Root Expands Auto Insurance Footprint with Hyundai Capital America Alliance
In a strategic move to enhance its presence in the automotive insurance sector, insurtech leader Root has formed a partnership with Hyundai Capital America, the financing division of Hyundai Motor Group. This collaboration aims to offer competitive, data-driven auto insurance rates directly to consumers purchasing vehicles.
The alliance marks a significant step for Root, aligning perfectly with its strategy to scale through embedded solutions and partnership-driven distribution. Hyundai Capital America is known for providing financial services for Hyundai, Kia, and Genesis brands, making this partnership a prudent choice for Root.
“This collaboration diversifies and augments Root’s distribution channels,” stated Alex Timm, co-founder and CEO of Root. “Our partnership channel has witnessed a remarkable 115% growth in new writings year-over-year, as we continue to broaden our reach within automotive, financial services, and agent sub-channels.” Timm further emphasized the importance of partnerships and embedded insurance as a cornerstone of Root’s customer acquisition strategy.
“Creating unique access to customers is a fundamental aspect of our company strategy,” Timm remarked. “As our partnership channel expands, we aim to streamline the purchase experience by transitioning partners to fully embedded solutions.”
This partnership with Hyundai comes on the heels of a successful financial year for Root. The company reported a net income of $22.1 million in the fourth quarter of 2024, a significant turnaround from a $24 million net loss in the same period the previous year. Over the entire year, Root achieved a net income of $30.9 million, reversing a $147.4 million net loss in 2023. The company also saw net premiums earned increase to $299.7 million in Q4, up from $176 million, with the combined ratio improving markedly to 91.5 from 111.9.
The partnership with Hyundai underscores Root’s ambition to capture a larger market share in the auto insurance sector, where embedded and partner-driven models are increasingly favored by insurers and automobile manufacturers alike.
As of the afternoon of April 2, shares of Root were trading at $124.78, reflecting a 2.97% decline from the previous close.
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