Root Insurance

Root Insurance is a mobile auto insurance that provides personalised cover to drivers based on their driving habits, requiring all of its customers to take a driving behaviour test before they are offered a quote.

The Root mobile app monitors driving behaviour for two to three weeks, analysing both good and bad habits across various activities, including acceleration, braking, turns and hours driven. Once the test is complete, Root provides good drivers with a recommended plan based on the results. If the user has driven particularly well during the test period, they can achieve higher savings (up to 50%), whereas drivers with bad scores are not offered cover. As of 2019, too, Root offers insurance from day one via an initial offer that is later finalised after a 30 day test drive.

In August 2019 Root joined the Verisk Data Exchange, which enables the insurtech to gain access to driving data (given consensually from drivers) to enhance its UBI program and scoring model. It also plans to use Verisk's Discount Alert product, which helps keep insurance rates competitive.

The venture also offers discounts to drivers of cars with automated driving features, and all drivers can use the mobile app to manage their policy and file claims directly. In 2019, the usage-based car insurer wrote $106M in direct written premiums in 2018, up from $4M in 2017, with $51M coming in Q4'18.

Root Insurance, founded in 2015, has received funding from Redpoint, Ribbit Capital and Drive Capital, amongst others. Following its recent financing, the startup insurer began expanding across the U.S. Now available in 27 states, the insurer operates over $100 million in written premiums, and looks to grow its workforce by 150% and become a nationwide insurer within the next year.

In 2019, Genpact and Root announced a partnership with a view to further Root's vision of reinventing the auto insurance industry. The alliance will focus on optimising efficiency of claims processing, further improving the Root customer experience, and driving competitive growth.

Root also partnered with OwlCam in 2019, launching a pilot in which it offered a select number of Root customers the Owl security and safety system, which includes a security camera specifically for vehicles.

In 2019 Root raised $350m in Series E funding, which was led by new investors Coatue Management and DST Global, as well as its existing investors. The latest round of funding puts the valuation of the company at a reported $3.65bn.

In November 2019 Root launched Renters insurance for the first time. Initially available to existing Root auto insurance customers in Missouri, Ohio and Utah, it will expand to non-Root auto customers over the following months. The new insurance is available from around $6 per month, and consumers can bundle their auto and renters insurance plans for better rates.

Root launched a free roadside assistance tool through its new mobile app, Myles, in February 2020. Users can earn the free 24/7 emergency assistance simply by driving, earning 10 points a day. A call out uses 500 points, however on first download, users receive 540 points, meaning the service is available immediately. Root has previously launched another digital auto accessory, On My Way, which allows users to let friends and family track when they are driving and when they arrive at their destination.

The following month Root announced the launch of Root Enterprise, which aims to improve the way commercial companies assess and manage driving risks. The company stated 'Root Enterprise can capture leading risk/cause of accidents, such as distracted driving, which older, plug-in devices cannot measure' and claims its platform are '8x more predictive than other leading telematics platforms'.

In June 2020 Root announced the launch of its Homeowners insurance. Initially available in 13 states, Root will offer a bundle discount to those who already have an auto policy with the company.

Root raised $724.4m in its October IPO, with 26.8m shares priced at $27 each - above its target range. It had originally been targetting $22-25 per share, with a sale of around 24.6m shares. Lemonade was valued at $1.6bn in an IPO that raised $319m back in July.

In June 2021 Root launched RootReady, an initiative which is enabling new customers who own connected General Motor vehicles to use their car's driving data to see whether they qualify for their UBI program. Previously, the company had required consumers to take a test drive, however GM smart car owners will have the option to skip the test on the Root app.

Root laid off 330 team members in January 2022, citing the pandemic and the economy as reasons behind loss cost increases. The company's shares hit $1.83 around the same time (having previously had highs of $27)

Root partnered with AI solution provider Tractable in January 2022, leveraging the latter's AI Subro solution to streamline and accelerate its claims operations.

In May 2022 Root indicated that it is looking to offer its brokerage technology to other insurers as an embeddable solution. Later in November 2022 the company laid off 160 employees in its second such round of redundancies during the year after 330 other employees were let go. 

During January 2023 Root began investigating $9.5m in unauthorized payments made by a former employee.