Root (ROOT) 9 May 212020 Q1 Earnings call transcript

Company Profile

Participants

Joe Laroche	Director of IR
Alex Timm	Co-Founder and CEO
Dan Rosenthal	CFO
Michael Phillips	Morgan Stanley
Ross Sandler	Barclays
Yaron Kinar	Goldman Sachs -
Phil Stefano	Deutsche Bank
David Motemaden	Evercore ISI
Matt Carletti	JMP Securities
Elyse Greenspan	Wells Fargo Securities
Josh Shanker	Bank of America Merrill Lynch
Brian Meredith	UBS
Josh Siegler	Cantor Fitzgerald
Ryan Tunis	Autonomous Research
Robert Zeller	Truist Securities

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Root, Inc.

First Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. now today, hand Investor Joe would to conference Relations. I speaker your Laroche, Instructions] like the to over [Operator Director of Thank you.

You begin. may

Joe Laroche

Root results. CEO; to Root letter and hosting today's earnings Last call morning, thank evening, Timm, for issued Rosenthal, on us Good announcing co-Founder Chief Alex and Officer. you results. Participating shareholder this Dan its its discuss today. call are first-quarter and financial XXXX a joining is Financial

within discussed also that for this Securities to XXXX, read quarter call December items While and quarterly our with XX-K we filed reflect complete be XX, more performance, our Form our the about ended ended report encourage document, March Exchange information the on will and the Commission. a to year on XX, for XXXX, for annual Form financial report you XX-Q

begin, Before outlook, current today's forward-looking will may include I remind result of new that discussed revise financial beliefs matters and to note as our to performance, this opinions on we on you management's call are obligation call, operating date as undertake based goals of related want statements statements this and that information a reflect our Please which these and that to forward-looking developments we assumptions. occur. the no of business

actual are subject differ to results materially our factors other described from cause today. statements Forward-looking expected could to various and risks that those and uncertainties

number to are and we addition, that a results. subject risks financial impact may In business of significantly our

to XXXX, measures reviewing as that materially available results letter the released will like under a differ our Root's our some I from actual please December non-GAAP website for risk will the year review as you factors, our to on these Investor be For conference replay see shareholder will while would Relations this you XX, XX-K a also the call, yesterday we factors remind company's more that discuss section. statements, could description the our Form call ended during well of discussion of A cause evening. of detailed performance. where

historic are nearest You and and GAAP will ir.joinroot.com. our which over Co-Founder those in of can find posted measure call the now measures shareholder turn reconciliation at with on the Alex comparable SEC, letter website I to to Timm, CEO. the our the non-GAAP filings the Root's

Alex Timm

context growth Then we're Thanks, separation our the customers, improve into Joe. deliver drive QX how performance. additional On talk financials operations how share deep call science dive also to providing QX are a further call, experience insights data to I'll around from elevating the today's increasingly about and over creating sustained to leveraging I'll Dan profitability. our path we and competitors. I'll to and turn for be I'll we our into Root's advantage efficiency.

million direct For year-over-year the we first XX% while over generated contribution. time $XXX did direct premiums written ever, And increase. in This in delivering a quarter. Root million of a $XX this was

ratio. was result profitability disciplined, in focused primarily was improvements It This loss increase accident. is in direct our Our execution. the by of no driven

unit billion all advanced to By a our of is mandated our is competitors, the fundamentally built build this data and that and we creating we more for and Keep from highly machine product work up an consumers. have predictive own founded learning. At World belief are to our this discrimination the an entirely founded X. enabling the create continue can prices were We government. Root, and before by by the creating better As on ground datasets, mind, for insurance and prices industry based increasingly we algorithms, at consumers. we commitment algorithms, disrupt our War technology on experiences eliminating Root company based better improving technology insurance in who Driving industry. $XXX economics predictive lower auto dominated bias

