© Reuters. Tropanion (TRUP) rises when the price fill is updated
Trupanion (NASDAQ:) stock rose as much as 16.5% in the pre-market on Friday after the pet insurance provider said California and New York had approved rate increases.
In an after-hours trade update Thursday, Tropanion said the rate in California will rise by more than 12%, on top of the 8% increase in November. On the other hand, New York approved an 18% increase request, on top of a 6% increase late last year.
Today’s rally erased losses from earlier this week when the state of California issued a letter opposing a proposed 28% interest rate increase, and instead proposing an increase of 12.6%.
Trupanion said it now expects pricing action to flow 19.7% through its book by the end of August 2023, and pricing action to flow 21.6% through its book by the end of September 2023.
“We are very pleased with the recent price approvals from two of our largest states, New York and California. These price approvals, which are essential in today’s high cost veterinary care environment, show a huge step forward in realizing our value proposition,” said Margie Toth, President of Trupanion. We have, which we believe is the highest in the industry.
Tropanion also said that the guidance issued in May did not include price hikes. However, the company reiterated its intention to deliver positive free cash flow in the fourth quarter of 2023.
“We view the major interest rate approvals as a net positive for our balance sheet,” Toth concluded.