types of driving, creating a wider diversity of driving patterns. We expect this new dynamic will continue to reemphasize the importance of flexible insurance options, creating more low-mileage drivers, and making our per mile offering more relevant. The Ride Along try before you buy feature on our app continues to see a solid hit rate and is converting prospects into customers at a low cost. We continue to develop partnerships with additional automotive OEMs to fully integrate our offering with their vehicles. We're continuing to scale within our existing footprint and are progressing well to achieve approvals from new states to begin offering insurance in those states in the latter half of 2021. Longer term, we have a more than $160 billion opportunity to reach 143 million drivers in the U.S. As drivers can save 47% a year on average by paying for the mile they actually drive rather than being unfairly grouped with the cost of drivers, we believe our offering will continue to resonate with Americans of all ages and from all walks of life in communities large and small, from urban cores to fast-growing mid-sized cities and suburban and rural areas alike. With 3 billion miles of data to better model driver behavior and price accordingly, we have an enormous head start in underwriting and are well-positioned to sustainably and profitably grow our business and create additional long-term value for our shareholders. I'm proud of our entire team and all of their efforts. With that, I'll now turn it over to our Chief Accounting Officer, Lindsay Alexovich. Lindsay? Thank you, Dan. Good afternoon, everyone. Let me take you through some of our first quarter 2021 results. In the first quarter, we generated direct earned premium of $25.8 million, a 4% increase from the prior year period. At the end of the quarter, we had 95,958 policies in force, a 4% increase from the end of 2020. We want to reiterate that fluctuations in driving patterns can cause the total premium to vary in any given period. Our premium run rate, which we define as ending policies in force multiplied by average annual premium per policy as of March 31st, 2021, was $106 million. Average annual premium per policy was $1,100 at the end of the first quarter of 2021. Our one-year retention, or the percentage of customers who remained with us after two policy terms as of March 31st, 2021, was 69.9%. This figure remains slightly elevated from what we would expect going forward, as some cancellations resulting from non-payment were not processed due to government-mandated COVID-19 payment extensions. We expect the one-year retention figure to revert to normalized levels in the second quarter as these cancellations are processed. Please note that while these cancellations will have an impact on our policies in force at the end of the second quarter, we had anticipated this impact in our outlook for end of year 2021 policies in force. The average policy life expectancy for a new customer as of March 31st, 2021, remains steady at 3.4 years. Accident quarter losses in the first quarter of 2021 were $16.8 million, leading to an accident quarter loss ratio of 65.1%, a 500 basis point improvement compared to the prior year period, primarily due to better pricing, enhanced fraud detection, and a reduction in miles driven year-over-year during 2021. Accident quarter loss adjustment expense for LAE was $3.0 million, leading to an accident quarter LAE ratio of 11.5% compared to 10.3% in the first quarter of 2020. Servicing expenses in the first quarter of 2021 were $4.1 million or 16.8% of direct earned premium compared to $3.6 million or 14.7% of direct earned premium in the prior year period. Moving forward, we expect to see servicing expenses return to more normalized levels beginning in the second quarter as we begin to see the benefits of lower data costs from the in-house devices and also expect to see a reduction in bad debt expenses. Accident quarter contribution profit in the first quarter of 2021 was $2.4 million, an increase from $1.6 million in the prior year period, and accident quarter contribution margin was 9.1%, a 270 basis point improvement from the first quarter of 2020. The improvement in margin was driven by the reduced losses compared to the prior year period. We believe accident quarter contribution margin is the best representation of profitability of our in-force portfolio, and thus is the measure we use to estimate lifetime value of our customer. In the first quarter of 2021, we had an additional $4.3 million of unfavorable prior period loss development. This was due to an increase in attorney-represented claims on soft tissue injuries. We continue to focus on the early closure of injury cases to mitigate these exposures. As a reminder, our actuaries estimate the total number of claims in an accident quarter along with the ultimate value of the claims. The reserve is the estimated value of the claims, net of payments we've already made. Each quarter, our reserves are reassessed for all periods back to when we first purchased the carrier in 2016. We continue to aim to be adequately reserved to prevent prior period development. However, given the limited history of the carrier, the multi-year nature of some claim types, and the nature of reserving estimates, there will be adjustments from time to time as we mature and gather more data. When including prior period development, calendar quarter contribution loss was $1.9 million compared to contribution profit of $1.7 million in the prior year period. At our Metromile Enterprise segment, we generated revenue of $1.0 million, an increase from $0.6 million in the prior year period. We ended the first quarter of 2021 with $4.2 million of booked annual recurring revenue, which is our primary KPI for the segment, given the durable nature of the revenue. Cash and cash equivalents at the end of the first quarter of 2021 were $221.5 million compared to $19.2 million at year-end 2020 as we received net proceeds from the closing of the business combination in February 2021 and repaid all outstanding debt by the end of the quarter. I'll now turn the call back to Dan. Thanks, Lindsay. Based on our first quarter performance, we are reaffirming our outlook for the full year 2021. We continue to project ending