Segment Information

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

Segment Information

Segment Information

We have one reportable segment: management operations. All segment revenue is derived in the United States, the majority of which is from the subscriber’s agreement between us and the subscribers (policyholders) at the Exchange, our sole customer, as further described in Note 3, "Revenue". Our chief operating decision maker ("CODM") is our Executive Council, which includes our Chief Executive Officer ("CEO"), Chief Financial Officer, executive vice presidents and certain senior vice presidents reporting directly to the CEO as applicable. The CODM assesses performance for the management operations segment and decides how to allocate resources based on net income, as reported in our Consolidated Statements of Operations. Net income is used to monitor budget versus actual results. Total assets as reported in our Consolidated Statements of Financial Position, all of which are located in the United States, are reviewed by the CODM for purposes of decision making. The accounting policies of our management operations segment are the same as those described in Note 2, "Significant Accounting Policies".

The following table presents our management operations segment revenue, significant segment expenses regularly provided to the CODM and net income for the years ended December 31:

(in thousands)	2024		2023		2022
Management fee revenue	$	2,962,429	$	2,505,742	$	2,146,169
Administrative services reimbursement revenue	806,336		737,139		668,268
Service agreement revenue	26,350		26,059		25,687
Total operating revenue	3,795,115		3,268,940		2,840,124
Commissions	1,601,401		1,348,530		1,179,569
Underwriting and policy processing	199,485		181,003		171,625
Information technology	215,488		216,746		198,157
Sales and advertising	66,480		58,905		60,000
Customer service	43,045		34,391		34,333
Administrative and other	186,425		171,970		151,958
Cost of operations - policy issuance and renewal services	2,312,324		2,011,545		1,795,642
Cost of operations - administrative services	806,336		737,139		668,268
Total operating expenses (1)	3,118,660		2,748,684		2,463,910
Operating income	676,455		520,256		376,214
Total investment income	69,260		28,968		632
Interest expense, net	—		—		2,009
Other income	11,564		12,712		1,615
Income tax expense	156,965		115,875		77,883
Net income	$	600,314	$	446,061	$	298,569

(1)    See Note 8, "Fixed Assets", for management operations segment depreciation and amortization expense included in "Total operating expenses", as reported on our Consolidated Statements of Operations. See our Consolidated Statements of Cash Flows for segment

expenditures on fixed asset additions.