Root Inc. reported first quarter net income of $18.2 million to build off results of 2024—its first profitable year.
The net profit for the first three months of 2025 is compared to a net loss of $6.2 million for Q1 2024 and a loss of nearly $41 million in Q1 2023.
The Columbus, Ohio-based parent company of Root Insurance said it grew Q1 gross premiums written 24% year-over-year to about $411 million while maintaining underwriting discipline. The quarter’s combined ratio was 95.6 compared to 102 a year ago.
“While the macroeconomic environment has become more uncertain over the past several months, it nevertheless provides another opportunity to showcase our technological prowess,” said Alex Timm, co-founder and CEO of the insurtech, in a letter to shareholders. “Our technology and data science capabilities enable us to quickly react to prevailing trends and enhance segmentation to continually offer the best prices to the best drivers.”
Timm said personal auto insurance is “essentially a compulsory product for anyone who drives an automobile,” therefore the business is “defensively positioned to withstand times of macro turbulence.”
The direct distribution channel, supported by a mobile telematics feature, continues to see solid results as the partnership channel also grew to make up 33% of new writings in Q1 2025. Root started partnerships with Hyundai Capital America and Experian, including embedded insurance purchasing at point of sale, in Q1. It also has partnerships with Caravan Insurance and Goosehead Insurance.
The insurer is currently active in 35 states for auto insurance and filed in Michigan during the first three months on 2025. The application is pending, as are previous filings in Massachusetts, New Jersey, and Washington.
Additionally, according to the letter, Root has invested in a product to bring its technology to the independent agency channel. “This channel provides access to a larger demographic of customers and we believe it has staying power,” Root said.
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