The reserve for veterinary invoices is an estimate of the future amount the Company will pay for insurance claims that have not been paid prior to the reporting date. The reserve also includes the Company's estimate of related internal processing costs. The reserve estimate involves actuarial projections and is based on management's assessment of facts and circumstances currently known, and assumptions about anticipated claims development patterns. The Company uses generally accepted actuarial methodologies, such as paid loss development methods, in estimating the amount of the reserve for veterinary invoices. The reserve is made for each of the Company's segments, subscription and other business, and is continually refined as the Company receives and pays veterinary invoices. Changes in management's assumptions and estimates may have a relatively large impact on the reserve and associated expense.


	Six Months Ended June 30,
Subscription	2025		2024
Reserve at beginning of year	$	23,084	$	31,549
Veterinary invoices during the period related to:
Current year	338,923		308,158
Prior years	2,132		(323)
Total veterinary invoice expense	341,055		307,835
Amounts paid during the period related to:
Current year	315,253		282,043
Prior years	21,355		27,668
Total paid	336,608		309,711
Non-cash expenses	1,624		1,737
Reserve at end of period	$	25,907	$	27,936

The Company had unfavorable development on veterinary invoice reserves of $2.1 million for the six months ended June 30, 2025, including unfavorable development of $1.0 million attributable to accident year 2024 and unfavorable development of $1.1 million attributable to accident year 2023 and prior. The unfavorable development for accident year 2024 was primarily driven by a slower pattern of claims reported by members than initially anticipated. The unfavorable development for accident year 2023 and prior was driven by higher than expected frequency of claims. Non-cash expenses are primarily comprised of stock-based compensation for employees performing claims processing related duties.


	Six Months Ended June 30,
Other Business	2025		2024
Reserve at beginning of year	$	28,551	$	31,690
Veterinary invoices during the period related to:
Current year	167,448		157,764
Prior years	(5,473)		(928)
Total veterinary invoice expense	161,975		156,836
Amounts paid during the period related to:
Current year	143,726		128,171
Prior years	20,184		27,717
Total paid	163,910		155,888
Non-cash expenses	—		—
Reserve at end of period	$	26,616	$	32,638

The Company had favorable development on veterinary invoice reserves for the other business segment of $5.5 million for the six months ended June 30, 2025, including favorable development on veterinary invoice reserves of $5.3 million attributable to accident year 2024 and favorable development of $0.2 million attributable to accident year 2023 and prior. The favorable development for accident year 2024 was primarily driven by faster reporting patterns of claims than initially anticipated in the fourth quarter of 2024. The favorable development for accident year 2023 and prior was driven by lower frequency and severity than expected.

In the following tables, the reserve for veterinary invoices for each segment is presented as the amount (in thousands) by the year to which the veterinary invoice relates, referred to as the year of occurrence.