In 2019, Root raked in $290.2 million in revenue and posted a net loss of $282.4 million. It turns out that the first six months of 2020 were profitable for Root, generating revenue of $245.4 million with a net loss of $144.5 million. The company currently has $200 million in debt.
Root CEO expects large market-share shifts in the auto insurance industry
In an interview with Reuters, Root co-founder and CEO Alexander Timm said, “There will be some short-term noise from COVID – with less driving – but I think that will normalize.” He added, “You’re going to see pretty large market-share shifts (in the automotive insurance industry), that are driven by competitors that have modern technology.”
Root’s record-breaking IPO in the car insurance industry points to the technological future of car insurance, which older and more established car insurance firms will have to eventually to shift towards.
Especially with the COVID-19 pandemic, Root’s contactless method for getting customers quotes from their smartphones certainly has played a role in the company’s profits throughout the first six months of 2020.
