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ROOT, Root Inc.
Root is a technology insurance company founded on the idea that car insurance rates should be based primarily on driving behaviors, not demographics.
We are revolutionizing the archaic car insurance industry by using modern technology, data science, and telematics to offer fair, personalized rates to good drivers.
Our primary focus is the United States personal auto insurance market.
The business
What it sells, where the money comes from, the kind of company it is.
Next report By 11/8 · the 10-Q for the quarter ended late September · due within 40 days of period end · has filed ~36 days after · the wire records it on arrival
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Underwriting discipline and the float. What decides it: whether the combined ratio stays below 100% so the policies make money on their own, how large the float is against equity, and what that float earns once it is invested. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- The underwriting result is not cleanly tagged in the filings. The float runs about 1.2× equity, the leverage that magnifies both the underwriting and the investing. Whether the discipline holds through a soft market, and how the float is invested, are what the 10-K decides.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2018–2025
realized figures from each filing · older years to the left| 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMJun 2026 | |
|---|---|---|---|---|---|---|---|---|---|
| Income statement | |||||||||
| $43M | $290M | $347M | $345M | $311M | $455M | $1.2B | $1.5B | $1.6B | RevenueRevenue |
| $74M | $369M | $239M | $345M | $269M | $573M | $1.2B | $1.5B | — | Premiums written (net)Prem. written |
| $40M | $275M | $323M | $310M | $286M | $400M | $1.1B | $1.4B | $1.5B | Premiums earnedPremiums |
| $1M | $5M | $5M | $5M | $6M | $30M | $36M | $34M | $29M | Investment incomeInv. inc. |
| ($69M) | ($282M) | ($363M) | ($521M) | ($298M) | ($147M) | $31M | $41M | — | Pretax incomePretax |
| ($69M) | ($282M) | ($363M) | ($521M) | ($298M) | ($147M) | $31M | $40M | $61M | Net incomeNet inc. |
| — | — | — | — | — | — | 0% | 1% | 1% | Effective tax rateTax rate |
| Cash flow & returns | |||||||||
| ($26M) | ($127M) | ($287M) | ($403M) | ($211M) | ($34M) | $196M | $207M | $195M | Operating cash flowOp. cash |
| ($27M) | ($132M) | ($289M) | ($408M) | ($211M) | ($34M) | $195M | $207M | $195M | Owner earningsOwner earn. |
| 7% | 4% | 5% | 9% | 8% | 9% | 3% | 7% | 9% | Expense ratioExpense |
| ($200K) | $9M | $21M | ($14M) | $3M | ($7M) | ($19M) | ($29M) | — | Prior-yr reserve developmentReserve dev. |
| — | — | -35% | -97% | -107% | -89% | 15% | 14% | 19% | Return on equityROE |
| — | — | −35% | −97% | −107% | −89% | 15% | 14% | 19% | Retained to equityRetained/eq |
| $0 | $0 | $200K | $0 | $0 | — | — | — | — | BuybacksBuybacks |
| ($21M) | ($114M) | ($114M) | $77M | ($17M) | ($46M) | ($154M) | ($92M) | — | Investing cash flowInv. cash |
| $151M | $536M | $1.1B | ($80M) | $283M | ($4M) | ($121M) | ($25M) | — | Financing cash flowFin. cash |
| $104M | $294M | $697M | ($407M) | $56M | ($83M) | ($79M) | $90M | — | Change in cashΔ cash |
| Balance sheet | |||||||||
| — | $123M | $225M | $135M | $133M | $171M | $311M | $391M | $517M | Investments (total)Investments |
| $22M | $122M | $158M | $241M | $211M | $240M | $191M | $256M | — | Float (net reserves)Float |
| — | $729M | $1.8B | $1.3B | $1.3B | $1.3B | $1.5B | $1.7B | $1.7B | Total assetsAssets |
| — | $542M | $730M | $671M | $924M | $1.1B | $1.2B | $1.3B | — | Total liabilitiesTotal liab. |
| $190M | $560M | $0 | $112M | $112M | $112M | $112M | $112M | — | Redeemable interestsRedeemable |
| ($103M) | ($374M) | $1.0B | $536M | $277M | $166M | $204M | $284M | $328M | Shareholders’ equityEquity |
| Per share | |||||||||
| 3.2M | 4.2M | 4.2M | 13.8M | 14.1M | 14.4M | 16.9M | 17.1M | 17.1M | Shares out (diluted)Shares |
| $-21.85 | $-66.64 | $-86.43 | $-37.76 | $-21.11 | $-10.24 | $1.83 | $2.36 | $3.58 | EPS (diluted)EPS |
| $-8.44 | $-31.17 | $-68.81 | $-29.57 | $-14.94 | $-2.35 | $11.56 | $12.08 | $11.37 | Owner earnings / shareOE/sh |
| $-32.47 | $-88.26 | $245.57 | $38.87 | $19.65 | $11.51 | $12.05 | $16.63 | $19.18 | Book value / shareBVPS |
Share counts before 2020 are restated ×1/8 for a stock split, so per-share figures sit on one basis.
