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Behind the Mobile-Based Insurance Carrier

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May 20, 2021—Billed as “the nation’s first licensed insurance carrier powered entirely by mobile,” Root Inc.’s Root Insurance launched in 2016.

According to Root product group lead Carl “Squire” Aschinger IV, the company is built around the idea of divorcing insurance rates from the usual driver data—age, where they live, their credit score, and other non-driving factors—and basing them in large part on how they drive.

Setting rates by relying on such factors, the company argues, leads to discrimination in pricing. Root has also committed to no longer factoring a customer’s credit score into its pricing by 2025.

“We believe a technology-driven insurance model leads to much more fair and accurate insurance pricing,” he says.

Root has gathered its customer telematics data through drivers’ smartphones from the get-go, allowing the company to hone how it evaluates drivers, Aschinger says.

“We’ve continued to collect more data and we’ve stayed in tune with development and professional data practices that has allowed us to evolve our data over time,” he says.

Root tracks familiar telematics: acceleration behavior, braking behavior, turning behavior, and how far and how often a customer drives. Behaviors that push the limits of safety can be disqualifying, Aschinger says.

Telematics is the heart of our pricing and underwriting practices,” he says, “so yes, if someone tends to be a riskier driver, we won’t write them a policy.”

With its focus on telematics and history of using smartphone-tracked data to figure into its pricing, Aschinger says Root Insurance, for the foreseeable future, will continue to use its customers Androids and iPhones to keep track of how they drive, despite the rise in connected vehicles.

The stance underscores Root Insurance’s point of being “powered entirely by mobile”—customers can buy a policy, customize it, file a claim, and get roadside assistance all through the app.

“Right now we believe there’s a huge opportunity in the mobile space,” Aschinger says.

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