Root Inc., an insurance technology company, is planning to expand into new markets with the goal of establishing a nationwide presence for its car, home, and renters lines of business. The company recently reported its best-ever quarter, with CEO Alex Timm expressing confidence in their path to profitability.

In an interview with S&P Global Market Intelligence, Timm discussed the company's expansion plans and the key role of technology in enhancing underwriting results and improving unit economics. He mentioned, "We're in 34 markets today and we don't see a reason Root shouldn't be nationwide at some point here soon."

Timm highlighted the company's state expansion strategy, emphasizing a careful approach to entering new markets by assessing loss ratios and pricing. He explained, "When we add a state, we go in, we pick up a few thousand policies and then we measure the loss ratio and make sure that our pricing is holding up."

Root's CEO also emphasized the importance of leveraging technology to drive superior loss ratios compared to industry peers. Timm stated, "What we've developed is a platform that can ingest lots of data... We gather the data, retrain the models and then we get those new prices back out into the market."

Regarding strategies for sustaining growth in a volatile insurance market, Timm highlighted the company's focus on monitoring loss trends, competitive environments, and marketing channel performance. He emphasized the importance of profitable growth, stating, "We're making sure that every policy we acquire is going to return our target marketing ROI."

When asked about financial metrics for shareholders to monitor Root's progress towards profitability goals, Timm pointed out the significance of sustained loss ratios, fixed expense discipline, and earned premium growth. He stated, "If we can continue to generate more and more earned premium and sustain our loss ratios, that builds a very valuable company, almost by definition, long term."

Root Inc.'s CEO remains optimistic about the company's future growth prospects and the potential for nationwide expansion, building on the success of their best-ever quarter.