So double-click claims in means experience. QX. one we of for Root this offers truth The specifically the delivered consumers turnaround powered biggest by insurance what the is in and on in what an claims our claims makes proprietary is let product me moment industry. fast. and automation times that for that the fastest customers mobile easy claims response system This of makes our times the platform process

us experience in the work in half to hands We notifying customer want of And to to the of it's fairly claims to beginning to and our fully to delivering This and our time we estimate between on put XXXX time a are of way accident us life. our the in If the be have seconds. aspects deserve all from an cash our us customers. days of autonomous customers taught reduced anything, competitors. enables well people that our treated

industry credit toward ruled QX, efforts, In of on these We to upon that keep detailed rating variable. the with We the And the know products score doubled-down industry we and brands, away our put world their bias, comes leaders as of on The to campaign shift. in and we industry using bias from consumers Washington light To of values And the report right. are rating to score to credit Drop to initiative, called tide use public a a industry that removing Score choosing commissioners, state fairness. and injustice last bright have out evolve State in a announced of what's insurance both. credit unique address change request giants' and variable. against Root price align experiences releasing and score of credit a the state score that on credit ability industry a see call groups from leaning the the bias advocacy a recently own of is the to issue. toward this, as reliance the a on today The inherent has arc work we're beginning off and and sense increasingly kicking the year, that grassroots we perpetuates. consumers educating

ago, scores. National few to groups of the asked the Insurance Commissioners weeks address Just credit-based XX racially of advocacy use discriminatory Association a insurance

that this of measuring for grows, change those win. shaking it's ways clear As of industry other the support risk will with swell

leads to Our firmly data positions us do science so.

As at products We'll build we of the putting continue applying our fuel our call this turn better through back hands better that, do sustainable continue engineering the consumer, everything while growth in prices, will do. to With over thankful we investors, profit. to of control the into data to customers. our we the Dan. continued drive long-term science I'll and and support our expertise for team I'm and

Dan Rosenthal

everyone. good Alex, morning, Thanks, and

across of profitability really and The hit team how first successful both proud measures. we quarter are of the And ground growth XXXX was our one a our running.

And our You will here GAAP results in published full are find we some; contained letter highlights. financial yesterday shareholder evening. the

On metric impacting direct government QX of was of first a million. growth, our we XX% ratio period contribution, pulled result the $XX impact March from profitability, Direct XX%, the ratio, million timing accident-year primarily also the above quarter, improvement prior May business, of XXXX, and some $XXX for for direct direct represents ratio sequential premium from I of accident due for grew XXXX strong, a XXXX. the This totaled have in line, growth stimulus. removing a we favorable $XXX direct loss the that QX to profitability XX% Also, improvement to Shifting premium direct contribution $XX year-over-year including million, to of improvement the million our QX. Adjusting The was direct was the above. primarily development, loss XX% year-over-year increased the of million. for as million earned the a as from to covered for a April top quarter. key and premium improvement $XXX earned XXXX. noise approximately of really first in by quarter, prior-period related XX% loss $XX the Direct over was direct believe XX-point year-over-year development, driven been the and forward written big particularly to three-point contribution XX% direct may quarter demand was QX written premium against loss pandemic.

be a tends our marketing And for impact fueled us, quarter as goals. has growth stronger toward out momentum seasonally providing first are stimulus of customers great to to work environment car created The That and return the shopping. demand.

spend ratio intact. mentioned results, To business As continued investing approach ensure We and can in our QX activity acquisition loss we we has acquisition customer to significantly the call build term scale end, a management broader on to long the contributed while of our our Alex over heavily mentioned, that set our this our to test-and-invest we're state QX. profile CAC in continued the that keeping of channels. QX

an we earned The This and QX of additional business premiums the a necessary. better completed We seasoned where ratio. in seasoned state our drove team filings. successfully to management premiums investment added seasoned state quarter, eight with portfolio at seasoned are XX% In sequentially along to level, a loss adjusting managing states state expansion targeted in portfolio. pricing the

are the is to process So expanding work our states. in states. lot and we into a multiple in now new and we in our for at to Licensure have XX markets, product, and the the filing licenses of momentum step of hard the good quarter, states. forms writing models operate required we're first necessary in We pricing existing policies. And first now challenging have

my business all am multiyear few as here We end, we placed attain treaty direct in QX to We building with shifting we the a partners, on pleased a capital provided guidance the were which with relationships, months. And basis. that I well you reinsurance on to alignment have that announce our with To of on on new reinsurance panel is progress terms our call. we team that business. and to a able current by will the better of also our includes me line share components names. more April the better as the X, manage in date and reinsurance to By coming successfully it's a run

breadth and of We are our reinsurance strength about they the structure. remain excited as key component programs capital a of

taking what We strong solid in And ratio. period we right demand our first loss are delivered very the environment. encouraged of We we and in a accomplished accident grew the direct improvement business quarter. by contribution way, advantage

