Insurtech Root Insurance has partnered with Hyundai Capital America, the finance arm of Hyundai Motor Group. The companies will offer data-based pricing to auto buyers. Hyundai Capital supports Hyundai, Kia, and Genesis.
This partnership expands Root’s distribution and adds new channels, according to co-founder and CEO Alex Timm. He said the strategy focuses on gaining access to more customers and improving how they buy insurance.
Our partnership channel has seen new writings increase 115% year-over-year as our pipeline continues to expand across the automotive, financial services and agent sub-channels
Alex Timm, Root’s co-founder and CEO
“Building differentiated access to customers remains a core pillar of our company strategy. As the partnership channel grows, we plan to continue to eliminate friction in the purchase experience by moving partners to fully embedded experiences,” Alex Timm said.
Root ended Q4 with a $22.1mn net profit, a shift from a $24mn loss in the same quarter last year. Annual net income reached $30.9mn, compared to a $147.4mn loss in 2023.
Net premiums earned for the fourth quarter rose to $299.7mn, up from $176mn. The combined ratio improved to 91.5 from 111.9.
Timm said Root doubled its new writings in the partnership channel over the past year. That channel grew 115% year-over-year. It includes deals across automotive, financial services, and agents.
The company expects further gains from embedded offerings. Timm said Root will reduce friction by shifting partners to fully integrated purchase flows. Root has focused on these distribution models for several years, projecting that more auto insurance volume will shift to new platforms.
Root Inc., founded in 2015, has raised significant capital since launch and shifted its strategy from growth to profitability.
The company completed several funding rounds before going public in 2020. By that point, it had raised hundreds of millions in private capital and had attracted attention as one of the early adopters of usage-based pricing in auto insurance.
In 2019, Root raised $360mn in a late-stage round that helped fuel expansion. The company went public in October 2020 through an IPO, raising $724.4mn. This marked a major milestone, as Root was among the first insurtechs to list on a U.S. exchange during a period of heightened interest in digital insurance platforms.
Shortly after its IPO, Root secured another $500mn through a private placement deal. These funds supported scaling efforts, product development, and entry into new markets.
Despite strong early funding, Root faced challenges balancing growth with underwriting performance. In its first years as a public company, losses widened, and investor pressure shifted focus from expansion to margin improvement.
Management responded by restructuring distribution, improving pricing models, and cutting acquisition costs.
By 2024, Root’s strategy began to yield results. The company reported a full-year net income of $30.9mn, reversing a $147.4mn loss in 2023.
Fourth-quarter net income reached $22.1mn. Net premiums earned rose to $299.7mn in Q4, up from $176mn. The combined ratio improved to 91.5 from 111.9, indicating stronger underwriting discipline.
