Hot on the heels of Lemonade’s IPO this summer, Root has now added its name to the list of InsurTechs going public in 2020.
Root filed to go public earlier this week and is targeting a $6bn valuation, according to TechCrunch.
While Lemonade focuses on property and casualty insurance, Root is more at home in the auto and rental insurance space. The first one has been identified as its biggest revenue stream whereas the rental segment of the company is a relatively new addition to the company’s offering, according to the filings.
Root’s solution will sound familiar to those in the industry. It is leveraging artificial intelligence and the internet of things to track users’ driving behaviours. The data is then used to give customers an insurance policy that is more reflective of their driving style.
Root’s active automotive policies grew from 111,736 in 2018 to 281,310 in 2019, representing a 152% year-on-year growth.
Then, between June 30 2019 and June 30 2020, that number grew from 220,536 to 334,327, representing a 52% annual growth.
Root reduced its net loss this year and decreased its loss ratio from 96.4% in June 2019 to 81.3% in June 2020, according to Business Insider.
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