Root, Inc. (NASDAQ:ROOT) Q4 2023 Earnings Call Transcript

Mike Ward: So maybe just on retention. It seems like you’ve been kind of gradually turning back up ad spend last couple of quarters. So just wondering what you’re seeing in terms of early retention stats on new business and maybe specifically the — some of the Direct business written last year that’s come up for a renewal, too?

Alex Timm: That’s a good question. We’re continuing to see retention rates actually up year-over-year. And that’s both a function of our prices. It’s also a function of our ability to target higher retaining customers. So we’re seeing nice trends in retention.

Mike Ward: Okay. And so maybe on kind of like the demographic breakup, just curious how your sort of customer profile today differs from where it’s been historically?

Alex Timm: I’d say that really, we still really target younger folks usually between the ages of 25 and 35 as our primary target audience. We do still skew monoline auto. And so we are still seeing that really be our bread and butter. We are shifting a bit more towards a preferred customer mix, so higher credit and some other demographic variables. But in general, we really are seeing our customer demographics stay pretty consistent.

Mike Ward: Got it. And then maybe just somewhat open ended but for 2024, just kind of wondering what you see — if you see any risks to margins this year?

Alex Timm: I’d say we’re constantly monitoring the environment. particularly the inflationary environment. We have seen used car prices steady out to actually decline somewhat. And we’ve seen — but we still see healthy inflation in many other areas. We’re constantly monitoring that and we are prepared to take rate appropriately as we see that come through. And if we do see that come through, you may expect us to pull back on growth. But really, we feel good about where we’re positioned today.

Operator: There are no further questions at this time. This will conclude today’s conference call. Thank you for joining us today. You may now disconnect.