2. 2
Legal Disclaimers
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 relating to, among other things, expectations, plans, prospects and
financial results for Trupanion, including, but not limited to, its expectations regarding its ability to execute its business plans
and financial objectives and its future operating results and expenditures. These forward-looking statements are based upon
the current expectations and beliefs of Trupanion’s management as of the date of this press release, and are subject to
certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking
statements. All forward-looking statements made in this press release are based on information available to Trupanion as of
the date hereof, and Trupanion has no obligation to update these forward-looking statements.
In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by
such forward-looking statements: the ability to achieve or maintain profitability and/or appropriate levels of cash flow in
future periods; the accuracy of assumptions used in determining appropriate member acquisition expenditures; the severity
and frequency of claims; the ability to maintain high retention rates; the accuracy of assumptions used in pricing medical
plan subscriptions and the ability to accurately estimate the impact of new products or offerings on claims frequency; actual
claims expense exceeding estimates; regulatory and other constraints on the ability to institute, or the decision to otherwise
delay, pricing modifications in response to changes in actual or estimated claims expense; the effectiveness and statutory or
regulatory compliance of our Territory Partner model and of our Territory Partners, veterinarians and other third parties in
recommending medical plan subscriptions to potential members; the ability to increase the number of Territory Partners and
active hospitals; compliance by us and those referring us members with laws and regulations that apply to our business,
including the sale of a pet medical plan; fluctuations in the Canadian currency exchange rate; the ability to protect our
proprietary and member information; the ability to maintain our culture and team; the ability to maintain the requisite
amount of risk-based capital; the ability to protect and enforce Trupanion’s intellectual property rights; third-party claims
including litigation and regulatory actions; and the ability to recognize benefits from investments in new solutions and
enhancements to Trupanion’s technology platform and website.
For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the
Securities and Exchange Commission (SEC), including but not limited to, Trupanion’s Annual Report on Form 10-K for the year
ended December 31, 2015 and any subsequently filed reports on Forms 10-Q and 8-K. All documents are available through
the SEC’s Electronic Data Gathering Analysis and Retrieval system at www.sec.gov or the Investor Relations section of
Trupanion’s website at http://investors.trupanion.com.
In addition to U.S. GAAP financials, this presentation includes certain non-GAAP financial measures. These non-GAAP
measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance
with U.S. GAAP. A reconciliation of non-GAAP financial measures to the corresponding GAAP measures is provided on our
Investor Relations website.
4. 4
Trupanion at a Glance
• Pure-play focused on simple, fair and high-value
medical insurance for pets
• Comprehensive, lifelong coverage for dogs and
cats, including hereditary and congenital
conditions (i.e., the most likely conditions to occur)
• Pet owners are free to choose any veterinarian,
emergency care, or specialty hospital
• 90% of covered veterinary costs as invoiced, with
no payout limits
• Individual pets are not penalized for needing
treatment or getting older
• Veterinarians can be paid directly, and nearly
instantaneously with Trupanion Express™
Driving Category Growth
36
Consecutive Quarters of
25%+ Revenue Growth
98.61%
Average Monthly Retention 2
Strong Member Loyalty
50%
Total Revenue
5-year CAGR 1
1 As of 12/31/15.
2 For the 12-month period ended 9/30/2016. Average monthly retention is calculated as the monthly retention rate of enrolled pets for each applicable period averaged over the 12 months prior to the
period end date.