The diluted share count moved ×3.29 into 2021 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
| 7-yr | 5-yr | |
|---|---|---|
| Revenue / share | +30.6%/yr | +1.4%/yr |
| Book value / share | — | −41.6%/yr |
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Is it a good business?
- Not enough dataIndustry peers: median 97%
What this means
Premiums or claims weren't found in the filing data.
- Return on equity 14%SolidNet income $40M ÷ equity $284MIndustry peers: median 18%
What this means
What it earns on shareholders' capital, the underwriting result plus what the float earns invested. Durably above the ~10% cost of equity is what compounds book value.
The float
- Float $193M0.7× equityNet reserves + unearned premiums − prepaid reinsurance − receivables − DAC = $193M
What this means
Money held against future claims and invested in the meantime. Buffett's insight was that good underwriting makes this float cost less than nothing, a pool of other people's money the owners earn on. Basis note: net reserves derived as gross less recoverables. The larger it is against equity, the more that leverage works, for better or worse.
- Investment income $34M17.5% on the floatNet investment income $34M, 17.5% on the float
What this means
What the float and capital earned this year. This is the second engine: an insurer that breaks even on underwriting still wins if the float is large and invested well.
The cost and the reserves
- Not enough data
What this means
Needs the full float arithmetic and a cleanly tagged underwriting total; a partial figure would mislead.
- Reserve development −$29MPast promises heldPrior-year development, FY2025: favorable (reserves released) · record: 5 favorable, 3 unfavorable of 8
What this means
Each year an insurer restates what its old accident years actually cost. Persistent favorable development means management reserved honestly and released the cushion; persistent unfavorable development means past profits were overstated by under-reserving — the industry's chronic sin, and the single most tell-tale line an owner can read. Signed as the company files it: negative favorable, positive unfavorable.
All figures as filed; the source filing is linked above.
Management, ownership & pay
read the proxy →From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.
| Fiscal year | Pay, as filed | “Actually paid” | Owner earnings |
|---|---|---|---|
| 2021 | $5.8M | −$25.2M | ($408M) |
| 2022 | $5.1M | −$3.0M | ($211M) |
| 2023 | $8.7M | $9.7M | ($34M) |
| 2024 | $10.7M | $33.6M | $195M |
| 2025 | $8.2M | $14.1M | $207M |
Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.
- Stock-based compensation$40M
The slice of the business handed to employees in shares in fiscal 2025, 2.6% of revenue, equal to 64.9% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
What an owner would ask, FY2025
read the 10-K →- Which reported numbers are a judgment call?Management names Income taxes, Insurance reserves as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Insurance — Property & Casualty
The same industry, side by side on the underwriting lens. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Combined ratiomedian over the record | Loss ratiomedian over the record | Yield on floatmedian over the record | ROTCEmedian over the record |
|---|---|---|---|---|---|
| RLIRLI Corp | $1.9B | 90% | 48% | 4.3% | 21% |
| KNSLKinsale Capital Group Inc. | $1.9B | — | 57% | 3.9% | 18% |
| UVEUNIVERSAL INSURANCE HOLDINGS INC | $1.6B | 104% | 73% | 4.7% | 18% |
| ROOTRoot Inc. | $1.5B | — | — | 3.7% | -62% |
| SKWDSkyward Specialty Insurance Group Inc. | $1.4B | 94% | — | 4.7% | 15% |
| UFCSUnited Fire Group Inc. | $1.4B | 103% | 70% | 4.1% | 4% |
| SAFTSafety Insurance Group Inc. | $1.3B | 97% | 65% | 7.7% | 11% |
| SLDESlide Insurance Holdings Inc. | $1.2B | — | — | 5.2%2y | 44%2y |
| Group median | — | — | — | 4.5% | 16% |
The price
What a price has to assume.
What the price implies
price / tangible bookAn insurer is worth a multiple of its tangible book value, and the multiple it deserves is set by the return it earns on that book. Type today’s price; we show what you would be paying against what Root Inc.’s record justifies.
Tangible book / share, delivered−39%/yr’20→’25
The justified multiple is (return on tangible equity − growth) ÷ (cost of equity − growth). An insurer earning exactly its cost of equity is worth about one times tangible book; the premium above that prices each point of durable excess return. A higher cost of equity lowers the justified multiple for an insurer.
Enter a price above to run it.
Graham applied the same standards to financial enterprises (Intelligent Investor ch.14): the 15× multiple cap on averaged earnings, and P/E times price-to-book at most 22.5. The gate marks the bargain-hunter’s floor, not a verdict.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Tangible book $328M on 16M shares, a −62% normalized return on it. The dials set the multiple such a return would justify; your price sets the multiple you are paying. It assumes the insurer keeps earning that return; an underwriting cycle, a reserve shortfall or a bad year on the float changes it, which is what the record and the 10-K are for.
Manual order: ← ROL its page in the Manual ROP →
Industry order: ← RNR the Insurance — Property & Casualty chapter SAFT →