DOMA HOLDINGS, INC. – 10-K – Management report and analysis of the financial situation and operating results

The following discussion and analysis of the financial condition and results of
operations of Doma should be read together with the audited consolidated
financial statements as of December 31, 2021 and 2020 and for the years ended
December 31, 2021, 2020, and 2019 together with the related notes thereto,
contained in this Annual Report on Form 10-K (this "Annual Report").
Management's Discussion and Analysis of Financial Condition and Results of
Operations generally includes tables with 2 year financial performance,
accompanied by narrative for 2021. For further discussion of prior period
financial results, please refer to our Registration Statement on Form S-1 (No.
333-258942), as amended, filed with the SEC on September 3, 2021 and declared
effective on September 8, 2021. This discussion may contain forward-looking
statements based upon current expectations that involve risks and uncertainties
and should be read in conjunction with the disclosures and information contained
in "Cautionary Note Regarding Forward-Looking Statements" in this Annual Report.
Our actual results may differ materially from those projected in these
forward-looking statements as a result of various factors, including those set
forth under Part I, Item 1A "Risk Factors" or in other parts of this Annual
Report. Certain amounts may not foot due to rounding. All forward-looking
statements in this Annual Report are based on information available to us as of
the date hereof, and we assume no obligation to update any such forward-looking
statements to reflect future events or circumstances, except as required by law.

Unless the context otherwise requires, references to "company," "Company,"
"Doma," "we," "us," "our" and similar terms refer to Doma Holdings, Inc. (f/k/a
Capitol Investment Corp. V) and its consolidated subsidiaries. References to
"Capitol" refer to our predecessor company prior to the consummation of the
Business Combination. References to "Old Doma" refer to Old Doma prior to the
Business Combination and to States Title Holding, Inc. ("States Title"), the
wholly owned subsidiary of Doma, upon the consummation of the Business
Combination.

Our business model

Today, we primarily create, underwrite and provide title, escrow and
settlement services for the two most common types of transactions in the
residential real estate market: purchase and refinancing operations. We operate
and report on our activity through two complementary reporting segments,
Distribution and subscription. See “-Presentation Base” below.

Our Distribution segment reflects the sale of our products and services, other
than underwriting and insurance services reflected in our Underwriting segment,
that we provide through our captive title agents and agencies ("Direct Agents").
We market our products and services through two channels to appeal to our
referral partners and ultimately reach our customers, the individuals purchasing
a new home or refinancing their existing mortgage:

•Doma Enterprise - we target partnerships with national lenders and mortgage
originators that maintain centralized lending operations. Once a partnership has
been established, we integrate our Doma Intelligence platform with the partner's
production systems, to enable frictionless order origination and fulfillment.
Substantially all Doma Enterprise orders are underwritten by Doma.

•Local Markets ("Local") - we target partnerships with realtors, attorneys and
non-centralized loan originators via a 103-branch footprint across ten states as
of December 31, 2021. For the year ended December 31, 2021, approximately 90% of
our lender and owner policies from our Local channel were underwritten by Doma,
while the remaining share was underwritten by third-party underwriters.

Our Underwriting segment reflects the sale of our underwriting and insurance
services. These services are integrated with our Direct Agents channel and other
non-captive title and escrow agents in the market ("Third-Party Agents") through
our captive title insurance carrier. For customers sourced through the
Third-Party Agents channel, we retain a portion of the title premium
(approximately 16%) in exchange for underwriting risk to our balance sheet. The
Third-Party Agents channel includes the title underwriting and insurance
services we provide to Lennar, a related party, for its home builder
transactions.

The financial results of our Direct Agents channel impact both our Distribution
and Underwriting reporting segments, whereas the results from the Third-Party
Agents channel impact only the Underwriting reporting segment.

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Our expenses generally consist of direct fulfillment expenses related to closing
a transaction and insuring the risk, customer acquisition costs related to
acquiring new business, and other operating expenses as described below:

•Direct fulfillment expenses - comprised of direct labor and direct non-labor
expenses. Direct labor expenses refer to payroll costs associated with employees
who directly contribute to the opening and closing of an order. Some examples of
direct labor expenses include title and escrow services, closing services, and
customer service. Direct non-labor expenses refer to non-payroll expenses that
are closely linked with order volume, such as provision for claims, title
examination expense, office supplies, and premium and other related taxes.

•Customer acquisition costs - this category is comprised of sales payroll, sales
commissions, customer success payroll, sales-related travel and entertainment,
and an allocated portion of corporate marketing.

•Other operating expenses - all other expenses that do not directly contribute
to the fulfillment or acquisition of an order or policy are considered other
operating expenses. This category is predominately comprised of research and
development costs, corporate support expenses, occupancy, and other general and
administrative expenses.

We expect to continue to invest in our Doma Intelligence platform as well as
organic and inorganic growth opportunities in order to remain competitive with
existing large-scale industry incumbents who are well financed and have
significant resources to defend their existing market positions. Over time, we
plan to use our cash flows to invest in customer acquisition, research and
development, and new product offerings, to further improve revenue growth and
accelerate the elimination of the friction and expense of closing a residential
real estate transaction.

Basis of Presentation

We present the results of our two operating segments:

•Distribution - our Distribution segment reflects our Direct Agents operations
of acquiring customer orders and providing title and escrow services for real
estate closing transactions. We acquire customers through our Local and Doma
Enterprise customer referral channels.

•Underwriting - our Underwriting segment reflects the results of our title
insurance underwriting business, including policies referred through our Direct
Agents and Third-Party Agents channels. The referring agents retain
approximately 84% of the policy premiums in exchange for their services. The
retention rate varies by state and agent.

Costs are allocated to the segments to arrive at adjusted gross profit, our
segment measure of profit and loss. Our accounting policies for segments are the
same as those applied to our consolidated financial statements, except as
described below under "-Key Components of Revenues and Expenses." Inter-segment
revenues and expenses are eliminated in consolidation. See Note 7 in our
consolidated financial statements for a summary of our segment results and a
reconciliation between segment adjusted gross profit and our consolidated loss
before income taxes.

Important events and transactions

Business combination

On the Closing Date, Capitol consummated the Business Combination with Old Doma,
pursuant to the Agreement. In connection with the closing of the Business
Combination, Old Doma changed its name to States Title Holding, Inc., Capitol
changed its name to Doma Holdings, Inc. ("Doma") and Old Doma became a wholly
owned subsidiary of Doma. Doma continues the existing business operations of Old
Doma as a publicly traded company. Refer to Note 3 to the consolidated financial
statements for additional details on the Business Combination.

As a result of the Business Combination, we became the operating successor to an
SEC-registered and New York Stock Exchange-listed shell company. Becoming public
has required us to hire additional personnel and implement procedures and
processes to address public company regulatory requirements and practices. Also,
we

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have incurred additional annual expenses as a public company for, among other
things, directors' and officers' liability insurance, director fees, and
additional internal and external accounting, legal, and administrative
resources.

