Root Turns Quarterly Loss Into $14.4 Million Profit

Root Inc. said it earned $14.4 million in net income in the third quarter of 2026, a sharp turnaround from a $5.4 million loss in the same period a year earlier.

The company’s combined ratio for the quarter was 97.2, improved from 102.1 a year ago.

In a letter to shareholders, the parent of insurtech Root Insurance said competition in the personal auto insurance market became more intense during the period.

Co-founder and CEO Alex Timm said major insurers ramped up marketing, widened underwriting appetite, lowered average premiums and pushed harder for growth.

“We remained disciplined in direct and deployed capital only where expected returns met our thresholds,” he said, adding that Root passed on some direct-channel policy growth when returns fell short of its standards.

Even so, the company said its partnership channel increased 19% in the quarter and accounted for 52% of new writings, up from 44% a year earlier. Root also extended its agreement with Carvana through August 2028 and started a pilot program with Hyundai.

“The renewal demonstrates the value of embedded insurance to customers at scale,” Timm wrote. “Vehicle buyers should not have to leave a high-intent purchase to complete a separate insurance process.”

Following its expansion into New Jersey and Wyoming, Root now operates in 38 states.

The insurer said it finished building its latest pricing model and began rolling it out in the fourth quarter, with the aim of creating a system that operates end to end through AI and automation.

After nine months, Root reported net income of $75.7 million, compared with $35 million in the prior year.

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