Root Insurance, which uses data science to identify and insure good drivers, recently made a number of moves to support its ambitions to become a nationwide player.
It's increasing its current 88 employee workforce by 500%. Many of the new hires, who will be added over the next three years, will be software engineers and other technologists, says Dan Manges, the insurtech’s co-founder and CTO.
The insurer, which is based in Columbus, Ohio, is moving into a new 65,000-square-foot facility in the city’s downtown.
In addition, the company, which is backed by some of the world’s largest reinsurance companies, including Maiden Re, Munich Re and Odyssey Re, recently closed a $51-million Series C round of funding.
Root hopes to establish itself as a national carrier by the end of next year, says Manges. “A year ago we were only in Ohio and now we’re live in 17 states, reaching about 40% of the U.S. population,” he says. Those locales include Arizona, Arkansas, Delaware, Illinois, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Missouri, Montana, New Mexico, Ohio, Oklahoma, Pennsylvania, Texas and Utah.
Root, which launched in 2015, is the nation’s first licensed insurance carrier run entirely on a mobile platform, giving it more of the look and feel of a technology company than an insurer. Its platform’s real-time, context-based auto insurance rate determination is managed through an app that makes use of smartphones as telematics devices. This let’s the company gather data about how customers drive, in addition to their driving history and demographic information available through their driver’s license records.
The insurer measures driving speeds, acceleration and other activity patterns and risk characteristics that could result in unsafe or distracted driving. After signing up on the app, customers drive for three weeks while their personal driving habits are profiled to develop a rate quote. This behavior measurement allows the company to insure drivers and offer discounts based on how they actually drive, rather than the demographics traditional insurers rely on.
“Our growth comes from building technology that allows us run more efficiently than most traditional insurance carriers,” says Manges.
“Every week we have a new version of our app for customers to download,” Manges says of the insurer’s regular product updates. These are incremental and include small enhancements to improve the customer’s experience, as well as major new features such as the ability for customers to take photos of vehicular damage to document their claims—which was added just a few weeks ago.