Impact of COVID-19 and other macroeconomic trends

On March 11, 2020, the World Health Organization declared COVID-19, the disease
caused by the novel coronavirus, a pandemic. COVID-19 has resulted in
significant macroeconomic impacts and market disruptions, particularly as
federal, state, and local governments enacted emergency measures intended to
combat the spread of the virus, including shelter-in-place orders, travel
limitations, quarantine periods and social distancing. In response, we took
appropriate measures to ensure the health and safety of our employees, customers
and partners, including work-from-home policies. Depending on the location and
timing, some of these measures still remain in place today.

We operate in the real estate industry and our business volumes are directly
impacted by market trends for mortgage refinancing transactions, existing real
estate purchase transactions, and new real estate purchase transactions,
particularly in the residential segment of the market. Responses to the COVID-19
pandemic initially led to a material decline in purchase transactions.
Subsequent U.S. federal stimulus measures, including interest rate reductions by
the Federal Reserve, and local regulatory initiatives, such as permitting remote
notarization, led to a quick recovery for the real estate industry and resulted
in an increase in mortgage refinancing and purchase volumes, which we believe
benefited our business model. These initiatives have also led to a greater
demand for homes, higher home prices, and record low home inventories. While
real estate transactions have largely returned to or exceeded pre-pandemic
levels, we continue to monitor economic and regulatory developments closely as
we navigate the volatility and uncertainty created by the pandemic.

Demand for mortgages tends to correlate closely with changes in interest rates,
meaning that our order trends are likely to be impacted by future changes in
interest rates. However, we believe that our current, low market share and
disruptive approach to title insurance, escrow, and closing services will enable
us to gain market share, which in turn should mitigate the risk to our revenue
growth trends relative to industry incumbents.

The acquisition of the North American title

At January 7, 2019we acquired from Lennar Corporation (“Lennar”) its
subsidiary company, North American Title Insurance Companywho used his title
insurance underwriting company and its third party title insurance agency
business, which operated under its North American Title Company brand
(collectively, the “Acquired Business”), for the aggregate of shares and deferred cash
consideration of $171.7 million (the “Acquisition of North American Securities”),
including $87.0 million in the form of a seller’s financing note.

The North American Title Acquisition provided us with insurance licenses and an
agency network across the United States, as well as a substantial data set to
accelerate our machine intelligence technology. This acquisition marked a
significant milestone for Doma in achieving national scale and licensure in
pursuit of our long-term growth strategy. Whereas we generated minimal revenue
prior to the North American Title Acquisition, following its consummation we
began to operate our business with a broad distribution footprint and data that
enabled us to accelerate the rollout of our Doma Intelligence platform. The
North American Title Acquisition also resulted in our recording of $111.5
million in goodwill and $61.4 million in acquired marketable securities.

Since the North American Title Acquisition, we have implemented several
initiatives to integrate and realign the operations of the Acquired Business.
This includes transforming the Acquired Business's retail agency operations by
streamlining our physical branch footprint, consolidating branch back office
functions into a common corporate operation, and implementing a common
production platform across all our branches. We continue to invest in the
development and rollout of the Doma Intelligence platform across our Local
branch footprint. We expect to realize significant cost savings over time as
manual processes are replaced with our proprietary machine learning platform and
data science-driven approach to title and closing services. The benefits of this
effort, particularly on margin growth, are likely to be realized gradually in
future reporting periods. As a result, our recent results of operations,
including for the years ended December 31, 2021, 2020, and 2019 may not be
indicative of our results for future periods.

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Key Operating and Financial Indicators

We regularly review several key operational and financial indicators to assess
our performance and trends and inform management budgets,
projections and strategic decisions.

The following table presents our key operating and financial indicators, as well
as the relevant generally accepted accounting principles ("GAAP") measures, for
the periods indicated:

                                                                         Year Ended
                                                                 2021                     2020
                                                          (in thousands, except for open and closed
                                                                       order numbers)
Key operating data:
Opened orders                                                    178,689                  136,873
Closed orders                                                    136,428                   92,389
GAAP financial data:
Revenue(1)                                               $       558,043            $     409,814
Gross profit(2)                                          $       103,261            $      85,830
Net loss                                                 $      (113,056)           $     (35,103)
Non-GAAP financial data(3):
Retained premiums and fees                               $       259,598            $     189,671
Adjusted gross profit                                    $       113,582            $      91,645
Ratio of adjusted gross profit to retained premiums and
fees                                                                  44    %                  48  %
Adjusted EBITDA                                          $       (71,592)           $     (18,986)


_________________

(1) Revenue includes (i) net premiums written, (ii) escrow, other
security and other costs, and (iii) investments, dividends and other income.
Net loss is made up of the revenue and expense components. For more
information about the measures included in our consolidated income statements,
see “-Key Components of Income and Expenses-Income” below.

(2)Gross profit, calculated in accordance with GAAP, is calculated as total
revenue, minus premiums retained by Third-Party Agents, direct labor expense
(including mainly personnel expense for certain employees involved in the direct
fulfillment of policies) and direct non-labor expense (including mainly title
examination expense, provision for claims, and depreciation and amortization).
In our consolidated income statements, depreciation and amortization is recorded
under the "other operating expenses" caption.

(3)Retained premiums and fees, adjusted gross profit and adjusted EBITDA are
non-GAAP financial measures. Refer to "-Non-GAAP Financial Measures" below for
additional information and reconciliations of these measures to the most closely
comparable GAAP financial measures.

Open and closed orders

Opened orders represent the number of orders placed for title insurance and/or
escrow services (which includes the disbursement of funds, signing of documents
and recording of the transaction with the county office) through our Direct
Agents, typically in connection with a home purchase or mortgage refinancing
transaction. An order may be opened upon an indication of interest in a specific
property from a customer and may be cancelled by the customer before or after
the signing of a purchase or loan agreement. Closed orders represent the number
of opened orders for title insurance and/or escrow services that were
successfully fulfilled in each period with the issuance of a title insurance
policy and/or provision of escrow services. Opened and closed orders do not
include orders or referrals for title insurance from our Third-Party Agents. For
avoidance of doubt, a closed order for a home purchase transaction typically
results in the issuance of two title insurance policies, whereas a refinance
transaction typically results in the issuance of one title insurance policy.

We review opened orders as a leading indicator of our Direct Agents revenue
pipeline and closed orders as a direct indicator of Direct Agents revenue for
the concurrent period, and believe these measures are useful to investors for
the same reasons. We believe that the relationship between opened and closed
orders will remain relatively consistent over time, and that opened order growth
is generally a reliable indicator of future financial performance. However,
degradation in the ratio of opened orders to closed orders may be a leading
indicator of adverse macroeconomic or real estate market trends.

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Retained premiums and fees

Retained premiums and fees, a non-GAAP financial measure, is defined as total
revenue under GAAP minus premiums retained by Third-Party Agents. See "-Non-GAAP
Financial Measures" below for a reconciliation of our retained premiums and fees
to gross profit, the most closely comparable GAAP measure, and additional
information about the limitations of our non-GAAP measures.