5. 5
Compelling Value Proposition
For Both Pet Owners & Veterinarians
• Comprehensive coverage that gives
pet owners flexibility in choice of care
• Provides peace of mind
• Eliminates financial uncertainty and
reduces financial burden
• Pays veterinarian invoices quickly &
seamlessly
• Ability to practice at the highest level
• Freedom to be the most effective
advocate for the pet
• Increased revenue growth & pet
economics
For Pet Owners For Veterinarians
Trupanion unites pet owners & veterinarians to provide the best care for the pets they love
7. 7
$29
$30
$32
$34
$36
$39
$41
$43
$46
$48
$51
$53
$56
$58
$60
$63
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016E
• Total pet spend in U.S.
estimated at $63 billion in
2016
• High growth through
recessionary periods
• Veterinarian industry spend
has grown at the same rate
(a 5% CAGR since 2001,
totaling $15 billion in 2015)
Total U.S. Pet Industry Spend 1
U.S. Pet Owners Spend Generously
on Their Pets
($ in billions)
1 Source: APPA US Pet Industry Spending Figures & Future Outlook
8. 8
1% ~2%
5% 5%
8%
14%
25%
40%
The Market for Medical Insurance for Pets
is Underpenetrated in North America
1 American Pet Products Association, National Pet Owners Survey, 2015 – 2016.
2 Ipso Reid on behalf of the Canadian Animal Health Institute, CAHI Estimate of Canadian Dog and Cat Population Survey, 2014.
3 Packaged Facts, a division of Market Research Group, LLC, Pet Insurance in North America, 5th Edition, October 2013.
4 Munich RE, How to Unlock the Potential of Pet Health?, May 2013.
5 Represents our monthly adjusted revenue per pet for the three month period ended September 30, 2016.
Massive Underpenetrated Market
1,2,3,4
177 Million Pets in U.S. & Canada
$1.0
$2.4
$4.8
$7.2
$23.9
1.0% 2.5% 5.0% 7.5% 25.0%% of Pets with
Insurance:
United States and Canada
are significantly
underpenetrated when
compared to many other
developed countries
Potential Market Size by Penetration Rate
Pets in the U.S. and Canada 177M
Illustrative Monthly Adjusted Revenue
Pet Pet(5)
Penetration in the UK
$48.37
25%
Total Addressable Market $23.9B
($ in billions)
9. 9
• 16 million cats & dogs
• 4,200 vet hospitals
• 25% market penetration
• First offered: 1970
United Kingdom
United States
• 164 million cats & dogs
• 30,000 vet hospitals
• 1% market penetration
• First offered: 1982
U.K. Product (the Trupanion approach)
Sourced primarily from veterinary referrals;
appealed to new customers with vet-issued
trial certificates
Provided broad coverage
Generated high satisfaction rates with pet
owners and veterinarians
Legacy U.S. Product (an insurance-minded approach)
х Sourced primarily direct to consumer
х Provided limited coverage, excluding the conditions
most likely to occur
х Imposed pricing caps and fee schedules
х Generated low satisfaction rates with pet owners
and veterinarians
Penetration Driven by Product Value
Proposition
Trupanion’s product offering aligns with the U.K. value proposition and marketing strategy
10. 10
Attractive Trupanion Adoption & Economics
in Relatively Established Markets
• Region of Western Canada (entered 2003)
• Territory Partner presence for >10 years
• Human population of ~2.7 million
• Cats & dogs population of ~1.3 million
• >18,000 Trupanion enrolled pets1
• High penetration rates:
− 2/3rd active hospital base1,2
− Quotes generated each month equal to
~25% of estimated number of pets acquired2
− ~5% of new pets enrolling with TRUP each
month1
• Accelerated growth:
− Annual pet growth > 20%3
− Annual revenue growth > 30%3
• Attractive economics:
− LVP to PAC > 5:11
Regional Case Study Analysis
Trupanion issued first policy in Canada in 2000 and first policy in the U.S. in 2008
1 For the period ended June 30, 2015.
2 Defined as a hospital that has had a pet enrolled over the three previous months
3 For the annual period ended December 31, 2014.
The above numbers are as of Q2 2015. For competitive reasons, we are not providing ongoing disclosure of this cohort.
