Root (ROOT) TD Financial Services & Fintech Summit summary

Technology and operational innovation

• Automated core insurance functions, including claims, policy management, and pricing, using a modern technology stack for rapid response to market changes.

• Real-time reserve and rating models enabled early detection of cost inflation, allowing swift rate adjustments and filings.

• Machine learning and annual retraining of loss cost models improved risk segmentation and pricing accuracy by 10%-20%.

• Highly integrated in-house telematics and data pipelines enhance predictive power and pricing efficiency.

• Incumbents struggle to match this integration due to legacy systems, limiting their ability to leverage AI and machine learning.

Financial performance and growth

• Achieved industry-leading loss ratios, with a gross loss ratio of 60.6% and net combined ratio of 102 in Q1.

• Net written premium grew from $135 million to $331 million year-over-year, with new business writings up 338%.

• Share price increased over 400% since January 1, attributed to strong results and technology-driven performance.

• New business penalty is present but manageable, already reflected in current loss ratios.

• Focus remains on sustainable growth and maintaining loss ratios between 60%-65%.

Strategic approach and profitability outlook

• No fixed combined ratio target; growth decisions are based on unit economics and long-term value rather than budget constraints.

• Profitability is expected as operating leverage increases with scale, but no strict timeline is set.

• In 5-10 years, expects a combined ratio below 100, with growth driven by positive unit economics.

• Willing to adjust growth pace in response to market conditions to ensure returns meet targets.