Alex not model on that, your one our forward and quarter Our team QX shared. a year results working. questions. With demonstrate we And I that to make. laser that That our have look expectations business is does delivering the remains said, focused

Operator

[Operator with Instructions] from first Phillips Michael Morgan Stanley. Your question is

Michael Phillips

as just to just for sure understand Alex, Hey, everybody. Dan the time. want quarter quarter. and I comments Thanks I last this compared to make

now wanted you it sure. was semantics on - on Last it what but said, want quarter, you're in think new focus the way bit I'm you I quarter, like I national slowdown thinking about that was might licensed launching was the okay. be plan. felt states to where it in in And to just make model a you've proven But expansion a your of this Is every in - state to that new states out a simply getting launch states, every just you're starting XX in. states? pricing to almost that new and difference? licensed model a few you that and it in confident XX the you and Or in can newer have Is go those it and and out forms is roll go? now or licenses of there ready

Dan Rosenthal

This Dan, you, the Mike. question. thanks We've is No. Good morning. for and got

for talked short the Mike, on entity what is is are what secure in the The And is states we last to process. the to we the utilized as and models in pricing and about market actively means begin one product of call. our different in work And we writing as the be the And of licenses able And and our we that nothing in the states, now filing on step now. So telematics our night all know, what we from that's disclosing line that that QX we with XX to of all said, Shell Root positive call. you answer, several as process put and have talked in is advanced. that are us, that policies. is forms QX about

Michael Phillips

Good. Okay.

the you new last states. now that forms confidence saying pricing quarter quarter in process the means that several of that states? what of to expand when and this that into you were model in - That you you're say the models filing So is you it do newer in have and

Dan Rosenthal

right. That's Absolutely.

have It's As you part we deeply the process. It's necessary years. invested that regulators. the don't over control in we a the of something know,

in where as those still of regulatory in is wonderful of unique, each former the actuary, NAIC. regulatory the as a it's in which Alex, state. writing head have states is engaged policies. President conversations we yet relations, the quite in a himself, we We actively know, that process process who's are And well. an you are But helps not

Michael Phillips

Okay.

question second just comments. The on then is

quarter. down drill on why different mean? is before. I targeted one about You targeted are for What improved improving talked you How marketing more those, marketing you want and listed I if targeting But - focus doing this can good for we reasons focus are initiatives this characteristics. of the your driving to a better does here can, on into better to six you second your - margins or maybe How that? characteristics? that five

Alex Timm

allowed more science our marketing and has book effectively fine-tune time. the right Absolutely. What business the question. in order toward data allowed preferred on grown, ability the as channels. that sure mix the It's channels to to lower we've ad to us of of those rich us right has And and toward the And our marketing customer platforms of good have digital all that models really a at to make those through right our across put which is loss comes customers. we've that and more more focused of data platforms marketing data, more ratio to those the a showing is more inside we leverage skew gotten we're and and

Operator

Your is Ross from with next Sandler Barclays. question

Ross Sandler

to guys, Hey, insurance the but I'll about questions the growth. had just a question leave experts

mentioned was that auto you some nice And just PIF the your efficiency up marketing So you're sequentially. pretty getting. of

retention that? about turned expect how and talk Have adds how are you that Any improvement corner, going the rates And we should a of about the trending? then the So do rates, retention sequential forward? net Thanks there? lot. can think on kind we we

Dan Rosenthal

Ross. Dan. Thanks, This is

is talked So think everything I first, we about on what with PIF, in line prior have on calls.