11. 11
Barriers Against Competition
Superior Value
Proposition for Pet
Owners
Established Deep
Veterinarian
Relationships
Data Driven Advantage
Proprietary Platform
Enhanced by Trupanion
Express™
1
2
3
4
12. 12
Superior Value Proposition for Pet Owners1
Key Categories Better Providers Legacy U.S. Providers
Coverage
• Full coverage excl. pre-
existing conditions
• Pays 90% of actual vet bill
• Full coverage excl. pre-
existing conditions
• Pays 70-100% of actual
vet bill
• Limited coverage excludes
congenital, hereditary &
pre-existing conditions
• Reimbursement based on
fee schedules & price caps
Pricing
• No fee increases for
treatment
• Cost adjusts with cost of
care for that specific pet
sub-category
• Pet owner may apply any
deductible ($0-$1,000) to
customize pricing
• 1.2M pricing categories
• Increases for age of pet
and cost of care
• Few deductible options
• Increases for age of pet,
prior claims and/or cost of
care
• Few deductible options
Direct Payment vs.
Pet Owner
Reimbursement
• Trupanion Express™
enables instantaneous,
paper-free claims and
direct payment of
invoices at treatment
• Traditional
reimbursement model
• Traditional reimbursement
model
13. 13
Established Deep Veterinary Relationships
Territory Partner and Veterinary Footprint 1…
• Territory Partners represent long-term investment
in veterinary relationships
• Over 80 Territory Partners
– Each cover on average
~250 veterinary hospitals
– Over 86,000 vet
hospital visits in 2015
• Un-replicated within market
• Over 7,600 veterinary hospitals
actively recommend Trupanion
with long-term target of 20,000 2
2
..Drives Efficient Pet Acquisition Model
• Multi-faceted approach to driving sales
leads across channels
Pet Acquisition Channels 1
7%59% 13%
Veterinary
Leads
Online
Leads
Point of
Sale,
All Other
21%
Add a
Pet,
Friend
Existing
Members
New
Members
Over 80% of leads from referral sources
that are not directly compensated
1 As of December 31, 2015
2 Defined as a hospital that has had a pet enrolled over the three previous months
14. 14
Expected Claim per Pet per Month Other
• 1.2 million pricing categories
• Over 10 million medical plan months
• Over 1.5 million claims received
• Breed, postal code and age among
the pricing categories used to
measure risk
Extensive data amassed over 15 years provides significant competitive advantages
Illustrative Pricing Examples
3 Data Driven Advantage
1 All data as of December 31, 2015
Comprehensive data helps us
understand the risk of each pet and
add a 30% margin $24.56
$37.01
$52.51
$58.89$10.52
$15.86
$22.50
$25.24
$35.08
$52.88
$75.01
$84.13
Cat Dog English Bulldog English Bulldog in NY
15. 15
• Business model designed to eliminate frictional
costs:
– Own only N.A. insurance company focused on
medical care for pets
– In-house actuaries, claims & contact center for
quality control and speed
– Dedicated national Territory Partner network
– No brand licensing fees
– Proprietary underwriting technology
50%
70%
20%
30% 30%
Illustrative Legacy
Model
Trupanion
Model
Profits Before Other Costs
Frictional Costs
Fully-loaded Claim Payout
4
Proprietary Platform Enhanced by
Trupanion Express™
~20% in
frictional
cost
Strategic choice to
provide customer
structural benefit
by paying ~20%
more on claims
Proprietary Platform Provides Cost Advantage Value Proposition Enhanced by Trupanion Express™
• Eliminates paperwork and uncertainty of
coverage
– Customers avoid having to pay out of pocket
– Veterinarians streamline billing process and
eliminate credit card fees
– Trupanion enhances data connectivity with
veterinarians
• Un-replicated in the market
Trupanion Express™Illustrative Comparison of Cost Structure
16. 16
Our Mission Driven Model Resonates with
Third Parties
“I had the opportunity to meet with a broad cross
section of Trupanion’s people in Seattle… What I
experienced was a group of people who are
confident, ambitious, energized and, above all,
purpose driven.”
