Root, Inc.

Ladies and gentlemen, good morning. My name is Abby and I will be your conference operator today. At this time, I would like to welcome everyone to the Root Incorporated Second Quarter 2022 Earnings Conference Call. Today's conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, just press star 1 once again. Thank you, and I will now turn the conference over to Christine Patrick. You may begin.

Good morning, and thank you for joining us today. Root is hosting this call to discuss its second quarter 2022 earnings results. Participating on today's call are Alex Tim, co-founder and chief executive officer, and Rob Bateman, chief financial officer. During the question and answer portion of the call, our presenters will be joined by Dan Rosenthal, Chief Revenue and Operating Officer, Matt Ben-Octopore, Chief Technology Officer, and Frank Palmer, Chief Insurance 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 second quarter 2022 Form 10-Q, which was filed with the Securities and Exchange Commission last evening. 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 risks, 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, 2021, 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 and second quarter 2022 Form 10-Q released last 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 in talking about roots performance. You can find the reconciliation of those historical measures to the nearest comparable GAAP measures in our shareholder letter released last evening and our Form 10-Q filing with the SEC. which are posted on our website at ir.joinroot.com. I would now like to turn the call over to Alex Tam, Root's co-founder and chief executive officer.

Thank you, Christine. We continue to execute on our playbook of raising rates, tightening underwriting, and managing cash as we respond to prolonged difficulties with the supply chain and inflation. Despite this challenging environment, the proactive steps we are taking have resulted in further improvements to our financials. Through our tech stack and rating engine, year to date, we have been able to implement 35 rate filings with an average increase of 28% while filing revised insurance contracts in 23 states to tighten underwriting rules and reduce premium leakage. On a year-over-year basis, we have significantly reduced cash burn and improved our gross accident period loss ratio five points, adjusted EBITDA 59% and non-loss and LAE expenses by 57%. We focused on deepening our competitive advantage through continued investment in technology. We have shipped our fully integrated product, Carvana Insurance built with Root, which is showing improved attach rates in its early days. We believe that being able to offer an instant quote at the point of vehicle sale creates a product that works better for consumers and is something that our technology platform can uniquely provide. Though the current focus of our embedded channel is on our exclusive partnership with Carvana, our technology and embedded capabilities have driven discussions with additional prospective partners. We have also recently launched our digital agency. This allows Root to service customers that are not best suited for our particular insurance offering. It is a capital-light revenue stream that allows our partners to access our technology and distribution capabilities. While still early in development, we are excited to expand this offering in the future. We are constantly refining our models and the process around their development. This quarter, we made enhancements to the post-deployment review of our country-wide pricing model. This enhancement identifies segments that would benefit from pricing adjustments earlier informing necessary model improvements to be made even more quickly. We are also working on the next generation of our UBI pricing model, which leverages our growing data set. We believe this will lead to more accurate pricing, the ability to simplify and speed future model development, and reduced test drive days required for a UBI-based rate. Looking ahead, we're going to continue to execute on pricing and underwriting improvements through the back half of 2022. Along with our continued focus on expanding and deepening our embedded product experience, we expect to continue to drive improvements in our financial results while further building differentiated access to customers. I'll now turn the call over to Rob to discuss our operating results in more detail.