Root's Combined Ratio Improves to 91.7% as Premium Growth Slows

โดย Zacks Investment Research·

Summary · why it matters

Root, Inc. reported improved first-half 2026 underwriting economics even as its premium growth cooled, with the net combined ratio improving to 91.7% from 95.4% a year earlier and the net loss and loss adjustment expense ratio improving to 64.1% from 65.1%. Adjusted EBITDA rose to $100.6 million from $69.5 million, and the company ceded about 1.5% of gross premiums earned in the first half, down from 5.8% a year earlier, allowing it to retain more premium. Gross written premium declined 3.7% in the first half of 2026 as Root cut customer acquisition that failed to meet its return thresholds, with direct performance marketing spending falling $35.4 million year over year. Policies in force still increased 6.2% year over year to 483,921 at second-quarter end, but management expects the 2026 year-end count to be relatively flat if current competition persists, while premiums per policy fell to $1,479 from $1,616 and the first-half gross accident-period loss ratio rose to 59.7% from 56%. Partnerships and independent agents represented about 51% of second-quarter new writings, up from about 44% a year earlier, and Root was active in 37 auto insurance markets as of August 2026, covering more than 80% of the U.S. population and targeting a near-national footprint by the end of 2027. Root currently carries a Zacks Rank #3 (Hold), and the Zacks Consensus Estimate for 2026 has risen 36% in the last 30 days.