Root Insurance Stock Review and Analysis. Cheaper Auto Insurance | Growth Stocks

Root Insurance Stock Review and Analysis. Cheaper Auto Insurance and Growth Stocks.

What’s up everyone, Welcome to Broke Man Finance. A Channel where were not trying to sell you anything. We just share our opinions on stocks and finances to help you make the best decision possible with your money.

If you’re like me and you’re looking for a potential game changer or growth stock to add to your portfolio, then this is the video for you.

Today, I’m reviewing the insurance company called ROOT and why it just may be the next big hit and it could be cheaper auto insurance for you.

Earlier this year, CNBC had Root Insurance listed as #18 on their top 50 Disruptor List.

Typical auto insurance companies take into account multiple factors when they determine what rate you get for car insurance. They look at age, sex, driving history, credit score, type of vehicle and location when determining how much you will pay them to insure your vehicle.

Root has developed a way to change how we pay for car insurance and bring a systemic change to the insurance industry.

Root provides individual specialized quotes based on your driving behavior not your demographics.

Here’s how it works, you download the APP, allow it to track your driving behavior for a period of time. During this time, its monitoring your driving habits, such as distracted driving, or texting while driving, smooth breaking, gentle turning, and safe driving hours.

Unlike its competitor Progressive, Root will not insure someone if they deem it too risky. Which in return has saved them potentially millions in payouts.

Think of it this way if you drive crazy, then you insurance payment may be crazy.

Root IPO’d back in October at around 27 dollars a share and they didn’t have the surge that we have seen compared to other IPO’s this year.

The current price is around 13 dollars a share which it has dipped since the initial IPO. However, it is common for stocks to experience a dip after an IPO.

But here is a part I like about them.
In 2016, its first year, the company wrote just $150,000 in direct premium in its home state of Ohio. Only three years later, the company did $451 million across eight states.
They are now in over 29 states and can provide access to 65% of the Nations Drivers.
They are also adding homeowners and renter’s insurance to current customers in some states.

Let’s talk about some cons of the company or things that may drive customers away.
1. They do not insurance motorcycles, atv’s or commercial vehicles. This could hurt them to attract customers since a lot of people want to bundle their vehicles together and not have separate insurance providers and bills

2. You do everything online so there is no direct local agent to deal with. I don’t see a lot of older people being attracted to the company due to this. Typically, older people and people in rural areas want that go to person to deal with. It makes them feel more comfortable and trustworthy. However, as time goes on. People are more and more comfortable doing business online.

3. They are not in every state. Although they are expanding rapidly, they still have a lot of work to do to get in all 50 states and establish a reputation for consumers.

4. Bad drivers just may drive good for a few weeks during the driver’s test.

5. Overall, it’s still a new business and a lot of unknowns.
Personally, I like the idea of the company and the direction they are headed in. Innovation like this that challenges the current process has the potential to make people a lot of money.

We can look at Amazon, Robinhood, Tesla, AirBNB, DoorDash, Uber/Left all these companies and concepts that either challenged processes or came up with new ideas has proven to be successful.

I’m not saying go all in Vegas style but this is a company that has attracted my attention.
I’m looking to see their next quarter’s earnings report and get a better look at their finances before adding more shares to my portfolio.

That is it for me today guys, let me know what you think in the comment sections. As always thanks for watching, stay safe and we will see you on the next video.

#root, #rootinsurance, #insurancestocks

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