Our business strategy is focused on leveraging our Doma Intelligence platform to
provide an overall improved customer and referral partner experience and to
drive time and expense efficiencies principally in our Direct Agents channel. In
our Third-Party Agents channel in contrast, we provide our underwriting
expertise and balance sheet to insure the risk on policies referred by such
Third-Party Agents and, for that service, we typically receive approximately 16%
of the premium for the policy we underwrite. As such, we use retained premiums
and fees, which is net of the impact of premiums retained by Third-Party Agents,
as an important measure of the earning power of our business and our future
growth trends, and believe it is useful to investors for the same reasons.

Adjusted gross profit

Adjusted gross profit, a non-GAAP financial measure, is defined as gross profit
(loss) under GAAP, adjusted to exclude the impact of depreciation and
amortization. See "-Non-GAAP Financial Measures" below for a reconciliation of
our adjusted gross profit to gross profit, the most closely comparable GAAP
measure and additional information about the limitations of our non-GAAP
measures.

Management views adjusted gross profit as an important indicator of our
underlying profitability and efficiency. As we generate more business that is
serviced through our Doma Intelligence platform, we expect to reduce fulfillment
costs as our direct labor expense per order continues to decline, and we expect
the adjusted gross profit per transaction to grow faster than retained premiums
and fees per transaction over the long term.

Adjusted gross margin ratio on premiums and fees withheld

Ratio of adjusted gross profit to retained premiums and fees, a non-GAAP
measure, expressed as a percentage, is calculated by dividing adjusted gross
profit by retained premiums and fees. Both the numerator and denominator are net
of the impact of premiums retained by Third-Party Agents because that is a cost
related to our Underwriting segment over which we have limited control, as
Third-Party Agents customarily retain approximately 84% of the premiums related
to a title insurance policy referral pursuant to the terms of long-term
contracts.

We view the ratio of adjusted gross profit to retained premiums and fees as an
important indicator of our operating efficiency and the impact of our
machine-learning capabilities, and believe it is useful to investors for the
same reasons.

We expect improvement to our ratio of adjusted gross profit to retained premiums
and fees over the long term, reflecting the continued reduction in our average
fulfillment costs per order.

Adjusted EBITDA

Adjusted EBITDA, a non-GAAP financial measure, is defined as net income (loss)
before interest, income taxes and depreciation and amortization, and further
adjusted to exclude the impact of stock-based compensation, COVID-related
severance costs and the change in fair value of Warrant and Sponsor Covered
Shares liabilities. See "-Non-GAAP Financial Measures" below for a
reconciliation of our adjusted EBITDA to net loss, the most closely comparable
GAAP measure and additional information about the limitations of our non-GAAP
measures.

We look at Adjusted EBITDA as an important measure of our recurring revenue and
underlying financial performance, and we believe it is useful for investors to
same reason.

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Key Components of Revenues and Expenses

Revenue

Net premiums written

We generate net premiums by underwriting title insurance policies and recognize
premiums in full upon the closing of the underlying transaction. For some of our
Third-Party Agents, we also accrue premium revenue for title insurance policies
we estimate to have been issued in the current period but reported to us by the
Third-Party Agent in a subsequent period. See "-Critical Accounting Policies and
Estimates- Accrued net premiums written from Third-Party Agent referrals" below
for further explanation of this accrual. For the years ended 2021 and 2020, the
average time lag between the issuing of these policies by our Third-Party Agents
and the reporting of these policies or premiums to us has been approximately
three months. Net premiums written is inclusive of the portion of premiums
retained by Third-Party Agents, which is recorded as an expense, as described
below.

In order to reduce the risk associated with our insurance policies underwritten, we
use reinsurance programs to limit our maximum exposure to loss. under our
reinsurance treaties, we cede the premiums of the underlying policies
exchange for a ceding commission from the reinsurer and our net written premiums
exclude these ceded premiums.

Our principal reinsurance quota share agreement covers instantly underwritten
policies from refinance and home equity line of credit transactions under which
we historically ceded 100% of the written premium of each covered policy during
2019, 2020, and during the period from January 1, 2021 through February 23,
2021. Pursuant to a renewed agreement, which became effective on February 24,
2021, we cede only 25% of the written premium on such instantly underwritten
policies, up to a total reinsurance coverage limit of $80.0 million in premiums
reinsured, after which we retain 100% of the written premium on instantly
underwritten policies. This reduction in ceding percentage has resulted in
higher net premiums written per transaction when compared to prior period
results. Refer to Note 2 to the consolidated financial statements above for
additional details on our reinsurance treaties.

Escrow, other title fees and other

Escrow fees and other title-related fees are charged for managing the closing of
real estate transactions, including the processing of funds on behalf of the
transaction participants, gathering and recording the required closing
documents, providing notary services, and other real estate or title-related
activities. Other fees relate to various ancillary services we provide,
including fees for rendering a cashier's check, document preparation fees,
homeowner's association letter fees, inspection fees, lien letter fees and wire
fees. We also recognize ceding commissions received in connection with
reinsurance treaties, to the extent the amount of such ceding commissions
exceeds reinsurance-related costs.

This revenue item is most directly associated with our Distribution segment. For
segment-level reporting, agent premiums retained by our Distribution segment are
recorded as revenue under the "escrow, other title-related fees and other"
caption of our segment income statements, while our Underwriting segment records
a corresponding expense for insurance policies issued by us. The impact of these
internal transactions is eliminated upon consolidation.

Investments, dividends and other income

Investment, dividends and other income are mainly generated from our investment
portfolio. We primarily invest in fixed income securities, mainly composed of
corporate debt obligations, U.S. government agency obligations, certificates of
deposit, U.S. Treasuries and mortgage loans.

Expenses

Premiums retained by third-party agents

When customers are referred to us and we underwrite a policy, the referring
Third-Party Agent retains a significant portion of the premium, which typically
amounts to approximately 84% of the premium. The portion of premiums retained by
Third-Party Agents is recorded as an expense. These referral expenses relate
exclusively to

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our Underwriting segment. As we continue to grow our Direct Agents channel
relative to our Third-Party Agents channel, we expect that premiums retained by
Third-Party Agents will decline as a percentage of revenue over time.

For segment-level reporting, premiums retained by our Direct Agents (which are
recorded as Distribution segment revenue) are recorded as part of "premiums
retained by agents" expense for our Underwriting segment. The impact of these
internal transactions is eliminated upon consolidation.

Title examination fees

Title examination costs are incurred as part of the search and
review of public information prior to issuance of title insurance
Strategies.

Provision for claims

The provision for claims expenses is considered by management to be made up of three
components: IBNR reserves, known claims and claims adjustment expenses
escrow reserves and losses.

IBNR is a loss reserve that primarily reflects the sum of expected losses for
unreported claims. The expense is calculated by applying a rate (the loss
provision rate) to total title insurance premiums. The loss provision rate is
determined at the beginning of each year based in part upon an assessment
performed by an independent actuarial firm utilizing generally accepted
actuarial methods. The assessment also takes account of industry trends, the
regulatory environment and geographic considerations and is updated during the
year based on developments. This loss provision rate is set to provide for
losses on current year policies. Due to our long claim exposure, our provision
for claims periodically includes amounts of adverse or positive claims
development on policies issued in prior years, when claims on such policies are
higher or lower than initially expected.

