Root Insurance Turned Profitable in 2025 and the Market Hasn't Caught Up Yet

"Root posted full-year 2025 net income of $40.3 million, a 30% increase year-over-year on $1.5 billion in premiums. What's more telling is how it got there as Root achieved a sub-100% combined ratio for the full year, meaning it is now profitable on underwriting alone. For an insurtech that spent years burning cash, that distinction matters."

"The independent agent channel, which represents roughly one-third of the U.S. auto insurance market, is Root's fastest-growing segment in a total addressable market management pegged above $100 billion. Independent agent new writings more than tripled year-over-year in Q3 2025, with momentum continuing into 2026. Root's AI-driven pricing models delivered a 20%+ increase in estimated customer lifetime values over the past 12 months."

"ROOT currently has a P/S ratio of .70 which is almost half the industry standard... ROOT is growing well, improving profitability and expanding partnerships... I believe they deserve a more fair re-rating back to the $100-150 range in due time."

Root, Inc. has reached a significant profitability milestone by achieving a sub-100% combined ratio for full-year 2025, generating $40.3 million in net income on $1.5 billion in premiums—a 30% year-over-year increase. This marks a critical transition for the insurtech company from cash-burning operations to underwriting profitability. The independent agent channel, representing one-third of the U.S. auto insurance market, emerged as Root's fastest-growing segment with new writings more than tripling in Q3 2025. Root's AI-driven pricing models increased estimated customer lifetime values by over 20% annually. Despite these achievements, the stock has declined 21% year-to-date, creating a valuation disconnect that Reddit investors view as underpricing the company's genuine business progress.

Read at 24/7 Wall St.