line I moving the rest we We're for this growth earlier. gave executing PIF that the on the and the encouraged states later are first are calls. year, with well. of that into as We're the retention in And focused our drive in year. of additional all quarter. guidance that prior with will mentioned direct line we written prior rates on growth as our by Similarly, in premium growth saw on We focused plan quarters

that off about, expect time, strategies talked up retention, know and we on we are you'll we've enhancing pay seeing going numbers. those it show takes Ross, focused As multiple in and see you But deploying the strategies as the an about - happen. new to talked the same And ratio. our writings at we of to time, for that you're will as impact have with that, see loss you're growth influx associated

continue and tailwinds we the net-net, associated will loss ratio QX the course with that, call these have you headwinds the out So ratio the loss consistent show see year playing we on over to what of with about that improvement. talked

Operator

Kinar Your with Yaron Sachs. Goldman next question from is

Yaron Kinar

Hi. everybody. Good morning,

still you in expect Or think into that the intact? First could this do the ahead think result question, you expectations put of shopping differently, Or the I forward in come behavior you full-year are you of to pull Do some - quarter. that outlook? in slowdown April-May actually your next then guess, quarter? the do

Dan Rosenthal

Yaron. Thanks,

know, we've habit not the of clear quarterly you guidance. made in As providing we're

versus So too focus to I'm not much going QX in QX. on

mentioned, see you a pull government May. of into in as part April did forward associated believe, demand Although, from and with March, We stimulus. the we

we're warrants that little As But ago. outlook, you. months know, policy, year we're disruptive first-quarter issued on the writing far We And our from doing XXXX first And working. the we're if plan, what of years know course, more business from never guidance is something we our on path that with to we'll the an we annual been a in back expectations. The by consistent is focused has guidance than before. quarter you executing something provided our five our changes here. the come The two removed as results. just as encouraged that And exceeded model done February. update,

Yaron Kinar

there XXXX, nice end or or the of Can as up at seasoned ends And us move you try quarter. the Okay. move total percentage this maybe of considering up help of saw premiums a clearly kind premiums where quantify earned that to earned that continued there think are little to you is maybe you pressure, that the I we offer book, trying talking of XX% it bit about of a may book? the but of accelerate would XX% see realize can are XX% of there Any the growth? appreciated. we directionally, - book, to a be much help

Dan Rosenthal

Yaron. Thanks,

show we're investment and states think it more on that of Part We've to regulators around with and all focused with our that - how will the they states into you're our growth, as is course, growth is the I of our we seasoned to continue. that will get will less uncertainty telematics seeing will into states with How that in sustainable, can our seasoned or about our continue that the working in we put happen that I where yet with our regulators repeatable market. seasoned models line before, that become seasoned. able quickly consistent trend to as goal models is states states. ultimately talked of you that work be up. not see Because, seasoned states just expect have are so to pricing become market,

Yaron Kinar

it. talk development, Prior-year drove if can I maybe to one I'll may. about in try you the Got sneak more, what release just there?

Dan Rosenthal

was Yaron, trends bodily and expect by at would tied most development fiscal-year continued to reserving team, particularly, looking you And claims. it as particularly just, of It's injury XXXX. Yes. work our different of

Yaron Kinar

you. Thank

Operator

with is next your Deutsche [Operator Stefano Instructions] from Phil question And Bank.

Phil Stefano

Yeah, the reinsurance renewal. I on thanks. Good treaty update the Dan, And appreciate morning.

then the combined kind to Just the or conversations Is about reinsurance the quick talk right can more went numbers-type you were quota way and participants? panel? What how we think conditions about pushback question feedback session XX% of And share? you theoretical. as the a think in getting with the new then us about to date, terms from the the maybe and the renewal the

Dan Rosenthal

Thanks, and for what cession Phil. that the call. was was quarter rate expectations XX%, the and we talked about Yes, QX our line on back with in

up terms building talked XX% we we are that And the rate completed referenced. recall, that still that If trend down then half line the report treaty. got cession very new X back reinsurers are treaty the with We're on existing of successfully placed have July in to you'll We've number letter of did out that to and X. you pleased in about obviously includes to closer The as favorable a we great panel in treaty. that April we the that we partners. and second coming the the year, the both

move overall And treaty one-year see treaty. talked reinsurance improve. And a the economics did so treaty to all saw our the we've that from consistent we about. We with a strategy multiyear it's