Based on the risk profile of premium vintages over time and on the basis of
projections from a firm of independent actuaries, we build up or release reserves
related to our old policies. Our IBNR may increase in proportion to our
revenues as we continue to increase the proportion of our businesses served
through our Doma Intelligence platform, although we believe it will decrease over time
in the long term, because our predictive artificial intelligence technology produces
improved results.

Known claims loss and loss adjustment expense reserves is an expense that
reflects the best estimate of the remaining cost to resolve a claim, based on
the information available at the time. In practice, most claims do not settle
for the initial known claims provision; rather, as new information is developed
during the course of claims administration, the initial estimates are revised,
sometimes downward and sometimes upward. This additional development is provided
for in the actuarial projection of IBNR, but it is not allocable to specific
claims. Actual costs that are incurred in the claims administration are booked
to loss adjustment expense, which is primarily comprised of legal expenses
associated with investigating and settling a claim.

Escrow-related losses are primarily attributable to clerical errors that arise
during the escrow process and caused by the settlement agent. As the proportion
of our orders processed through our Doma Intelligence platform continues to
increase, we expect escrow-related losses to decline over time.

Personnel costs

Personnel costs include base salaries, benefits, bonuses paid to
employees and social charges. This expenditure is mainly due to the average
number of employees and our hiring activities during a given period.

In our presentation and reconciliation of segment results and our calculation of
gross profit, we classify personnel costs as either direct or indirect expenses,
reflecting the activities performed by each employee. Direct personnel costs
relate to employees whose job function is directly related to our fulfillment
activities, including underwriters, closing agents, escrow agents, funding
agents, and title and curative agents, and are included in the calculation of
our segment adjusted gross profit. Indirect personnel costs relate to employees
whose roles do not directly support our transaction fulfillment activities,
including sales agents, training specialists and customer success agents,
segment management, research and development and other information technology
personnel, and corporate support staff.

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Other operating expenses

Other operating expenses are comprised of occupancy, maintenance and utilities,
product taxes (for example, state taxes on premiums written), professional fees
(including legal, audit and other third-party consulting costs), software
licenses and sales tools, travel and entertainment costs, and depreciation and
amortization, among other costs.

Change in fair value of liabilities related to Warrants and Sponsors Covered Shares

Change in fair value of Warrant and Sponsor Covered Shares liabilities consists
of unrealized gains and losses as a result of recording our Warrants and Sponsor
Covered Shares to fair value at the end of each reporting period.

income tax expense

Although we are in a consolidated net loss position and report our federal
income taxes as a consolidated tax group, we incur state income taxes in certain
jurisdictions where we have profitable operations. Additionally, we incur
mandatory minimum state income taxes in certain jurisdictions. Also, we have
recognized deferred tax assets but have offset them with a full valuation
allowance, reflecting substantial uncertainty as to their recoverability in
future periods. Until we report at least three years of profitability, we may
not be able to realize the tax benefits of these deferred tax assets.

Operating results

We discuss our historical results of operations below, on a consolidated basis
and by segment. Past financial results are not indicative of future results. As
previously mentioned, our results of operations include tables with two years of
financial performance, accompanied by narrative for 2021 as compared to 2020.
For further discussion of prior period financial results, refer to our
Registration Statement on Form S-1 (No. 333-258942), as amended, filed with the
SEC on September 3, 2021 and declared effective on September 8, 2021.

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Contents
Year ended December 31, 2021 Compared to the year ended December 31, 2020

The following table presents a summary of our consolidated results of
transactions for the periods indicated and changes between periods.

                                                                   Year Ended December 31,
                                           2021                2020              $ Change               % Change
                                                             (in thousands, except percentages)
Revenues:
Net premiums written                   $  475,352          $  345,608          $  129,744                        38  %
Escrow, other title-related fees and
other                                      79,585              61,275              18,310                        30  %
Investment, dividend and other income       3,106               2,931                 175                         6  %
Total revenues                         $  558,043          $  409,814          $  148,229                        36  %

Expenses:

Premiums retained by Third-Party
Agents                                 $  298,445          $  220,143          $   78,302                        36  %
Title examination expense                  22,137              16,204               5,933                        37  %
Provision for claims                       21,335              15,337               5,998                        39  %
Personnel costs                           238,134             143,526              94,608                        66  %
Other operating expenses                   79,951              43,285              36,666                        85  %
Total operating expenses               $  660,002          $  438,495          $  221,507                        51  %
Loss from operations                     (101,959)            (28,681)            (73,278)                      255  %
Other (expense) income:
Change in fair value of Warrant and
Sponsor Covered Shares liabilities          6,691                   -               6,691                            *
Interest expense                          (16,861)             (5,579)            (11,282)                      202  %
Loss before income taxes                 (112,129)            (34,260)            (77,869)                      227  %
Income tax expense                     $     (927)         $     (843)         $      (84)                       10  %
Net loss                               $ (113,056)         $  (35,103)         $  (77,953)                      222  %

* = Not shown because previous period amount is zero

Income

Net premiums written. Net premiums written increased by $129.7 million, or 38%,
for the year ended December 31, 2021 compared to the same period in the prior
year, driven by a 46% increase in premiums from our Direct Agents channel and a
35% increase in premiums from our Third-Party Agents channel.

For the year ended December 31, 2021, Direct Agents premium growth was driven by
closed order growth of 48%. Closed order growth overall increased due to new
customer and referral partner acquisitions, increased wallet share with existing
referral partners, an expanding geographical footprint, and market conditions
resulting in the higher volume of refinance orders. Closed order growth was
offset by lower average premiums per Direct Agent order of 2%, due to a higher
share of refinance orders during the course of the year.

Third-Party Agent growth reflects the results of management's continued efforts
to increase wallet share capture from existing Third-Party Agents as well as
efforts to generate new agent relationships to accelerate growth. The rise in
premiums was also driven by an overall increase in market activity due to the
low interest rate environment.

Escrow, other title-related fees and other. Escrow, other title-related fees and
other increased $18.3 million, or 30%, for the year ended December 31, 2021
compared to the same period in the prior year, driven by the corresponding
closed order growth, offset by the higher mix of Doma Enterprise closed orders,
which carry a lower price point as compared to the Local channel.

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Investment, dividend and other income. Investment, dividend and other income
increased $0.2 million or 6% for the year ended December 31, 2021 compared to
the same period in the prior year, primarily due to one-time realized gains on
investments from portfolio rebalancing.

Expenses

Premiums Withheld by Third-Party Agents. Premiums withheld by third-party agents
increased by $78.3 millionor 36%, for the year ended December 31, 2021
compared to the same period of the previous year. The increase was drawn
mainly by the growth of written policies referred by third parties
Agents, and there has been no material change in the average commissions paid to our
Third Party Agents.

