Root, Inc.

Thank you for standing by. My name is Robert McArthur, and I will be your conference operator today. At this time, I'd like to welcome everybody to the Root Incorporated Q2 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a questions and answers session. If you would like to ask a question during this time, held on the keypad. If you'd like to withdraw your question, simply press star 1 again. Thank you. Now I would like to turn the call over to Jody Baker, Vice President and General Counsel. Please go ahead.

Good morning, and thank you for joining us today. RUE is hosting this call to discuss its second quarter 2023 earnings results. Participating on today's call are Alex Timm, Co-Founder and Chief Executive Officer, and Megan Binkley, Chief Financial Officer. During the question and answer portion of the call, our presenters will be joined by Matt Benakdipour, 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 Q2 2023 Form 10-Q, which was filed with the Securities and Exchange Commission last evening. Before we begin, I want to remind you that the 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, 2022, 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 in Q2 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 while talking about Root's performance. You can find reconciliations of those historical measures to the nearest comparable GAAP measures in our shareholder letter released last evening and our Form 10-Q filed 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.

Thank you, Jody, and welcome everyone. Q2 was a great quarter for the company. This is the result of our intense work and focus on pricing and underwriting, which has allowed us to reignite profitable growth. Due to our loss ratio, we are uniquely positioned to capitalize on today's marketing environment, while much of the industry is continuing to struggle to underwrite profitably. As we've consistently stated over the last 18 months, We believe this was made possible by our superior technology that allows us to identify and react quicker than competitors to changes in the pricing environment. The early actions afforded by this advantage are now evident in our results as we posted the highest margin in the history of the company while growing new writing 65% quarter over quarter. In the second quarter, we launched a previously announced partnership and also launched our telematics capabilities on our embedded platform. Our current partnership funnel is strong and continues to grow. This growth has been fueled by our early proof of differentiation in our Carvana partnership, where we have tripled the customer adoption by moving to our proprietary product. We are excited by the continued momentum that we are building on this platform. Our direct new writings growth in Q2 was driven by reactivating our marketing and product capabilities. This includes deploying marketing in additional states as loss ratios improve, expanding underwriting capabilities, and opening up additional product experiences to customers. With our strong loss ratio performance, we were able to drive this growth while exceeding our profitability targets. We believe we are currently experiencing strong tailwinds in this channel, as we've seen highly favorable marketing costs driven by the competitive environment. and are diligently monitoring this environment on a daily basis to ensure we continue to drive profitable growth. From the beginning, we've stated our belief that machine learning and technology would revolutionize the insurance industry while delivering a superior customer experience. This founding principle continues to guide us today. We made progress on this strategy in our second quarter by deploying our newest lost cost model with an estimated 17% improvement in predictive power. We continue to believe this cornerstone of our strategy is in the early stages and that over time, these capabilities will provide outsized returns to our customers and shareholders. With the combination of loss ratio improvements, technology advancements, direct growth, and embedded momentum, we believe we are on the path to profitability with the capital that we have. We are focused on driving the business forward and are proud of the progress we have made to date. I'll now turn the call over to Megan to discuss our operating results in more detail.