What was the combined ratio for the quarter and how does it compare to industry benchmarks? | ROOT (Aug 06, 2025) | Candlesense
ROOT

What was the combined ratio for the quarter and how does it compare to industry benchmarks?

Answer

The press release you quoted does not actually disclose the specific combined ratio for Root, Inc.’s second‑quarter 2025 results. It only tells us that the full financial results—including the combined ratio—are available in the shareholder letter and the updated investor presentation that were posted on the company’s investor‑relations website ( ir.joinroot.com ).

Because the exact figure isn’t included in the excerpt you provided, I can’t give you the precise combined ratio for the quarter. However, here’s what you can do to obtain it and how to interpret it once you have the number:

1. Where to Find the Combined Ratio

  • Shareholder Letter – Usually a PDF titled something like “Root, Inc. Q2 2025 Shareholder Letter.” It contains the management commentary and key performance metrics, including the combined ratio.
  • Investor Presentation – A slide deck (often a PowerPoint or PDF) that highlights quarterly results, with a dedicated slide for underwriting performance metrics such as loss ratio, expense ratio, and the combined ratio.

Both documents are posted on ir.joinroot.com under the “Quarterly Results” or “Press Releases” section for the August 6 2025 release.

2. How to Interpret the Combined Ratio

Component Definition
Loss Ratio Claims paid (plus incurred but not yet paid) ÷ earned premiums.
Expense Ratio Underwriting expenses (agents, marketing, admin, etc.) ÷ written premiums.
Combined Ratio Loss Ratio + Expense Ratio. A ratio below 100 % means the insurer is underwriting profitably (i.e., it’s earning more in premiums than it’s paying out in claims and expenses). A ratio above 100 % indicates an underwriting loss, which must be offset by investment income to be profitable overall.

3. Typical Industry Benchmarks (2024‑2025)

  • U.S. Property & Casualty (P&C) insurers: The industry combined ratio usually hovers around 98 %–102 %. A “soft” market (higher loss ratios) pushes the average above 100 %; a “hard” market (lower loss ratios) brings it below 100 %.
  • Auto insurers (a segment where Root operates): The NAIC reported an average combined ratio of roughly 101 % in 2024, with many well‑run carriers achieving 96 %–99 %.
  • Health insurers: Typically run lower combined ratios (often 90 %–95 %) because medical cost trends differ from auto/property lines.

4. How to Compare Once You Have the Number

  1. If Root’s combined ratio is < 100 %

    • Interpretation: The company is underwriting profitably for the quarter.
    • Benchmark comparison: It would be better than the average P&C market (which is near‑break‑even) and likely in line with or better than the broader auto‑insurance peer group if the ratio is in the mid‑90s.

  2. If Root’s combined ratio is around 100 %

    • Interpretation: The company is roughly breaking even on underwriting; profitability would rely on investment returns.
    • Benchmark comparison: This would be typical for a “soft” market environment and comparable to the industry average.

  3. If Root’s combined ratio is > 100 %

    • Interpretation: The company is experiencing an underwriting loss for the quarter.
    • Benchmark comparison: It would be worse than the industry average if the excess is significant (e.g., > 110 %). However, a modest excess (e.g., 101‑103 %) can still be common in a soft market, especially if the company is investing heavily in growth or new product lines.

5. Next Steps for You

  1. Visit ir.joinroot.com and locate the Q2 2025 shareholder letter or investor presentation.
  2. Look for a slide or table titled “Underwriting Metrics,” “Combined Ratio,” or similar.
  3. Note the combined ratio (often expressed as a percentage).
  4. Compare that figure to the industry averages listed above or to specific competitors’ Q2 2025 results (e.g., GEICO, Allstate, Progressive) which are usually disclosed in their own earnings releases.

If you retrieve the number and would like a more detailed comparative analysis (e.g., side‑by‑side with a specific competitor or with historical Root performance), feel free to share it and I can expand the assessment accordingly.

Other Questions About This News

Are there any macroeconomic or regulatory factors highlighted that could influence future quarters? What was the net loss for the quarter and how does it compare to the same quarter last year? What changes, if any, were reported in the expense ratio versus competitors such as Lemonade and Hippo? Did the company issue any updated revenue or profitability guidance for FY 2025? How will the Q2 earnings impact ROOT's short‑term stock price? What is the company’s cash flow situation and runway given the latest results? Did Root announce a capital raise or share issuance and what are the dilution implications? How many new policies were written in Q2 and what does that indicate about growth momentum? Is there any information on reinsurance costs or arrangements that could affect future risk exposure?