Title examination expense. Title examination expense increased by $5.9 million,
or 37%, for the year ended December 31, 2021 compared to the same periods in the
prior year, principally due to growth in Direct Agent closed orders and premiums
written.

Provision for claims. Provision for claims increased by $6.0 million, or 39%,
for the year ended December 31, 2021 compared to the same period in the prior
year primarily due to new business written premiums from the corresponding
periods. The provision for claims, expressed as a percentage of net premiums
written, was 4.5% and 4.4% for the year ended December 31, 2021 and 2020,
respectively. The reported loss emergence in both periods on policies issued in
prior years was lower than expected.

Personnel costs. Personnel costs increased by $94.6 million, or 66%, for the
year ended December 31, 2021 compared to the same period in the prior year, due
to investments in direct labor and customer acquisition, the expansion of our
corporate support functions to enhance public company readiness, and an increase
in operations and management staff supporting the direct agents channel as the
organization invests in driving growth of Doma Intelligence-enabled closings.

Other operating expenses. Other operating expenses increased by $36.7 million,
or 85%, for the year ended December 31, 2021 compared to the same period in the
prior year, driven by 116% higher corporate support expenses to operate as a
public company, higher operating expenses to support revenue growth such as
hardware and software purchases, higher amortization expenses related to
investments in the development of the Doma Intelligence platform, and higher
amortization of intangibles related to our rebranding to "Doma." Depreciation
and amortization increased by $4.5 million, or 77%, respectively, for the year
ended December 31, 2021 compared to the same period in the prior year.

Change in fair value of Warrant and Sponsor Covered Shares liabilities. The
change in the fair value of Warrant and Sponsor Covered Shares (as defined in
Note 2) liabilities increased by $6.7 million for the year ended December 31,
2021 compared to the same period in the prior year due to the addition of these
liabilities from the Business Combination in 2021.

Interest expense. Interest expense increased by $11.3 million, or 202%, for the
year ended December 31, 2021 compared to the same period in the prior year, due
to a higher amount of debt outstanding as well as a higher effective interest
rate in 2021, which is a result of the funding of the new $150.0 million Senior
Debt facility during the first quarter of 2021.

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Supplemental Segment Results Discussion - Year Ended December 31, 2021 Compared
to the Year Ended December 31, 2020

The following table sets forth a summary of the results of operations for our
Distribution and Underwriting segments for the years indicated. See "-Basis of
Presentation" above.

                                                         Year Ended December 31, 2021                                                          

Year ended December 31, 2020

                               Distribution           Underwriting           Eliminations           Consolidated           Distribution           Underwriting           Eliminations           Consolidated
                                                                                                              (in thousands)
Net premiums written         $           -          $     476,328          $        (976)         $     475,352          $           -          $     345,608          $           -          $     345,608
Escrow, other title-related
fees and other (1)                 177,069                  3,520               (101,004)                79,585                129,590                  2,099                (70,414)                61,275
Investment, dividend and
other income                           205                  2,901                      -                  3,106                    699                  2,232                      -                  2,931
Total revenue                $     177,274          $     482,749         

($101,980) $558,043 $130,289 $349,939 ($70,414) $409,814
Premiums withheld by agents
(2)

                                      -                400,425               (101,980)               298,445                      -                290,557                (70,414)               220,143
Direct labor (3)                    81,204                  8,412                      -                 89,616                 55,334                  6,820                      -                 62,154
Other direct costs (4)              23,726                 11,339                      -                 35,065                 16,912                  3,623                      -                 20,535
Provision for title claim
losses                               2,257                 19,078                      -                 21,335                  1,415                 13,922                      -                 15,337
Adjusted gross profit (5)    $      70,087          $      43,495          $           -          $     113,582          $      56,628          $      35,017          $           -          $      91,645



__________________

(1)Includes revenue from closing costs, escrow, title examinations, sales commission
income, as well as bonuses withheld by direct agents.

(2)This expense represents a deduction from the net premiums written for the
amounts that are retained by Direct Agents and Third-Party Agents as
compensation for their efforts to generate premium income for our Underwriting
segment. The impact of premiums retained by our Direct Agents and the expense
for reinsurance or co-insurance procured on Direct Agent sourced premiums are
eliminated in consolidation.

(3) Includes all compensation costs, including salaries, bonuses, incentives
payments and benefits for staff involved in the direct performance of
title and/or escrow services.

(4) Includes title examination fees, office supplies, bonuses and other
taxes.

(5)See “-Non-GAAP Financial Measures-Adjusted Gross Profit” below for a
reconciliation of consolidated adjusted gross margin, which is a non-GAAP
measure, to our gross profit, the most comparable GAAP financial results
measure.

Distribution segment revenue increased by $47.0 million, or 36%, for the year
ended December 31, 2021 compared to the same period in the prior year driven by
the closed order growth of 48% discussed above. Revenue from closed order growth
was somewhat offset by the higher mix of Doma Enterprise closed orders, which
carry a lower price point as compared to the Local channel. Underwriting segment
revenue increased by $132.8 million, or 38%, for the year ended December 31,
2021 compared to the same period in the prior year, reflecting significant
growth in title policies underwritten from both Direct and Third-Party Agents.

Distribution segment adjusted gross profit improved $13.5 million, or 24%, for
the year ended December 31, 2021 compared to the same period in the prior year,
driven principally by closed order growth offset by the higher mix of Doma
Enterprise closed orders, which carry a lower margin as compared to the Local
channel. Underwriting segment adjusted gross profit increased by $8.5 million,
or 24%, for the year ended December 31, 2021 compared to the same period in the
prior year, reflecting increased demand across all channels of the business
offset by increases in direct expenses.

Discussion of the results of the additional key operational and financial indicators – Year
Ended December 31, 2021 Compared to the year ended December 31, 2020

The following table presents our key operating and financial indicators,
including our non-GAAP financial measures, for the periods indicated, and the
changes between periods. This discussion should be read only as a supplement to
the discussion of our GAAP results above. See "-Non-GAAP Financial Measures"
below for important information about the non-GAAP financial measures presented
below and their reconciliation to the respective most closely comparable GAAP
measures.

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                                                                 Year Ended December 31,
                                         2021                 2020              $ Change               % Change
                                          (in thousands, except percentages and open and closed order numbers)
Opened orders                           178,689              136,873              41,816                        31  %
Closed orders                           136,428               92,389              44,039                        48  %
Retained premiums and fees          $   259,598           $  189,671          $   69,927                        37  %
Adjusted gross profit                   113,582               91,645              21,937                        24  %
Ratio of adjusted gross profit to
retained premiums and fees                   44   %               48  %             (4) p.p                     (8) %
Adjusted EBITDA                     $   (71,592)          $  (18,986)         $  (52,606)                      277  %


Opened and closed orders

For the year ended December 31, 2021, we opened 178,689 orders and closed
136,428 orders, an increase of 31% and 48%, respectively, over the same period
in the prior year. Closed orders increased 387% year over year in our Doma
Enterprise channel due to new customer and referral partner acquisitions,
increased wallet share with existing referral partners, and an expanded
geographical footprint. Closed orders decreased slightly by 1% in our Local
channel in the year ended December 31, 2021 compared to the same period in the
prior year due to the contracting refinance market that occurred during the
second half of 2021, which was partially offset by growth in purchase orders.