Phil Stefano

the Okay. average the bit to the improves just back going opportunity claims autonomous processing. claims that we it? done? gears understood mean were And than working intended? claim an on the quality move for on this of you a experience as think switching user do Do to product. there the how I guess, about payments or which side, that process review payment I claim that I to faster the and is past I for Can control side testing about is the efficacy payments? talk Is think is this? us you sample process past

Alex Timm

cheaper and is The because and are And will holds we devices quantitative the testing is The throughout both control we don't compare get we a always in close actually, claim. also if not of things do that at age. so happy machine and humans originally all allows can the Claims doing. a the actually us it time we looking answer do because process. short can that actually sorts a A/B that of machine better close yes. bad happen claims, versus close detection with look the what process over claims. We're That generally can we you entire this that have we way where very and manner. do set, lots claims always monitoring at that humans and doing the defect what faster Absolutely. it is to so be There's

seeing severity that benefiting a from of automation. lot the actually So is we're

Phil Stefano

Perfect.

Operator

Your ISI. next Evercore question with Motemaden is from David

David Motemaden

Hi. couple Good I morning. guess, for A me. questions from of first, Dan.

benefit. Just as way It like it just helping on stimulus size pulled to being guys there I'm the checks mentioned as good guess, the insight sounds growth? And demand helped PIF forward. seasonality, this PIF. well like you have impact it which into sounds some I pull-forward wondering, Dan, any a you a on also pretty is having

wondering to if direct benefit it what to you secondly, 'XX? ratio, from the for that loss And XX-year ratio five-point us. period on benefit XX% just improve. So I compares was look Thank could accident year-over-year? the got guess loss good loss see you. wondering on how in the ratio, size I'm specifically, continuing I the mix And the to if guys full-year you

Dan Rosenthal

Thanks, David.

on not pull first the question, the we're of the forward So sizing demand.

can significant I lot stimulus had a well and as the the come brand. imagine as really understanding and as wanted think, of But we're in better on you lot progresses, it. an both the was of investing. that back that impact. our our we'll to doing the test a we're We think of we're convey as to the seeing strategies get marketing enough, we we'll as including doing letter, second performance come And And And forward. David traditional front, well a work about live. as frankly, you that both fruits it that. marketing it talk quarter And around

loss the from interesting. as it's very far As accident period ratio,

first direct I QX, thought earlier $XXX renewal of obviously we growth premium as quarter first more bit see history. percentage still quarter our the a be quarter, would of company when you in an impact first bigger. percentage in our back think the earned And new the had when we talked in in writings million a that

in a loss well we of drive that are in, start state is so see some year segmentation earn the the And the are significant the quarters, to as seasoned as with line have ratio on to is in investing is question we mix this states. term, growth. by But those focus there's you writings conversation that as work, new will the of short see the XX-year - conversation which that prior pressure And believe, the going you loss ratio going in season. offset to no on and management and

David Motemaden

you Thank Great.

Operator

is Wells from Fargo. Greenspan Your your Elyse you with is mute. next Elyse, line your on may and question have open, phone

from your next is Carletti JPMorgan And Okay. Securities. with question Matt

Matt Carletti

on thanks. feature of Checkpoints. hoping on Hey, Matt talk I you with in noted a the or new with has in Securities. could converting was But impact bit JMP yet engagement been. staying on a in I of a noticed feedback the test any you read-throughs to that have there kind and app, about lift Carletti the people particularly the with letter, are sticking terms touched that the drive as called and the that might little what cited. test I drive the you particularly, policyholder? churn

Alex Timm

Absolutely.

drive test on So that there's how for that like includes see on engage includes material during includes sure ways that throughout process. features, we those of rewards, they're they're understand lots your the in consumers those engagement. features you that driving a And review. can things that to badges, how making continue and And lot we uplift iterate it as scores improve we different period, and driving, focus to progressing it

people app So the two And drive the with during app, period. things. that test that opening engaging does

The first, it the rates. increases conversion definitely

to correlation post there mentioned tend and And a what then the will second more they engagement between disproportionately. and is engaged, is more bind are long-term purchase consumers is retention. as you So

as more to really what the in believe we and every day features. we new app. shift do to And continue we continue so and more all that's invest And day. product here will to And features to continue we discover rapidly

Matt Carletti

other, then I can. maybe And if one Great.

