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	2026		2025
Reserve at beginning of year	$	26,364	$	23,084
Veterinary invoice expenses during the period related to:
Current year	383,806		338,923
Prior years	2,411		2,132
Total veterinary invoice expense	386,217		341,055
Amounts paid during the period related to:
Current year	360,156		315,253
Prior years	23,563		21,355
Total paid	383,719		336,608
Non-cash expenses	1,078		1,624
Reserve at end of period	$	27,784	$	25,907

The Company had unfavorable development on veterinary invoice reserves of $2.4 million for the six months ended June 30, 2026, including favorable development of $0.5 million attributable to accident year 2025 and unfavorable development of $2.9 million attributable to accident year 2024 and prior. The favorable development for accident year 2025 was primarily driven by lower than expected frequency of claims. The unfavorable development for accident year 2024 and prior was primarily 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	2026		2025
Reserve at beginning of year	$	29,557	$	28,551
Veterinary invoice expenses during the period related to:
Current year	171,494		167,448
Prior years	3,193		(5,473)
Total veterinary invoice expense	174,687		161,975
Amounts paid during the period related to:
Current year	151,301		143,726
Prior years	29,004		20,184
Total paid	180,305		163,910
Non-cash expenses	1		—
Reserve at end of period	$	23,938	$	26,616

The Company had unfavorable development on veterinary invoice reserves for the other business segment of $3.2 million for the six months ended June 30, 2026, including unfavorable development on veterinary invoice reserves of $2.5 million attributable to accident year 2025 and unfavorable development of $0.7 million attributable to accident year 2024 and prior. The unfavorable development for accident years 2025 and prior was primarily driven by higher than expected frequency of claims.

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.