Premiums and fees withheld

Retained premiums and fees increased by $69.9 million, or 37%, for the year
ended December 31, 2021 compared to the same periods in the prior year, driven
by strong closed order and title policy growth across Direct and Third-Party
Agents, respectively.

Adjusted gross profit

Adjusted gross profit increased by $21.9 million, or 24%, for the year ended
December 31, 2021 compared to the same period in the prior year, due to growth
in retained premiums and fees of $69.9 million in the same period. The growth in
retained premiums and fees was partially offset by investments in fulfillment
infrastructure to support future growth.

Adjusted gross margin ratio on premiums and fees withheld

The ratio of adjusted gross profit to retained premiums and fees decreased 4
percentage points for the year ended December 31, 2021 compared to the same
period in the prior year due to the higher mix of Doma Enterprise closed orders,
which carry a lower price point as compared to the Local channel. Contributing
to the decrease in the ratio was higher direct labor expenses of $27.5 million,
or 44%, for the year ended December 31, 2021 compared to the same period in the
prior year. The rise in direct labor expenses exceeded retained premium and fees
growth as fulfillment labor was hired in advance of future volume growth, and
the organization experienced redundancies in fulfillment staff as it migrated
Local volume to Doma Intelligence.

Adjusted EBITDA

Adjusted EBITDA decreased by $52.6 million, or 277%, to negative $71.6 million
for the year ended December 31, 2021, driven by $74.6 million of higher
operating costs from investments in corporate support functions to successfully
operate as a public company, research and development, and operations and
management staff to support growth and the transformation of the Direct Agents
channel. This was offset by a $21.9 million improvement in adjusted gross
profit.

Non-GAAP Financial Measures

The non-GAAP financial measures described in this prospectus should be
considered only as supplements to the results prepared in accordance with GAAP and
should not be considered substitutes for GAAP results. these

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measures, retained premiums and fees, adjusted gross profit, and adjusted
EBITDA, have not been calculated in accordance with GAAP and are therefore not
necessarily indicative of our trends or profitability in accordance with GAAP.
These measures exclude or otherwise adjust for certain cost items that are
required by GAAP. Further, these measures may be defined and calculated
differently than similarly-titled measures reported by other companies, making
it difficult to compare our results with the results of other companies. We
caution investors against undue reliance on our non-GAAP financial measures as a
substitute for our results in accordance with GAAP.

Management uses these non-GAAP financial measures, in conjunction with GAAP
financial measures to: (i) monitor and evaluate the growth and performance of
our business operations; (ii) facilitate internal comparisons of the historical
operating performance of our business operations; (iii) facilitate external
comparisons of the results of our overall business to the historical operating
performance of other companies that may have different capital structures or
operating histories; (iv) review and assess the performance of our management
team and other employees; and (v) prepare budgets and evaluate strategic
planning decisions regarding future operating investments.

Premiums and fees withheld

The following presents our retained premiums and fees and reconciles the measure
to our gross profit, the most closely comparable GAAP financial measure, for the
periods indicated:

                                                Year Ended December 31,
                                                  2021               2020
                                                    (in thousands)
Revenue                                   $     558,043           $ 409,814
Minus:
Premiums retained by Third-Party Agents         298,445             220,143
Retained premiums and fees                $     259,598           $ 189,671

Less:

Direct labor                                     89,616              62,154
Provision for claims                             21,335              15,337
Depreciation and amortization                    10,321               5,815
Other direct costs(1)                            35,065              20,535
Gross Profit                              $     103,261           $  85,830


________________

(1) Includes title examination fees, office supplies, bonuses and other
taxes.

Adjusted gross profit

The following table reconciles our adjusted gross profit to our gross profit,
the most closely comparable GAAP financial measure, for the periods indicated:

                                       Year Ended December 31,
                                         2021                2020
                                           (in thousands)
Gross Profit                     $     103,261            $ 85,830
Adjusted for:
Depreciation and amortization           10,321               5,815
Adjusted Gross Profit            $     113,582            $ 91,645


Adjusted EBITDA

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The following table reconciles our adjusted EBITDA to our net loss, the most
closely comparable GAAP financial measure, for the periods indicated:

                                                                       Year Ended December 31,
                                                                      2021                    2020
                                                                            (in thousands)
Net loss (GAAP)                                                $    (113,056)            $   (35,103)
Adjusted for:
Depreciation and amortization                                         10,321                   5,815
Interest expense                                                      16,861                   5,579
Income taxes                                                             927                     843
EBITDA                                                         $     (84,947)            $   (22,866)
Adjusted for:
Stock-based compensation                                              20,046                   2,495
COVID-related severance costs                                              -                   1,385
Change in fair value of warrant and sponsor covered shares
liabilities                                                           (6,691)                      -
Adjusted EBITDA                                                $     (71,592)            $   (18,986)

Cash and capital resources

We measure liquidity in terms of our ability to fund the cash requirements of
our business operations, including our working capital and capital expenditure
needs and other commitments. Our recurring working capital requirements relate
mainly to our cash operating costs. Our capital expenditure requirements consist
mainly of software development related to our Doma Intelligence platform.

We had $383.8 million in cash and cash equivalents as of December 31, 2021. We
believe our operating cash flows, together with our cash on hand, and the cash
proceeds from the Business Combination and the related private placement, will
be sufficient to meet our working capital and capital expenditure requirements
for a period of at least 12 months from the date of this Annual Report.

We may need additional cash due to changing business conditions or other
developments, including unanticipated regulatory developments and competitive
pressures. To the extent that our current resources are insufficient to satisfy
our cash requirements, we may need to seek additional equity or debt financing.

Debt

Financing note from seller Lennar

As part of the North American Title Acquisition, Lennar issued us a note for
$87.0 million on January 7, 2019 with a maturity date of January 7, 2029. Cash
interest on the note accrued at one-month LIBOR plus a fixed rate of 8.5% per
annum on a "pay-in-kind" ("PIK") basis. Old Doma repaid the note in full in
January 2021, after making several principal prepayments in 2019 and 2020.

Senior Secured Credit Agreement

In December 2020, Old Doma entered into a loan and security agreement with
Hudson Structured Capital Management Ltd. ("HSCM"), providing for a $150.0
million senior secured term loan ("Senior Debt"), which was fully funded by the
lenders, which are affiliates of HSCM, at its principal face value on January
29, 2021 (the "Funding Date") and matures on the fifth anniversary of the
Funding Date. The Senior Debt bears interest at a rate of 11.25% per annum, of
which 5.0% is payable in cash in arrears and the remaining 6.25% accrues to the
outstanding principal balance on a PIK basis. Interest is payable or compounded,
as applicable, quarterly. Principal prepayments on the Senior Debt are
permitted, subject to a premium, which declines from 8% of principal today to 4%
in 2023 and to zero in 2024.

