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ROOT's Policy Growth Steady: Will it Fuel Premium Acceleration?
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Key Takeaways
ROOT's policies-in-force doubled from 0.2M in 2022 to 0.4M in Q2 2025, boosting premium growth.
Geographic expansion, partnerships and direct channel growth are driving ROOT's PIF momentum
ROOT shares are up 27.1% YTD, with consensus estimates projecting strong revenue and EPS growth.
Root Inc.’s (ROOT - Free Report) policies-in-force (“PIF”) are an important growth indicator, reflecting the total number of active insurance policies. Being a technology-driven car insurer, ROOT leverages mobile technology and data science to underwrite coverage. Improving PIF, coupled with prudent rates, thus amplifies premium revenues. Root’s PIF has been exhibiting steady growth over the years, from 0.2 million at 2022 end to 0.4 million at the end of the second quarter of 2025.
Increasing PIF signals ROOT’s solid retention ratio as well as new policy writings, driven by market presence, brand awareness, technology and strategic partnerships. Root’s growth strategy is driven by geographic expansion, diversification of distribution channels and targeted investments in high-yield opportunities, which contribute to a consistent rise in policies in force. The Partnership channel has seen strong momentum, driven by growth in automotive, financial services, and agent sub-channels, while disciplined customer acquisition continues to drive the Direct channel.
The insurer believes "the $300 billion U.S. auto insurance market is ripe for disruption." Thus, to benefit from the opportunity, it stays focused on improving retention and accelerating PIF by diversifying distribution channels and launching additional states. Root has partnered with major platforms such as Carvana to embed insurance offerings at the point of car purchase. On its recent earnings call, ROOT stated that it intends to continue investing in key strategic areas, expand its national footprint, enhance its product suite and deepen its data science and technology capabilities. These investments should accelerate PIF growth.
Continued growth in PIF will help it attain a competitive edge, benefiting premium volumes. This, along with prudent underwriting and technological advancement, will help ROOT sustain profitability.
What About Other Players?
Policies in force of The Allstate Corporation (ALL - Free Report) and The Progressive Corporation (PGR - Free Report) , two other auto insurers, have been increasing, driving premiums.
During the second quarter of 2025, Allstate’s PIF was 37.9 million, driven mainly by an increase in auto and homeowners' PIF. Solid brand presence, prudent pricing and improved distribution through both direct and agency channels, enforcing strong retention, should drive Allstate going forward.
Progressive’s PIF has been exhibiting steady growth over the years, particularly in personal auto and commercial lines. Increasing PIF signals Progressive’s leading market presence, distribution innovation and underwriting technology, and the application of quantitative analytics in pricing and risk selection.
ROOT’s Price Performance
Shares of ROOT have gained 27.1% year to date, outperforming the industry.
Image Source: Zacks Investment Research
ROOT’s Expensive Valuation
ROOT trades at a price-to-book value ratio of 5.83, above the industry average of 1.57. But it carries a Value Score of A.
Image Source: Zacks Investment Research
Estimate Movement for ROOT
The Zacks Consensus Estimate for ROOT’s third-quarter and fourth-quarter 2025 EPS witnessed no movement in the past 60 days. The same for full-year 2025 and 2026 has increased 219.8% and 136.8%, respectively.
Image Source: Zacks Investment Research
The consensus estimates for ROOT’s 2025 and 2026 revenues and EPS indicate year-over-year increases.
Image: Bigstock
ROOT's Policy Growth Steady: Will it Fuel Premium Acceleration?
Key Takeaways
Root Inc.’s (ROOT - Free Report) policies-in-force (“PIF”) are an important growth indicator, reflecting the total number of active insurance policies. Being a technology-driven car insurer, ROOT leverages mobile technology and data science to underwrite coverage. Improving PIF, coupled with prudent rates, thus amplifies premium revenues. Root’s PIF has been exhibiting steady growth over the years, from 0.2 million at 2022 end to 0.4 million at the end of the second quarter of 2025.
Increasing PIF signals ROOT’s solid retention ratio as well as new policy writings, driven by market presence, brand awareness, technology and strategic partnerships. Root’s growth strategy is driven by geographic expansion, diversification of distribution channels and targeted investments in high-yield opportunities, which contribute to a consistent rise in policies in force. The Partnership channel has seen strong momentum, driven by growth in automotive, financial services, and agent sub-channels, while disciplined customer acquisition continues to drive the Direct channel.
The insurer believes "the $300 billion U.S. auto insurance market is ripe for disruption." Thus, to benefit from the opportunity, it stays focused on improving retention and accelerating PIF by diversifying distribution channels and launching additional states. Root has partnered with major platforms such as Carvana to embed insurance offerings at the point of car purchase. On its recent earnings call, ROOT stated that it intends to continue investing in key strategic areas, expand its national footprint, enhance its product suite and deepen its data science and technology capabilities. These investments should accelerate PIF growth.
Continued growth in PIF will help it attain a competitive edge, benefiting premium volumes. This, along with prudent underwriting and technological advancement, will help ROOT sustain profitability.
What About Other Players?
Policies in force of The Allstate Corporation (ALL - Free Report) and The Progressive Corporation (PGR - Free Report) , two other auto insurers, have been increasing, driving premiums.
During the second quarter of 2025, Allstate’s PIF was 37.9 million, driven mainly by an increase in auto and homeowners' PIF. Solid brand presence, prudent pricing and improved distribution through both direct and agency channels, enforcing strong retention, should drive Allstate going forward.
Progressive’s PIF has been exhibiting steady growth over the years, particularly in personal auto and commercial lines. Increasing PIF signals Progressive’s leading market presence, distribution innovation and underwriting technology, and the application of quantitative analytics in pricing and risk selection.
ROOT’s Price Performance
Shares of ROOT have gained 27.1% year to date, outperforming the industry.
Image Source: Zacks Investment Research
ROOT’s Expensive Valuation
ROOT trades at a price-to-book value ratio of 5.83, above the industry average of 1.57. But it carries a Value Score of A.
Image Source: Zacks Investment Research
Estimate Movement for ROOT
The Zacks Consensus Estimate for ROOT’s third-quarter and fourth-quarter 2025 EPS witnessed no movement in the past 60 days. The same for full-year 2025 and 2026 has increased 219.8% and 136.8%, respectively.
Image Source: Zacks Investment Research
The consensus estimates for ROOT’s 2025 and 2026 revenues and EPS indicate year-over-year increases.
ROOT stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.