Auto Insurer Root Reverses Q3 Loss Last Year With $14M Net Income

Root Inc. reported third quarter 2026 net income of $14.4 million, reversing a loss of $5.4 million over the same period a year ago.

For Q3 the combined ratio came in at 97.2 compared with 102.1 a year ago during the same time.

In a letter to shareholders, Root Inc, the parent of insurtech Root Insurance, said competition “intensified” in the personal auto insurance marketplace during the quarter.

Alex Timm, co-founder and CEO, said large insurers “increased marketing, broadened underwriting appetite, lowered average premiums, and competed more aggressively for growth.”

“We remained disciplined in direct and deployed capital only where expected returns met our thresholds,” he said, adding that in Q3, this meant passing on policy growth in the direct channel when returns did not meet Root’s standards.

Still, Root said its partnership channel grew 19% in Q3 and represented 52% of new writings compared with 44% last year in Q3. During the quarter, Root renewed its relationship with Carvana through August 2028 and launched a pilot 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.”

With Root’s expansion to New Jersey in July and Wyoming last month, the insurer is now in 38 states.

Root said it completed development its latest pricing model and began deploying it in the fourth quarter, with the goal of a system that “operates end to end through AI and automation.”

At the end of nine months, net income at Root was $75.7 million compared with $35 million in 2025.