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The Senior Debt is secured by a first-priority pledge and security interest in
substantially all of the assets of our wholly owned subsidiary States Title
(which represents substantially all of our assets), including the assets of any
of its existing and future domestic subsidiaries (in each case, subject to
customary exclusions, including the exclusion of regulated insurance company
subsidiaries). The Senior Debt is subject to customary affirmative and negative
covenants, including limits on the incurrence of debt and restrictions on
acquisitions, sales of assets, dividends and certain restricted payments. The
Senior Debt is also subject to two financial maintenance covenants, related to
liquidity and revenues. The liquidity covenant requires States Title to have at
least $20.0 million of liquidity, calculated as of the last day of each month,
as the sum of (i) our unrestricted cash and cash equivalents and (ii) the
aggregate unused and available portion of any working capital or other revolving
credit facility. The revenue covenant, which is tested as of the last day of
each fiscal year, requires that States Title's consolidated GAAP revenue for the
year to be greater than $130.0 million. The Senior Debt is subject to customary
events of default and cure rights. As of December 31, 2021, States Title is in
compliance with all Senior Debt covenants.

Upon financing, Old Doma issued penny warrants to HSCM affiliates equivalent to
1.35% of the fully diluted shares of Old Doma. The warrants were exercised net on
Closing Date and such HSCM Affiliates have been granted the right to receive
approximately 4.2 million shares of our common stock.

Other commitments and contingencies

Our commitments for leases, related to our office space and equipment, amounted
to $37.8 million as of December 31, 2021 of which $9.4 million is payable in
2022. Refer to Note 15 to our consolidated financial statements for a summary of
our future commitments. Our headquarters lease expires in 2024. As of
December 31, 2021, we did not have any other material commitments for cash
expenditures. We also administer escrow deposits as a service to customers, a
substantial portion of which are held at third-party financial institutions.
Such deposits are not reflected on our balance sheet, but we could be
contingently liable for them under certain circumstances (for example, if we
dispose of escrowed assets). Such contingent liabilities have not materially
impacted our results of operations or financial condition to date and are not
expected to do so in the near term.

Cash flow

The following table summarizes our cash flows for the periods indicated:

                                                  Year Ended December 31,
                                                    2021                

2020

                                                      (in thousands)
Net cash used in operating activities       $     (56,329)           $ 

(9,274)

Net cash used in investing activities             (23,128)            

(63,033)

Net cash provided by financing activities         351,263              42,661


Operating Activities

In 2021, net cash used in operating activities was $56.3 million driven by the
net loss of $113.1 million, cash paid for prepaid expenses of $6.2 million and
non-cash costs relating to the change in the fair value of warrant and Sponsor
Covered Shares liabilities of $6.7 million. This was offset by increases of
accrued expenses and other liabilities of $17.7 million, increases of the
liability for loss and loss adjustment expenses of $10.5 million, non-cash
stock-based compensation expense of $19.7 million and non-cash depreciation and
amortization of $10.3 million.

In 2020, net cash used in operating activities was $9.3 million driven by the
net loss of $35.1 million and cash paid for prepaid expenses of $2.3 million.
This was offset by increases of accrued expenses and other liabilities of $5.1
million, increases of the liability for loss and loss adjustment expenses of
$7.0 million, non-cash paid in kind interest expense of $6.5 million and
non-cash depreciation and amortization of $5.8 million.

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Investing Activities

Our capital expenditures have historically consisted primarily of costs incurred in
the development of the Doma Intelligence platform. Our other investments
activities generally consist of transactions in investments with fixed maturities
securities to provide regular interest payments.

In 2021, net cash used in investing activities was $23.1 million, and reflected
$36.2 million of purchases of investments offset by $44.3 million of proceeds
from the sale of investments. Cash paid for fixed assets was $32.2 million in
the same period, largely consisting of technology development costs related to
the Doma Intelligence platform.

In 2020, net cash used in investing activities was $63.0 million and reflected
$66.4 million of purchases of investments offset by $18.8 million of proceeds
from the sale of investments. In the same period, cash paid for fixed assets was
$17.0 million, largely consisting of technology development costs related to
Doma Intelligence. We also received $1.6 million from the sale of a title plant
in the same period.

Financing Activities

Net cash provided by financing activities was $351.3 million in 2021, reflecting
$625.0 million in proceeds from the Business Combination and PIPE Investment (as
defined in Note 3) and $150.0 million of proceeds from the Senior Debt. This
increase was offset by $294.9 million in redemptions of redeemable common and
preferred stock and $66.0 million in payment of costs directly attributable to
the issuance of common stock in connection with Business Combination and PIPE
Investment. The net cash provided by financing activities was also offset by the
$65.5 million repayment of the Lennar seller financing note.

Net cash provided by financing activities was $42.7 million in 2020, reflecting
$70.7 million in proceeds from the issuance of Series C preferred stock, offset
by a $28.4 million payment on the Lennar seller financing note.

Significant Accounting Policies and Estimates

Our consolidated financial statements have been prepared in accordance with
GAAP. Preparation of the financial statements requires management to make
several judgments, estimates and assumptions relating to the reported amount of
revenue and expenses, assets and liabilities and the disclosure of contingent
assets and liabilities. We evaluate our significant estimates on an ongoing
basis, including, but not limited to, liability for loss and loss adjustment
expenses, goodwill and accrued net premiums written from Third-Party Agent
referrals, and the Sponsor Covered Shares liability. We consider an accounting
judgment, estimate or assumption to be critical when (1) the estimate or
assumption is complex in nature or requires a high degree of judgment and (2)
the use of different judgments, estimates and assumptions could have a material
impact on our consolidated financial statements. Our significant accounting
policies are described in Note 2 to our annual audited consolidated financial
statements. Our critical accounting estimates are described below.

Liability for claims and claim settlement expenses

Our liability for loss and loss adjustment expenses include mainly reserves for
known claims as well as reserves for IBNR claims. Each known claim is reserved
based on our estimate of the costs required to settle the claim.

IBNR is a loss reserve that primarily reflects the sum of expected losses for
unreported claims. The expense is calculated by applying a loss provision rate
to total title insurance premiums. With the assistance of a third-party
actuarial firm, we determine the loss provision rate for the policies written in
the current and prior years. This assessment considers factors such as
historical experience and other factors, including industry trends, claim loss
history, legal environment, geographic considerations and the types of title
insurance policies written (i.e., real estate purchase or refinancing
transactions). The loss provision rate is set to provide for losses on current
year policies, but due to development of prior years and our long claim
duration, it periodically includes amounts of estimated adverse or positive
development on prior years' policies. The provision rate on prior year policies
will continue to change as actual experience on those specific policy years
develop. As the Company's claims experience matures, we refine estimates on
prior policy years to put more consideration to the Company's actual claims
experience as compared to industry experience. Changes in the loss provision
rate for recent policy years are considered likely and could result

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in a material adjustment to the IBNR reserves. For example, a 50 basis point
increase or decrease in the current estimated 2021 loss provision rate would
result in a $2.8 million corresponding increase or decrease to IBNR.

