Root Inc. reported a fourth quarter 2025 net income of $5.3 million compared with net income of $22.1 million for the same period in 2024 but ended the year with record net income of $40.3 million, a 30% jump compared with $30.9 million for full-year 2024.
In a letter to shareholders, Root said the decrease in income “reflect deliberate investments in partnership acquisition and direct R&D marketing, as well as a modest increase in loss ratio due to elevated seasonality.”
For Q4, Root Inc, the parent of insurtech Root Insurance, booked a combined ratio of 99.7 compared with 91.5 for Q4 2024. For the year, the combined ratio finished at 98.2 versus 96.4 in 2024.
Policies in force at the auto insurer grew to 481,869 at year-end compared with 414,862 the prior year. In the letter, Alex Timm, the Columbus, Ohio-based company’s CEO, said, “Of auto insurance carriers with more than a billion dollars in premiums, we believe we grew policies in force the fastest in 2025.”
He said Root expects policies in force to accelerate in 2026 with expansion of distribution channels.
Now operating in 36 states with the addition of Washington in Q3, Root said independent agents are its fastest growing segment.
“We see a long runway ahead of us for continued growth in this channel,” Timm said. “We have not seen demand in this channel slow, as we continue to appoint more of the market, naturally growing our reach.”
Root said that, as of the fourth quarter, owners of connected Toyota vehicles can give consent to share vehicle driving data with Root. This partnership with Connected Analytic Services, an affiliate of Toyota, allows eligible Toyota and Lexus car owners to voluntarily get an instant, telematics-based quote from Root.
“With roughly 90% of all new vehicle sales equipped with built-in data connectivity, this strategy has positioned us to be the partner of choice for OEMs who want their customers to receive better experiences and prices based on the evolution and usage of their vehicle technologies,” Timm said.
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