Just the more economy some calls severity influences reopening and question. toward and other trends talk really on on open labor There's the during set what eyes upticks curious the pool and of guys' companies' other kind insurer the how insurance matter been the on some of quarter things might year. versus for kind average auto your in that? that the view is dealing could I when and what Root have of apart severity with later Just of

Alex Timm

monitor seen say trends we seeing. - and our I trends so severity To in constantly because we will monitor the in on come trends obviously, and a - not particular through, installed. in all we claims we certainly as levels. date time. To mobile the - bake we're data we appropriately acceleration rich we that quickly, and have frequency have and claims severity data will app our most because our the because the date, rate we that see partly consumers for such settle that have, We're of severity

our data much And the basically better claims though, so through claims. us, lots which of come app, allows mobile faster. to That that on gives particular us data monitor real-time

come And through, that data would rate. so as take we we see

Matt Carletti

Great. much, dog Thank you very and apologies my for in the background.

Matt Carletti

with Wells Your next Fargo. Greenspan is from Elyse question

Elyse Greenspan

Hi.

was before. Sorry That phone. my about that

marketing the So side my was things. on of question first

guys but guess, positive still sounds are was you forward, growth guys So as about the some right, like in bigger sense. I there mentioned, it you pull growth,

kind And marketing of to expect so continue still to we should ramp up?

Dan Rosenthal

in is consistent that quarter on expected. everything sense had with we out Elyse. talked first the Thanks, And calls. played prior what as about Yeah, we've

double and on for the track still to sales year. more are We than our slightly spend marketing

focused investing our on We in are channels. diversifying marketing

spend previously seeing terms brand. We in we're are doing having that the some brand on Root of success front. of the real authenticity of awareness after really nothing And

customer And we been by are investments the as make. in so we bit the our this into are a elevated growth encouraged the a right to is year, talked acquisition but about, result And investments. these coming and as that fourth quarter continuing has cost those of

Elyse Greenspan

for then assuming direct for guide that seasonality in. weaker? But the stronger perhaps of had contribution there that set get we just more seasonally are was hoping color that mentioned you the was I And QX, And - a where in strong inferred year, as I'm contribution to the quarter I seasonally other the was. last And the then quarters think should Great. when about built guide full little it then that being direct stronger kind you as QX. bit think, not a there.

Dan Rosenthal

seasonality book the Thanks, that is Elyse. to obviously, as the It business some ratio fair with is loss respect and, there well. Root say to in

a I than for growth or years have think developing is that curve. book still in situation or been insurers, around Root XXX on XX bit a more is legacy different of who significant sense the that our in

And growth impacted writings of by be so throughout year. to is the going the new

our year. really that's in back today. and so the And intended and that guide for what assumed continues February It

offset state We investments guidance. are the segmentation, that that But guide that writings And progresses, the put significantly slightly. elevate management our leads to state as that when the and expect grow will season that new contribution you the make. that ratio the year together, loss by for I - in year. as direct said, will we'll confident we Overall, that again,

Elyse Greenspan

And guess, could in. last it one I one, sneak then I if

that in? see of which the you and a you'll quarterly, the guidance plan annual in quarters? So certain you're the like how sense. will point said see lay guess, is so out process updating in guidance I kind - makes of, the update at year But there year two then just it a not guidance to just is Or after comes

Dan Rosenthal

really forward feel that focused latter, in about good plan. the It's our February. plan the that's on where we focus We're We on And is. Elyse. our put executing Yes.

really I warrants said dramatically that if earlier, something update. changes As an

course, point, will we our you plan. come we are this about focused on at But talk staying laser and Of back to it.

Elyse Greenspan

for Thanks the Okay. color.

