Root Insurance Drops The Score in a Bold Move

Root Insurance, an Ohio-based insurtech startup, made headlines recently when it announced it was eliminating its score, a proprietary algorithm that it had used to determine insurance premiums. The move represents a bold shift in the company's business strategy, and is likely to have far-reaching implications for the insurance industry.

Root Insurance, founded in 2015, was one of the earliest insurtech startups, and was among the first to offer insurance premiums based on a customer's driving habits. The company's score was based on a customer's driving data, which was collected via a mobile app, and used to set rates. The score, which Root said was "uniquely tailored to each driver," was an integral part of the company's business model.

The move to eliminate the score was unexpected, as the company had previously indicated that it would continue to use it to set rates. However, in a recent statement, Root said it had determined that its score was no longer necessary. The company said that it had determined that its customers were already providing it with sufficient data to accurately assess risk and set rates, and that the score was no longer necessary.

Root's decision to drop the score is likely to have a significant impact on the insurance industry. Many insurers have embraced the use of data and algorithms to set rates, and the move by Root could be seen as a signal that the use of such technologies is no longer necessary. It could also be seen as a sign that the insurance industry is becoming more competitive, as companies compete for customers by offering lower rates.

Root's decision to drop the score is also likely to have a significant impact on the insurtech industry. The company's move could be seen as an indication that the technology is no longer necessary, and that insurers are beginning to focus more on customer service and competitive pricing. It could also be seen as a sign that the industry is beginning to realize that data and algorithms are not always the best way to assess risk and set rates.

Only time will tell what impact Root Insurance's decision to drop the score will have on the industry. However, it is clear that the move is a bold one, and it could have far-reaching implications for both the insurance industry and the insurtech industry. It remains to be seen how the industry will respond to the move, but it is certain to be a topic of much discussion in the coming months.