The estimates used require considerable judgment and are established as
management's best estimate of future outcomes, however, the amount of IBNR
reserved based on these estimates could ultimately prove to be inadequate to
cover actual future claims experience. We continually monitor for any events
and/or circumstances that arise during the year which may indicate that the
assumptions used to record the provision for claims estimate requires
reassessment.

Our total loss reserve as of December 31, 2021 amounted to $80.3 million, which
we believe, based on historical claims experience and actuarial analyses, is
adequate to cover claim losses resulting from pending and future claims for
policies issued through December 31, 2021.

A summary of the Company’s provisions for losses is as follows:

                                  Year Ended December 31,
                                 2021                      2020
                                      ($ in thousands)
Known title claims    $     7,578           9  %    $  4,727      7  %
IBNR title claims          72,621          90  %      64,390     92  %
Total title claims    $    80,199          99  %    $ 69,117     99  %
Non-title claims               68           1  %         683      1  %
Total loss reserves   $    80,267         100  %    $ 69,800    100  %

We continually review and adjust our reserve estimates to reflect losses
experience and any new information that becomes available.

Good will

We have significant goodwill on our balance sheet related to acquisitions as
goodwill represents the excess of the acquisition price over the fair value of
net assets acquired and liabilities assumed in a business combination. Goodwill
is tested and reviewed annually for impairment on October 1 of each year, and
between annual tests if events or circumstances arise that would more likely
than not reduce the fair value of any one of our reporting units below its
respective carrying amount. In addition, an interim impairment test may be
completed upon a triggering event or when there is a reorganization of reporting
structure or disposal of all or a portion of a reporting unit. As of
December 31, 2021, we had $111.5 million of goodwill, relating to the North
American Title Acquisition, of which $88.1 million and $23.4 million was
allocated to our Distribution and Underwriting reporting units, respectively.

In performing our annual goodwill impairment test, we first perform a
qualitative assessment, which requires that we consider significant estimates
and assumptions regarding macroeconomic conditions, industry and market
considerations, cost factors, overall financial performance, changes in
management or key personnel, changes in strategy, changes in customers, changes
in the composition or carrying amount of a reporting unit or other factors that
have the potential to impact fair value. If, after assessing the totality of
events and circumstances, we determine that it is more likely than not that the
fair values of our reporting units are greater than the carrying amounts, then
the quantitative goodwill impairment test is not performed, as goodwill is not
considered to be impaired. However, if we determine that the fair value of a
reporting unit is more likely than not to be less than its carrying value, then
a quantitative assessment is performed. For the quantitative assessment, the
determination of estimated fair value of our reporting units requires us to make
assumptions about future discounted cash flows, including profit margins,
long-term forecasts, discount rates and terminal growth rates and, if possible,
a comparable market transaction model. If, based upon the quantitative
assessment, the reporting unit fair value is less than the carrying amount, a
goodwill impairment is recorded equal to the difference between the carrying
amount of the reporting unit's goodwill and its fair value, not to exceed the
carrying value of goodwill allocated to that reporting unit, and a corresponding
impairment loss is recorded in the consolidated statements of operations.

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We conducted our annual goodwill impairment test as of October 1, 2021. We
determined, after performing a qualitative review of each reporting unit, that
the fair value of each reporting unit exceeded its respective carrying value.
Accordingly, there was no indication of impairment and the quantitative goodwill
impairment test was not performed. We did not identify any events, changes in
circumstances, or triggering events since the performance of our annual goodwill
impairment test that would require us to perform an interim goodwill impairment
test during the year.

Accumulated net premiums issued from third party agent referrals

We recognize revenues on title insurance policies issued by Third-Party Agents
when notice of issuance is received from Third-Party Agents, which is generally
when cash payment is received. In addition, we estimate and accrue for revenues
on policies sold but not reported by Third-Party Agents as of the relevant
balance sheet closing date. This accrual is based on historical transactional
volume data for title insurance policies that have closed and were not reported
before the relevant balance sheet closing, as well as trends in our operations
and in the title and housing industries. There could be variability in the
amount of this accrual from period to period and amounts subsequently reported
to us by Third-Party Agents may differ from the estimated accrual recorded in
the preceding period. If the amount of revenue subsequently reported to us by
Third-Party Agents is higher or lower than our estimate, we record the
difference in revenue in the period in which it is reported. The time lag
between the closing of transactions by Third-Party Agents and the reporting of
policies, or premiums from policies issued by Third-Party Agents to us has been
approximately three months. In addition to the premium accrual, we also record
accruals for the corresponding direct expenses related to this revenue,
including premiums retained by Third-Party Agents, premium taxes, and provision
for claims.

Responsibility for actions covered by the sponsor

The Sponsor Covered Shares, as described in Note 3, will become vested
contingent upon the price of our common stock exceeding certain thresholds or
upon some strategic events, which include events that are not indexed to our
common stock.

We obtained a third-party valuation of the Sponsor Covered Shares as of July 28,
2021 (i.e., the Closing Date) and December 31, 2021 using the Monte Carlo
simulation methodology and based upon market inputs regarding stock price,
dividend yield, expected term, volatility and risk-free rate. The share price
represents the trading price as of each valuation date. The expected dividend
yield is zero as we have never declared or paid cash dividends and have no
current plans to do so during the expected term. The expected term represents
the vesting period, which is 9.6 years years. The expected volatility of 55.0%
was calculated based on the average of (i) the Doma implied volatility
calculated using longest term stock option. (ii) the Doma implied warrant
volatility using the term of the Public and Private Warrants and (iii) median
leverage adjusted (asset) volatility calculated using a set of Guideline Public
Companies ("GPCs"). Volatility for the GPCs was calculated over a lookback
period of 9.6 years years (or longest available data for GPCs whose trading
history was shorter than 9.6 years years), commensurate with the contractual
term of the Sponsor Covered Shares. The risk-free rate utilizes the 10-year U.S.
Constant Maturity. Finally, the annual change in control probability is
estimated to be 2.0%.

From December 31, 2021the liabilities of the actions covered by the sponsor amounted to $5.4
million
.

New accounting statements

For more information on recently published accounting pronouncements, refer to note 2
to our consolidated financial statements included elsewhere in this file.

Accounting Election for Emerging Growth Companies

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (the "JOBS
Act") exempts emerging growth companies from being required to comply with new
or revised financial accounting standards until private companies (that is,
those that have not had a Securities Act registration statement declared
effective or do not have a class of securities registered under the Exchange
Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the
extended transition period

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and comply with the requirements that apply to non-emerging growth companies but
any such election to opt out is irrevocable. The Company has elected not to opt
out of such extended transition period which means that when a standard is
issued or revised and it has different application dates for public or private
companies, the Company, as an emerging growth company, can adopt the new or
revised standard at the time private companies adopt the new or revised
standard. This may make comparison of the Company's financial statements with
another public company which is neither an emerging growth company nor an
emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in
accounting standards used.

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