Operator

Bank Josh America. is next from question Your with of Shanker

Josh Shanker

for Thanks my everybody. Good taking question. Yeah. morning,

a a check. the equivalent at Do you bought proportion formerly I half funnel? yet into stimulus the March, individuals receiving terms the of of In have auto a loss than those high after that a were the in assume reserved ratio of of for customers they drivers coverage, who back with non-continuous on or on insurance books put drivers come score? higher your to the those books most are telematics And drivers who

Alex Timm

this is So Alex.

because our reserves future first, for So - we set claims. obviously reserves don't

March would material a there not at on books So prior time. the reflect the those reserves portion of cohort be And a would from accidents. this

unit ratio performance cohort, and in loss pricing right we've of cohorts. the that underwriting terms think In we for economic place got and those of

be we're necessarily time, cost. to think know somebody okay. continuously to don't appropriate we us we how insured customer that believe We with how who acquisition We are price is so long think to And that's for customers. at if sure we a going them acquiring make period we you those believe know the of

there's customers. you customers, important. we loss with - so of but reflected currently think those We for see part loss segmentation that don't reserves, because our different, those accidents. reserves we And that that's so on would the are fully not anything is also they're past We know wrong reason why like again, the and

Josh Shanker

those drivers And score would a over that, or a different that you than of cohort have time, telematics drivers broad - expect

Alex Timm

is we telematics No. actually, independent, such. The and created as

and So then telematics is saw of independent telematics If the correlation useful. wouldn't a lot we cells rating rating telematics, nearly between of cells. be as

Josh Shanker

how going on in policy you then could on count? us update And that's what's Georgia, Okay. your and impacting

Dan Rosenthal

been or get working that Josh. will and Dan. and pending that unseasoned a is seen to increase you've had prior Georgia, state. the special on regulator. states. that Simply to had Thanks, rate today new by in we continue approved filing This Yes, mentioned are calls imagine Georgia which evolve. We a includes in season That into sauce states Georgia, is our put, I

so at and evaluated models. you work previously, looked the if very something in our were performance And is And And regulator underpriced with Georgia. that that's as go important. the we back, that we there

that Georgia, the are right now and on that's in fixing. process there. the you fixed, we our improved in have going the in increase we in And of we that's be We And as rate it work feel And are growth done will the in way. Georgia see why underwriting. and focus we

Josh Shanker

item there give newly I in I adds. as to other that policy gross know guys us financials satisfying? one - show a issued I policies would you not a us o'clock, don't tracking or that in. if know Is new us you a number your serve that's X sneak sales point thing way in can in it's number that given

Dan Rosenthal

in what our in disclosures. But show basically well with can retention information. discern do prior guided I of on what a we Josh, you that, Yes, quarters, as we our you as think to line And is that is that touch from don't lot S-X. with is I've -

components the make disclosure there lot PIF that a put and of our out up. around have it We different

Josh Shanker

Thank Okay. you.

Operator

UBS. Your next Meredith with is from question Brian

Brian Meredith

quick here of couple A thanks. Hey, you. ones for

payments, Bitcoin as Any just Metromile for presents? your now accepting premium that that one, curious, What's going to First that? announced that on well they're payments. this as start thoughts claims morning challenges

Alex Timm

make we whatever Alex. with there This don't we're We when consumers that sure but really be a now. really to as consumers flexibility Bitcoin, our and challenges we think to is about really at think strong it demand options. right for to although We and accepting certainly might real fun see could transact And are that asking be just we item about, don't consumer point. do that a talk just this payment wanting see payment there Bitcoin focused

Brian Meredith

Great. low Okay. of driving been anything where we're of curious, product may different? guess telematics I in all back And now miles-driven to of my driving just from during they question, and where miles be second kind have transitioning how consumer work there very, weren't XX a of may habits your kind then as a very I'm XXXX? kind And different today. seeing period because affecting Are kind you XXXX the is just than sudden was that of people

Alex Timm

book about recover dips point. this And in we've we temporary our our in sure the levels. COVID that coming great question. the making seen We like where overreacting of We basically out. the now. a rebound seen I And that that Well, were they're pre-COVID where at to very are mileage good algorithms weren't we feel closely. in said, to also, mileage, we that's done mileage. monitor And We've scores, are, so through fully again, general, we've monitoring impacts pandemic,

Brian Meredith

Thank Great. you.

