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Root Insurance, a US-based insurtech, has filed for an IPO

Root Insurance, a US-based insurtech, has filed for an IPO

  •  Root Insurance is targeting a $6 billion valuation in an upcoming IPO.
  • It’ll likely succeed thanks to its improving loss ratio and the increasing demand for usage-based auto insurance.
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The US-based insurtech has filed for an IPO, per TechCrunch. Root has raised a total of $523 million in funding to date and is valued at $3.7 billion, though it’s targeting a $6 billion IPO valuation. The full-stack insurtech sells auto, renters, and homeowners insurance, and is currently available in 29 states.

the global usage based insurance market

Root Insurance is targeting a $6 billion valuation in an upcoming IPO.

Business Insider Intelligence


Root is disrupting the $266 billion auto insurance industry through its use of IoT and AI, and has expanded its coverage to break into other markets. The insurtech collects users’ behavioral data via its mobile app to measure their driving behavior, such as hard braking and speed, to more accurately price each user’s policy. Good drivers save up to 52% compared with traditional insurance options.

The data is processed through machine learning (ML) and helps Root avoid high-risk drivers, decreasing the number of claims it has to pay by 45%. Root expanded its coverage to renters and  homeowners insurance last year, aiming to cross-sell these policies with auto, thus generating additional premiums without having to substantially raise marketing costs. In addition, users can customize and purchase policies, find their insurance card, make changes to their policy, and file a claim all through the Root app—creating a seamless customer experience.

We expect the IPO raise to be a success, as Root is improving its financials and the coronavirus pandemic is encouraging the use of usage-based insurance.

Root’s loss ratio is decreasing

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