Earnings

Root's Profitability Cools After a Record First Quarter

The Tip Desk · November 11, 2026 · 2 min read

Net income was $14 million and revenue $381 million as the auto insurer held 484 thousand policies in force.

Root, Inc. (ROOT), the Columbus-based personal auto insurer, reported $14 million of net income for the third quarter, down from $25 million in the second quarter, as revenue slipped to $381 million from $389 million.

The company said it generated $34 million of adjusted EBITDA and approximately 18% annualized return on equity, after about 31% annualized return on equity in the prior quarter.

Policies in force ended the quarter at 484 thousand, unchanged from the prior quarter and up 4% from a year earlier. Gross written premium was $358 million and gross earned premium $356 million. The company said those premium figures reflected lower premium per policy and continued discipline in the Direct channel as large carriers increased marketing, broadened underwriting appetite, lowered average premiums, and competed more aggressively for growth.

During the quarter, Root said it intentionally traded off incremental policy growth in Direct when expected returns fell below its threshold.

Underwriting remained profitable. The net combined ratio was 97.2%, improving 4.9 points from a year earlier. The gross accident period loss ratio was 61.1%, which the company said was within its long-term target range of 60% to 65%.

Partnership new writings, including independent agents, grew 19% year over year and represented 52% of total new writings, up from 44% in the prior-year period. Partnership growth had been nearly 30% year over year in the first quarter.

In August, Root renewed and extended its commercial relationship with Carvana through August 2028. The company said that since September 2022 through August 2026, more than 250,000 Root policies have been written through Carvana’s integrated insurance experience.

In October, Root launched the Hyundai Secure+ Powered by Root pilot in 14 Phoenix-area Hyundai dealerships, offering six months of Root auto insurance at no cost to eligible customers who purchase or lease a new Hyundai through Hyundai Capital America and qualify under Root’s underwriting criteria.

Following a July New Jersey launch that had taken the company to 37 states, Root expanded into Wyoming in October, bringing it to 38 states and, the company said, approximately 82% of the U.S. population.

Root completed development of its latest proprietary pricing model and began deploying it in the fourth quarter. The company said it expects the model to deliver its largest improvement in predictive power to date.

The company repurchased $36.2 million of shares, excluding transaction costs, under its $75 million authorization, after more than $20 million of repurchases in the prior quarter.

Root said it is laying the foundation for the next phase of expected profitable growth and that it cannot control when competitive conditions will shift.

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