– Robert Vinall, RV Capital, quote from his annual
investor letter
“In Trupanion’s case, it is easy to underestimate how
important trust will be in shaping the Industry… trust must
be continuously earned by being deserved…which is
expressed as a mission-driven culture.”
– Josh Tarasoff, Greenlea Lane Capital Partners, quote
from his annual investor letter
18. 18
Compelling Financial Model
• High growth business capturing underpenetrated market
• Monthly subscription model with recurring and visible revenues
• Strong lifetime value and proven customer unit economics
• Attractive long-term margin profile
19. 19
31
57
89
127
182
232
292
334
277
$19
$37
$56
$77
$104
$133
$34
$45
$7
$12
$14
$4
$3
2010 2011 2012 2013 2014 2015 9/30/15 9/30/16
Subscription Revenue Other Revenue
$38
$48
Member-Centric Approach Driving Growth
Total Enrolled Pets 1 Total Revenue 2
(in thousands)
21% YOY
Growth
28% YOY
Growth
$19
$37
$56
$84
$116
$147
($ in millions)
1 Cumulative as of December 30th for each respective year from 2010 to 2015, and the three months ended September 30, 2015 and 2016
2 Includes subscription business segment and other business segment. Other business segment primarily includes revenue from plans not marketed directly to consumers
20. 20
($120)
-$200
-$100
$0
$100
$200
$300
$400
$500
$600
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
($120)
($150)
($100)
($50)
$0
$50
$100
$150
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7
Annual Cash Flow from Illustrative Member 1 Cumulative Cash Flow from Illustrative Member 1
Q3 2016
5.2X
LVP to PAC
2, 3
LVP
PAC
Near Term Investment Drives Long Term
Cash Flows
Breakeven in
~15 months
1 Based on lifetime value of a pet and average pet acquisition cost as of September 30, 2016 in subscription business segment.
2 Lifetime value of a pet (LVP) is calculated in part based on gross profit from our subscription business segment for the 12 months prior to the period end date excluding stock-based compensation expense
related to cost of revenue from our subscription business segment, sign-up fee revenue and the change in deferred revenue between periods, multiplied by the implied average subscriber life in months.
3 Pet acquisition cost (PAC) is calculated as net acquisition cost divided by the total number of new subscription pets enrolled in that period. Net acquisition cost, a non-GAAP financial measure, is calculated in
a reporting period as sales and marketing expenses, excluding stock-based compensation, offset by sign-up fee revenue and other business segment sales and marketing expenses.
Marketing costs are expensed up front while revenue is realized over the life of the member
21. 21
Attractive Long Term Margin Profile
1 In 2015, the fixed expenses were comprised of 9% G&A, 4% Core IT and 2% related to our Direct Pay Initiative. In 2014, the fixed expenses were comprised of 10% G&A, 4% Core IT and 3% related to our Direct Pay
Initiative.
% of Revenue 2011 2012 2013 2014 2015 Q1 2016 Q2 2016 Q3 2016
Long-Term
Target
Revenues 100% 100% 100% 100% 100% 100% 100% 100% 100%
Cost of goods 67% 68% 67% 69% 70% 72% 71% 71% 70%
Variable expenses 11% 12% 14% 14% 12% 11% 11% 12% 10%
Fixed expenses (1) 13% 15% 14% 17% 15% 11% 10% 9% 5%
Adjusted operating margin 8.5% 5.3% 5.1% 0.7% 2.4% 6.3% 8.6% 8.4% 15%
Acquisition cost 13% 12% 10% 10% 10% 9% 7% 8%
Adjusted EBITDA -5% -7% -5% -9% -8% -2% 1% 1%
Net loss -11% -12% -10% -18% -12% -6% -2% -3%
Free cash flow (in thousands) (732)$ (3,598)$ (2,496)$ (16,434)$ (15,319)$ (1,951)$ 1,121$ 852$
