Root, Inc.

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 speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Joe LaRoche, Director of Investor Relations. Thank you. You may begin.

Good morning, and thank you for joining us today. Root is hosting this call to discuss its first quarter 2021 earnings results. Participating on today's call are Alex Tim, co-founder and CEO, and Dan Rosenthal, chief financial officer. Last evening, Root issued a shareholder letter announcing its financial results. While this call will reflect items discussed within that document, for more complete information about our financial performance, we also encourage you to read our annual report on Form 10-K for the year ended December 31, 2020, and our quarterly report on Form 10-Q for the quarter ended March 31, 2021, to be filed with the Securities and Exchange Commission. Before we begin, I want to remind you that matters discussed on today's call will include forward-looking statements related to our operating performance, financial goals, and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward-looking statements reflect our opinions as of the date of this call, and we undertake no obligation to revise this information as a result of new developments that may occur. Forward-looking statements are subject to various risk uncertainties, and other factors that could cause our actual results to differ materially from those expected and described today. In addition, we are subject to a number of risks that may significantly impact our business and financial results. For a more detailed description of our risk factors, please review our Form 10-K for the year ended December 31, 2020. where you will see a discussion of factors that could cause the company's actual results to differ materially from these statements, as well as our shareholder letter released yesterday evening. A replay of this conference call will be available on our website under the investor relations section. I would also like to remind you that during the call, we will discuss some non-GAAP measures while reviewing Roots performance. You can find the reconciliation of those historic non-GAAP measures to the nearest comparable GAAP measure in the shareholder letter and our filings with the SEC, which are posted on our website at ir.joinroot.com. I will now turn the call over to Alex Timm, Root's co-founder and CEO.

Thanks, Joe. On today's call, I'll be providing additional context around Root's Q1 performance. I'll share insights into how we are increasingly leveraging our data science advantage to drive growth and improve operations and efficiency. I'll also talk about how we're elevating the experience we deliver to our customers, creating further separation from competitors. Then I'll turn the call over to Dan for a deep dive into our Q1 financials and path to sustained profitability. For the first time ever, Root generated over $200 million in direct written premiums in a quarter. This was a 23% year-over-year increase. And we did this while delivering $27 million of direct contribution. Our increase in profitability was driven primarily by improvements in our loss ratio. This is no accident. It was the direct result of discipline, focus, execution. As we continue to build our data sets, we create increasingly more predictive algorithms, improving our unit economics and enabling lower prices for consumers. We founded Root based on the belief that data and technology can fundamentally disrupt the $260 billion auto insurance industry. Keep in mind, this is an industry dominated by competitors who were founded before World War II. At Root, we have built an insurance company from the ground up based entirely on our own technology and machine learning. By creating highly advanced predictive algorithms, we are creating better experiences at better prices for consumers. Driving all of this work is our commitment to eliminating discrimination and bias in a product mandated by the government. So let me double click on what this means for consumers and specifically what we delivered in Q1. The biggest moment of truth in an insurance product is the claims experience. Root offers one of the fastest claims turnaround times in the industry. This is powered by our mobile platform that makes the claims process easy for customers and our proprietary claims automation system that makes response times fast. We have reduced the time between our customer notifying us of an accident and the estimate work beginning from days to seconds. This enables us to put cash in the hands of our customers in half the time of our competitors. And we are well on our way to delivering a fully autonomous claims experience to our customers. If 2020 taught us anything, It's that people want to and deserve to be treated fairly in all aspects of life. We have the unique ability to change the industry toward the arc of what's right. And we know that consumers are increasingly choosing brands, experiences, and products that align with their own values and sense of fairness. The state of the world today has put a bright light on injustice and bias, and Root is leaning in to evolve our industry away from both. To address this, last year we announced our Drop the Score initiative, a public callout of industry reliance on credit score and the inherent bias that the use of credit score perpetuates. We called upon state commissioners, industry leaders, and advocacy groups to work toward removing credit as a rating variable. In Q1, we doubled down on these efforts, releasing a detailed report of the bias that comes from using credit score to price insurance. and kicking off a grassroots campaign in educating consumers on the issue. And we're beginning to see the tide shift. Washington State recently ruled against the industry giant's request to keep credit score as a rating variable. Just a few weeks ago, 30 advocacy groups asked the National Association of Insurance Commissioners to address the racially discriminatory use of credit-based insurance scores. As the swell of support for this industry shaking change grows, it's clear that those with other ways of measuring risk will win. Our data science lead firmly positions us to do so. As we continue to build better products at better prices, while putting control back into the hands of the consumer, we'll continue to fuel growth and drive sustainable long-term profits. We'll do this through applying our data science and engineering expertise in everything we do. I'm thankful for the continued support of our investors, our team, and our customers. With that, I'll turn the call over to Dan.