Operator

Cantor from next Our is Siegler question Fitzgerald. Josh with

Josh Siegler

how and morning. provide base new Hi, existing pricing guys. be Good color approaching you some in moving ones? Can we'll on both forward, states and increases rate

Alex Timm

Absolutely. that pricing way individual basis. approach state segmented on a we very is The

constantly state, need state claim we So what have we not do trends in cost are national management the about take is. our function what that to and each overall that's we headed, at that looks we Right built really a where out feel take. indication therefore, have now, where good or do rate believe we

per-state us going on You can forward. a to basis, continue though, fine-tune adjustments make expect to

Josh Siegler

to Great. both update attract privacy and I recent the telematics data impact for - the for ability Apple phone, national wondering, was on also how does really your

Alex Timm

we've actually rollouts dealt mini changes. with - is with This new the lots different systems a for iOS rollout the of had something have long time. privacy of We -

to quite went seen were it impact. We there. we a well. us, manage And really, rollout For iOS haven't XX.X we able through material

have data seen falloff consumers. we in of our a So not material sharing the from

Josh Siegler

Great. for Thank you the color.

Operator

Your from Ryan next Autonomous. Tunis is question with

Ryan Tunis

Good morning, thanks. Hey, guys.

growth. pull-forward of So on my with question, stuff I guess, the the is just some

You added ago. this a year number of quarter PIFs did a that you similar

marketing. You spent on much about twice as

I'm some think understand pull why ad efficiency, a spending you're I cost So if my - down you is bit. the average there's you just guess per bit this stimulus little question a just the assume is forward fact marketing trying a that on I CAC you going wouldn't just. would to efficiency guess up why about on? less bit, but advertising related. like you that Like is is why assume is that little more is this think

Alex Timm

true tax true every Seasonality, stimulus broadly. generally is be or the industry and it's at the would company year in whether season,

we see would that. So

We to of we're of at terms it we the appropriately that - also we're In don't acquisition bringing the economics to we loss that terms compared customer cost year, look mix make lifetime and manage the in sure last business in, we target have acquisition particularly customer bringing relative we're managing really to cost, can in isolation. that ratios value CAC. so of unit that in the

look just CAC isolation. at in So we again don't

That customer with We for much should for customer us decades cost higher that going we months. know have a stay many six acquisition with us are have for stay might customers who to and decades.

And at of to the bid for And on that reason the that's so isolation. of models for lot us a have that why amount consumers. just launched allow science we platforms we right data part look can't in the our basically our right marketing

impact Again, In some pull sort to to of is forward terms stimulus. we We expect with every seasonality that year is forward, had something the believe demand. of that there it happen. do pull that it that the

Dan Rosenthal

And we just way saw conversion standpoint. expand to is up show a really this quickly The on is that, Dan. just from that

where carefully believe saw, as As we into we diversity building expense. of brand track of we just on, March. the very things the touched of one conversion. of channel as look forward timing conversion Obviously, and the that's Alex some that pulling is at we well that impact And

Ryan Tunis

more hasn't as And driven underwriters seen fallen just, frequency, the, I Got thinking all from it. up we'd much vehicle obviously, thought. the are at guess, as we've about miles have

saw type thought results in Can Texas first the industry a Texas quarter. a from just freezing helped a you kind in standpoint, frequency the I has February, talk from might think what event? bit gotten you little you about the of bit of little benefit maybe you have

Alex Timm

Absolutely.

do not weather. certainly because event freezing help Texas the cover did we So

In the forward, of of increased because reduction frequency. lots lost a during a actually don't of sort going general, see will demand any you people with events that But of period - material being those and also see a So time, we frequency. or winter with sorts obviously in saw driver things, Texas, in power. we that

Operator

question Squali Truist. is next with Our Youssef from

Robert Zeller

Youssef. for on Thanks taking Robert the is This Hi. question. for

you quarter on Thanks. growth wondering retention can and thus how April. touch maybe policies Just or far the in trended if enforced have in

Dan Rosenthal

Thanks, Robert. today about here first talking We're quarter. the

second the So premium, came same to our PIF loss we're the that time saw far showing written direct thus the at we I want ratio the into don't development in up get first in down. growth in by Obviously, that quarter, up encouraged in quarter. showing

Robert Zeller

Thanks. Understood.

Operator

today's time. this conference for conclude gentlemen And participating. and further this you call. there are no at Thank Ladies questions

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