The Company
Root Insurance is a technology-driven auto insurance company headquartered in Columbus, Ohio. Founded in 2015, Root leverages telematics and data science to offer personalized car insurance rates based on individual driving behavior. Operating in 35 U.S. states, the company aims to disrupt traditional insurance models by providing a seamless, app-based user experience.
Financials
TAM / CAGR
- Total Addressable Market (TAM): The U.S. auto insurance market is estimated at approximately $316 billion.
- Expected CAGR (2024–2028): Approximately 3.5% annually.
Products
| Product | Revenue Contribution (%) |
|---|---|
| Auto Insurance | 95% |
| Renters Insurance | 4% |
| Embedded Insurance via Partners | 1% |
Note: Root’s primary revenue source is auto insurance, with renters and embedded insurance contributing smaller portions.Wikipedia
Customers
Root primarily serves individual drivers seeking personalized auto insurance. The company targets tech-savvy consumers who prefer managing their insurance through a mobile app. Additionally, Root has expanded into embedded insurance offerings through partnerships with companies like Carvana and Goosehead Insurance, allowing customers to purchase insurance seamlessly during the car-buying process.Insurance Journal+1Wikipedia+1
Competitors
- Progressive Corporation: Offers a wide range of insurance products, including auto insurance with usage-based pricing models.
- GEICO: A major auto insurer known for competitive rates and extensive advertising, offering direct-to-consumer policies.
- Lemonade Inc.: An insurtech company providing renters and homeowners insurance with a strong emphasis on technology and user experience.
Main Investors
| Investor | Percentage Holding |
|---|---|
| Carvana | 5% |
| BlackRock | Debt Investor |
| Munich Re | Not Disclosed |
| Odyssey Re | Not Disclosed |
*Note: Carvana invested $126 million for a 5% stake in Root. BlackRock provided a $300 million term loan in 2022.
Founding History
Root Insurance was founded in March 2015 by Alex Timm and Dan Manges in Columbus, Ohio. The company was established with the goal of transforming the auto insurance industry by using technology to offer fair and personalized rates based on driving behavior. In 2020, Root went public on the NASDAQ under the ticker symbol ROOT
Invest Alpha 