Root’s Q1 2022 highlights

Root Insurance shared their Q1 2022 results and here are some highlights:

  • The company ended the quarter with 335,273 auto policies in force, a decrease of 25,017 compared to Q1 2021. When comparing to last quarter, the decline is more significant – Root ended 2021 with 354,371 auto policies so Q1 2022 represents a decrease of ~19k policies.
  • Net loss for the quarter stood at $76.4 million, a $33.5 million decrease compared to Q4 2021.
  • Sales and marketing expense reached $14.7 million, a ~78% decrease compared to Q1 2021. Root has been cutting marketing expenses for several quarters and in Q1 2022 the company spent $10 million less than the prior quarter.
  • Gross written premium for the quarter stood at $187.2 million, a ~7% decrease from the same period last year.
  • Gross accident period loss ratio was 81.4%.

In the earnings call, Root’s co-founder and CEO Alex Timm shared that at the end of the quarter, the first version of the embedded Carvana product was available to roughly 65% of Carvana customers. This channel generated 13% of Root’s new premium volume.

The first version of the Carvana embedded product requires shoppers to visit Root’s website. Based on our analysis of traffic numbers, Carvana referred around 28k visitors to Root between January and March. For context, Carvana sold 105,185 cars in Q1 2022.

Root is working on the second version of the Carvana embedded product, which is expected to launch in the second quarter. This new version will allow customers to quote and buy “Carvana Insurance built with Root” without leaving Carvana’s platform. Here’s a demo of the new version:

The big news (old news for Coverager Research members) is that Root is working on a brokerage product, which will be implemented into Carvana’s platform. Root will feature products by other insurance companies in states where it isn’t licensed and for risks that fall outside of its appetite. Timm says that it is not an aggregator experience – “We are really looking to highly personalize and select the best possible carrier for each customer that comes through our platform.”