•  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

This marks the 28th straight week of jobless claims.

Hundreds of thousands of Americans — 837,000 to be exact — filed for unemployment insurance last week, the Department of Labor said Thursday.

This marks the 28th straight week that initial unemployment claims have reached unprecedented new highs. Since mid-March, the weekly figure has remained above the pre-pandemic record set nearly 40 years ago in 1982.

This week’s figure is slightly less than last week’s (a decrease of 36,000), but remains highly elevated by historical comparisons. Economists have also expressed worry that the weekly initial economic data has stagnated in the past month as a pandemic recession sets in.

Meanwhile, the government also said Thursday that more than 26.5 million people are still claiming some form of unemployment benefits through all programs as of the week ending Sept. 12, an increase from the previous week by nearly 500,000. For the comparable week in 2019, that figure was 1.4 million.

While the new layoffs continue to pile up, the extra $600 a week in federal pandemic relief for the unemployed in the U.S. has long since expired, bringing new pain for those still out of work.

States that saw the largest increases in initial unemployment claims for the week ending Sept. 19 were New York, Georgia and Massachusetts, the Labor Department said Thursday. Maryland, Michigan and Indiana had