New York, California OK rate increases for pet insurance provider Trupanion, and investors cheer

Shares of Trupanion Inc.
TRUP,
-5.73%
jumped after hours on Thursday after the pet-insurance provider announced that California and New York approved double-digit rate increases, saying that the hikes were “necessary in today’s rising cost of veterinary care environment.” California approved a rate increase of more than 12%, while New York approved a requested 18% rate increase, the company said. Margi Tooth, Trupanion’s president, said the company believed “the rising cost of veterinary care will only increase the need for Trupanion in the months and years ahead.” Executives said its full-year forecast, issued on May 4, hadn’t included the approvals from the two states. And they said they were still hoping to deliver positive free cash flow in the fourth quarter, helped by spending cuts and rising vet-care costs. Tooth said the rate approvals were “a net positive to our balance sheet.” Shares rose 16.4% after hours.