“`html
Root Inc reported a net combined ratio of 94.2% for 2024, reflecting a significant improvement of 3,680 basis points year-over-year. This performance continued to strengthen in the first half of 2025 with an additional 700-basis-point gain, signaling strong underwriting discipline and operational scalability. The company aims to maintain its combined ratio below 100% to reduce dependence on investment income.
Root, primarily focused on auto insurance, leverages AI and machine learning to improve pricing and operational efficiency. The insurer has kept its gross loss ratio below the long-term target of 60-65%, which has enabled selective rate reductions while ensuring desired returns. Year-to-date, Root’s shares have risen by 35.7%, outperforming the industry.
Despite this growth, Root trades at a high price-to-book ratio of 6.22, compared to the industry average of 1.54, and is currently rated a Zacks Rank #5 (Strong Sell). The Zacks Consensus Estimate for Root’s EPS has increased by 30.1% for 2025 and 29.4% for 2026 in the past month.
“`