the year between 125,000 and 133,000 policies in force, which entails year-over-year policy in force growth of 35% on the low end and 44% on the high end. As a reminder, we accelerated our marketing spend in November 2020 in anticipation of ramping up our growth in 2021 and beyond. As a result, we would expect our policies in force sequential growth trajectory to steadily increase throughout the year as marketing channels mature and as we enter new markets, with the majority of our growth to be weighted in the latter part of 2021. In an effort to provide more transparency, we are initiating our outlook for the end of 2021 premium run rate to be between $143 million and $176 million. Our end-of-year assumptions are based on the following. At the bottom end of the range, we are assuming driving continues at Q1 2021 levels for the remainder of the year. At the top end of the range, we're assuming that driving returns to pre-pandemic levels that we observed in 2019. As a reminder, while driving patterns and total miles driven are unpredictable, because our model is priced on a per mile basis, we would expect to continue to generate profitable unit economics as we fairly and accurately bill our customers for the coverage requested. We also continue to expect accident year loss ratio for the full year 2021 to be between 65%-70% and to record accident year contribution margin between 8.5%-13.5%. We thank you for your time and interest today, and now we'll open it up to your questions. Operator? Thank you. We'll now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from Arvind Ramani with Piper Sandler. Please proceed with your question. Hi. Good afternoon. I just have a couple of questions regarding your partnership with Hippo. If you can kind of just expand a little bit more on the rationale for partnering with Hippo instead of continuing to expand geographically. Also if there's any details you can share in terms of how you want to split revenues and cost, and what are some of the milestones you have in place to determine success of this partnership? For sure. Hey, Arvind. Thanks. The starting point here is on your question on data expansion relative to homeowners. Those two tracks of work do not necessarily conflict. There's different teams internally that are working on that. Fortunately, we don't necessarily sacrifice any of the state expansion to be able to offer the homeowners product here. The way that we've structured it is that both partners here, both us and Hippo, will be cross-selling each other's products as part of the experience. As you come to metromile.com or in the app, you get a quote with us. We'll be able to offer you a bundle with both our product and Hippo's. What that will mean to consumers, they can save up to an additional 15% with both products. Then there's basically a commission structure between both companies, where each of us will earn a percentage of that premium based on selling those policies alongside our own product. That kind of arrangement ultimately allows us to build a business together. Great. I guess one of the things you and I have always talked about is you've always taken a lot of pride in the customer experience for Metromile customers. Given that Hippo is an insurtech, how are you going to make sure that going forward year two, year three, the kind of the customer experience that your customers expect to get from Metromile is also something that they get from Hippo? Absolutely. Yeah. That was actually at the center of our decision to work with Hippo. Fortunately, because both our platform and theirs are highly digitized and we have the ability to integrate with pretty simple APIs, it allows us to be pretty flexible with the experience. What we're going to be doing is actually building this into the quote flow experience in a very seamless way, and then ultimately, as part of your ongoing customer experience as well, ideally within the Metromile app otherwise, being able to manage your policy and take the actions that you would as though it were one experience with Metromile. To your point, that's been at the core of what we've been looking for in a homeowners partner. We actually found that in Hippo and think we have a lot of alignment and frankly, technical capabilities to be able to make that a seamless experience. Great. Just last question for me is this kind of like an exclusive agreement and if you or Hippo decide to part ways, what's the out clause? Yeah. I don't want to say too much about all the details of the contract, but what I'll say is that I think each of us look at the market in a bit of a diverse way in that not all products fit all customers. For instance, we're not going to be attracted to high mileage drivers, and that's on purpose. Similarly, if Hippo doesn't offer a product for certain segments, we may want to ultimately sell other products there in the long term. I think there's a clear alignment of the two products in the market, and we're focused on that one as a starting point. As both companies scale, I expect that our customers will have a diversity of needs, and I'm sure that will expand for both of us over time. I think that's a day two question. Great. Thank you very much. Absolutely. Thank you. Our next question comes from Josh Siegler with Cantor Fitzgerald. Please proceed with your question. Hi, guys. Thanks for taking my question. Congratulations on the deal with Hippo. Can you elaborate a little more on how you plan to proactively market bundled insurance to existing and new customers? Yeah, absolutely. The starting point will be with our current direct online channels. As people come through the funnel, the thing that we ultimately have found is that there is a large group of customers who look to bundle both homeowners and auto. I think it's something like 50% of consumers, actually. What this means is that there are a bunch of segments within different marketing channels that today are probably higher cost to acquisition than they will be when we start being able to offer the bundle. I think this just opens up opportunities to better segment and do better work within existing channels. Certainly, we both benefit from each other's marketing in the process, right? As we are selling more Metromile insurance, hopefully we'll be helping