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NEW YORK - Root Inc . (NASDAQ:ROOT) shares soared 15% in after-hours trading Wednesday after the insurtech company reported a surprise profit for the fourth quarter of 2024, significantly beating analyst expectations.
The Columbus (WA:CLC), Ohio-based auto insurer posted adjusted earnings per share of $1.30, compared to the analyst consensus estimate of a $0.52 loss. Revenue for the quarter came in at $326.7 million, surpassing the $291.34 million analysts had projected.
Root’s strong performance was driven by a 21% increase in policies in force to 414,862 and an 18% rise in gross premiums written to $331 million compared to the same quarter last year. The company’s gross combined ratio improved 19 percentage points to 90.6%, while the net combined ratio improved 20 points to 91.5%.
“Ten years ago, we believed we could build a better insurance company by meeting consumers where they were with delightful experiences at a great price all by leveraging data science machine learning," Alex Timm, Co-Founder & CEO commented. "Our 2024 results demonstrate the effectiveness of these principles, showing profitability, strong growth, a stellar loss ratio, and an extensive partnership pipeline—all within a decade of our founding."
For the full year 2024, Root reported net income of $31 million, a significant improvement from a loss of $147 million in 2023. The company’s gross premiums written increased 66% to $1.3 billion for the year.
Root attributed its success to its proprietary technology platform and data science algorithms, which have enabled strong underwriting performance, as evidenced by its 58.9% gross loss ratio in 2024.
Looking ahead, the company plans to continue investing in its pricing and underwriting technology while focusing on profitable growth across its distribution channels.
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