Hyundai pays the premium as Root pulls back from direct auto
Root Insurance reported third-quarter 2026 net income of $14.4 million, compared with a $5.4 million loss a year earlier, marking its fourth consecutive profitable quarter. Revenue declined to $381 million from $388 million, while adjusted EBITDA was nearly unchanged at $33.5 million.
Gross written premiums fell 8% to $357.5 million, reflecting lower premiums per policy and a deliberate pullback in the direct channel as larger carriers competed more aggressively. Premiums per policy fell 9% to $1,441. Policies in force rose 4% to 484,037. The net combined ratio improved to 97.2% from 102.1%.
“Personal auto competition intensified during the quarter as large carriers increased marketing, broadened underwriting appetite, lowered average premiums, and competed more aggressively for growth. We remained disciplined in Direct and deployed capital only where expected returns met our thresholds. In a cyclical insurance market, that discipline is a prerequisite for compounding value.”
Partnership new business, including independent agents, grew 19% and accounted for 52% of total new writings, up from 44%. Root extended its Carvana agreement through August 2028; the integration generated more than 250,000 policies between September 2022 and August 2026.
In October, Root launched a pilot at 14 Phoenix-area Hyundai dealerships, offering eligible customers six months of insurance at no cost when financing or leasing a new Hyundai through Hyundai Capital America. The program may extend beyond Arizona: on Nov. 2, Root filed a premium assistance endorsement in Kansas, telling regulators an unnamed “top 5 vehicle manufacturer” requested its help bringing the program there. The form, which lets a third-party sponsor pay all or part of a policyholder’s premium, is already approved in nine states, including Arizona.
Root entered Wyoming, expanding to 38 states. It began deploying a new pricing model in the fourth quarter and said it is adapting its direct quoting experience for AI shopping agents.
“We already acquire customers in environments where price and speed matter and are adapting our Direct quote experience for emerging agentic tools. Together, these capabilities position Root to win as agentic commerce scales.”