Hippo grow. Similarly, as they're growing their business will be a good option for many of their customers as well. It does open up new growth opportunities in both indirect and direct ways. Yeah, that makes sense. Shifting gears a little bit, as auto sales have rebounded, have you seen a larger inflow of customers from your OEM channels? It's a good question. We've certainly seen that used cars have accelerated. I think you've seen this generally with some of the inflation numbers and other things. There isn't a distinct difference from what we can tell in new cars in those channels right now. We're certainly seeing generally strong demand for the product overall, and it hasn't shifted much even as people have started to return back to the roads. We're still seeing solid response rates in general. Got it. What impact, if any, did the government stimulus have on your business? Do you think there was anything that got pulled forward? Interesting. It's hard for us to say that there was a direct correlation there. Most of the response that we've seen throughout the year were directly related to different campaigns we were doing. I don't think we saw a particular noticeable impact from the stimulus on either growth or retention directly. Got it. Great. If I could just sneak one more in. Can you help us quantify what the impact to Q2 retention will be from the payment extensions? Yeah. you can think of this as being mostly impactful for half of the quarter. If you think of nearly all of those cancels happening effectively from the beginning of Q2 to today. During that period, you have a pretty muted growth rate, and then it accelerates from here to the end of the quarter. Perfect. Thank you so much, guys. Yeah. Thanks, Josh. Thank you. Our next question comes from Jed Kelly with Oppenheimer. Please proceed with your question. Hey, great. Thanks for taking my questions. Just on the back or the run rate at the end of the year, can you disclose how much is going to come from current states versus new states, and in terms of your state rollout plan, where are you with the regulators versus, say, six months ago? Yeah. In terms of filings themselves, we've been doing a fair amount of work in ensuring, in the first 13 states which are anticipated this year, all of our baseline certificate of authority and other areas are set up. I think we're in good position there. We're also in the process of finalizing all the filings too, which will go out shortly. Those will start to represent the first states that will go live this year. Making good progress there. Sorry, remind me of the first part of your question. Just where the first part was, how much is coming from the growth at the end of the year in the fourth quarter, how much is going to come from current states you're operating in versus new states? Yeah. Hard to provide a specific number right now, but it should contribute pretty meaningfully to overall growth there. If you just think of the increase in TAM overall, it's going to increase TAM by the end of the year by about 60%, I believe. That will represent a pretty meaningful increase in total policies sold into those new markets. We also have, for instance, long waiting lists of people who have come to get quotes who've left their email and address, and in those cases, we expect to see a fair amount of demand just day one when we first launch those markets. Then, I might have missed this, but with the agreement with Hippo, is that exclusive? If not, would you use other tech-enabled insurance companies like yourself, like Hippo, to drive more customer acquisition? Just how do you see your customer acquisition strategy evolving? You look at some of the sell-side notes or sell-side estimates of your competitors, it looks like they're going to be spending a lot over the next 2-3 years. Can you just remind us how you're approaching customer acquisition over the next 18 months? Yeah, absolutely. To your question on exclusivity, we don't have exclusivity today with Hippo. As we go into new markets, we're going to make sure that we have the right product set up for all of our customers. We think that Hippo is a great partner and will be a core part of that. Customer acquisition, generally, we market through a lot of the online direct channels as a primary source of traffic for the business. In addition to that, we've been seeing some strong growth with our Ride Along, which is, in many ways, an augmentation to the existing online channels. In many ways, a way for customers to share with others, and we see growth from that channel as well. I do think that just speaking to the earlier comment, I think that as we're able to offer homeowners alongside it allows us to better convert traffic that we're going to be able to acquire at a lower cost now that we have both products together. It also opens up opportunities, of course, for us to be able to sell our product alongside Hippo's as well. Just on the prior period adjustment, is that from a couple of years ago when you guys were first starting or how much of that is a result from years ago or how should we view prior period adjustments going forward as your algorithm gets better? Yeah. Prior period development largely reflects all of the history from 2016 through to today. There's a fair amount of impact there. These are about 85% of that increase is related to large loss bodily injury claims. Primarily what we're seeing there is some aspect of, I think what's called social inflation, and this is primarily a higher level of attorney-represented claims with more soft tissue issues. These are out of a handful of claims in Q1, so there are 30 large losses in Q1. A portion of those is largely what drove the reserve changes. This is largely going to be a function of scale. As we grow the business over time, those few large losses will have more minimal impact over time and just make it more predictable over time. Thank you. Thank you. There are no further questions at this time. I would like to turn the floor back over to Dan Preston for any closing comments. Great. Thank you very much. We appreciate all your questions and time on the earnings call today. Look forward to staying in touch and talking again soon. Take care. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful evening.