Update: Root’s agency channel
Last week we reported that Root is going after independent agents. Today, we have some new information to share regarding Root’s emerging agency channel.
According to several sources, Root has been quietly working with Goosehead Insurance in some states. The insurer is currently limiting agent appointments so it isn’t available to every Goosehead agent. We reached out to both Root and Goosehead for a comment but haven’t heard back.*
Based on information obtained by Coverager, Root’s early interaction with the agency channel hasn’t been successful. It’s no secret that telematics and independent agents have a complicated relationship and Root is looking for ways to make their product more compelling. We’ve learned that Root is tweaking the existing telematics offering but also considering a traditional car insurance product that will be a better fit for the agency channel.
We’ve covered Root extensively in the past. The startup was able to show impressive growth leading to its IPO but it now faces significant challenges around customer acquisition and retention. Root’s telematics product adds friction before and after the purchase, and the average customer stays with the company for just 13 months. The insurer is also known for attracting mostly male customers in a lower income bracket.
Going after agents and potentially adding a traditional product to the mix will give Root more options to play with but it will also impact their relationship with investors who were promised a different kind of insurance company.
*Update: Root has sent Coverager the following statement in response to this story: “While Root is committed to our proven direct to consumer model, we are piloting a program with a small number of independent licensed agents to offer fair coverage to even more people across the nation. By working with independent agents, we aim to provide our uncomplicated, easy-to-use app-based insurance to drivers who prefer to work with an agent for their insurance needs. And that means more good drivers can enjoy Root’s affordable, reliable coverage.”