Root Inc (ROOT) 2024 Q3 法說會逐字稿

Ladies and gentlemen, greetings, and welcome to the Root Inc. 3Q '24 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matt LaMalva. Please go ahead.

女士們、先生們，大家好，歡迎參加 Root Inc. 24 年第三季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向大家介紹你們的主持人馬特·拉馬爾瓦。請繼續。

Thank you for joining us today. Root is hosting this call to discuss its third-quarter 2024 earnings results. Participating on today's call are Alex Timm, Co-Founder and Chief Executive Officer; and Megan Binkley, Chief Financial Officer.

感謝您今天加入我們。Root 主持本次電話會議，討論其 2024 年第三季獲利結果。聯合創始人兼執行長 Alex Timm 參加了今天的電話會議；和首席財務官梅根賓克利。

Earlier today, Root issued a shareholder letter announcing its financial results. While this call will reflect items discussed within that document, for more complete information about our financial performance, we also encourage you to read our third quarter 2024 Form 10-Q, which was filed with the Securities and Exchange Commission earlier today.

今天早些時候，Root 發布了一封股東信，宣布其財務表現。雖然本次電話會議將反映該文件中討論的項目，但要了解有關我們財務業績的更完整信息，我們還鼓勵您閱讀今天早些時候向美國證券交易委員會提交的2024 年第三季度10-Q表格。

Before we begin, I want to remind you that matters discussed on today's call will include forward-looking statements related to our operating performance, financial goals and business outlook, which are based on management's current beliefs and assumptions. Please note that these forward-looking statements reflect our opinions as of the date of this call, and we undertake no obligation to revise this information as a result of new developments that may occur. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause our actual results to differ materially from those expected and described today.

在開始之前，我想提醒您，今天的電話會議討論的事項將包括與我們的經營業績、財務目標和業務前景相關的前瞻性陳述，這些陳述基於管理層當前的信念和假設。請注意，這些前瞻性陳述反映了我們截至本次電話會議之日的意見，我們不承擔因可能發生的新事態發展而修改此資訊的義務。前瞻性陳述受到各種風險、不確定性和其他因素的影響，這些因素可能導致我們的實際結果與今天的預期和描述有重大差異。

In addition, we are subject to a number of risks that may significantly impact our business and financial results. For a more detailed description of our risk factors, please review our most recent 10-K, 10-Q and shareholder letter. A replay of this conference call will be available on our website under the Investor Relations section. I would also like to remind you that during the call, we will discuss some non-GAAP measures while talking about Root's performance. You can find reconciliations of those historical measures to the nearest comparable GAAP measures in our financial disclosures, all of which are posted on our website at ir.joinroot.com.

此外，我們也面臨許多可能對我們的業務和財務表現產生重大影響的風險。有關我們風險因素的更詳細說明，請查看我們最近的 10-K、10-Q 和股東信函。本次電話會議的重播將在我們網站的投資者關係部分提供。我還想提醒您，在電話會議中，我們將在談論 Root 業績的同時討論一些非 GAAP 指標。您可以在我們的財務揭露中找到這些歷史指標與最接近的可比較 GAAP 指標的調整表，所有這些都發佈在我們的網站 ir.joinroot.com 上。

I will now turn the call over to Alex Timm, Root's Co-Founder and CEO.

我現在將把電話轉給 Root 聯合創始人兼執行長 Alex Timm。

Thanks, Matt. Our third quarter performance was a landmark quarter for Root. We have consistently said that our top priority has been to reach profitability. And in the third quarter, we delivered it. This is a pivotal moment for Root and a firm validation of our business model, technology, and delightful customer experience. Our success is a direct result of the steadfast hard work of our entire team, and I could not be prouder.

謝謝，馬特。我們第三季的業績對 Root 來說是個具有里程碑意義的季度。我們一直表示，我們的首要任務是實現盈利。在第三季度，我們交付了它。對於 Root 來說，這是一個關鍵時刻，也是對我們的業務模式、技術和令人愉悅的客戶體驗的堅定驗證。我們的成功是整個團隊不懈努力的直接結果，我對此感到非常自豪。

To build upon this success and to support future growth, we amended our term loan with our long-standing partner, BlackRock, and significantly improved our cost of capital moving forward. Megan will provide more details shortly.

為了在這一成功的基礎上再接再厲並支持未來的成長，我們與我們的長期合作夥伴貝萊德一起修改了我們的定期貸款，並顯著降低了我們未來的資本成本。梅根將很快提供更多細節。

With profitability now achieved, we have the opportunity to reinvest our profits into the business in the quarters ahead, particularly investing in our growth engines in both the direct and partnerships channel.

現在已經實現盈利，我們有機會在未來幾季將利潤再投資到業務中，特別是投資於直接和合作管道的成長引擎。

With indirect, during the quarter, we continued to expand and test into new areas of the marketing funnel, and we expect that to continue in the quarters ahead. And this includes investing more in R&D marketing, which typically takes more time to produce results. With these investments, we expect to accelerate our policies in force growth over the long term.

透過間接方式，在本季度，我們繼續擴展和測試行銷管道的新領域，我們預計這種情況將在未來幾季繼續下去。這包括增加對研發行銷的投資，這通常需要更多的時間才能產生成果。透過這些投資，我們預計將在長期內加速我們政策的力量成長。

As a reminder, we came out of a hypergrowth period in the first quarter of this year, which weighted our book toward newer policyholders. This dynamic typically results in lower retention in the near term following rapid growth. We are now two quarters past the hypergrowth period. And as a result, we expect to see more contributions from renewals and therefore, a gradual return to policies in force growth.

提醒一下，我們在今年第一季走出了高速增長期，這使我們的書更傾向於新保單持有人。這種動態通常會導致快速成長後的短期保留率降低。現在，高速成長期已經過了兩個季度。因此，我們預計續簽政策將做出更多貢獻，從而逐步恢復政策成長。

Looking ahead, we believe there are material opportunities to expand our competitive advantage to additional data-rich channels. As always, we will explore these channels in a disciplined, rigorous manner and quickly grow or jettison these experiments based on results.

展望未來，我們相信存在將我們的競爭優勢擴展到其他數據豐富的管道的重大機會。一如既往，我們將以有紀律、嚴格的方式探索這些管道，並根據結果快速發展或放棄這些實驗。

We also made fantastic progress in our partnerships channel in the quarter, where we meet customers at contextually relevant times. New writings in the channel more than doubled from the prior year, and we launched several exciting new partnerships.

本季我們在合作夥伴通路方面也取得了巨大進展，我們在相關時間與客戶會面。該頻道的新文章比去年增加了一倍多，我們推出了幾個令人興奮的新合作關係。

Notably, we launched a partnership with Goosehead Insurance, where our technology has enabled agents to quote faster and more efficiently, thereby providing their clients with a great experience at a great price. The partnership channel is a key to our continued long-term success given the differentiated access to customers it provides.

值得注意的是，我們與 Goosehead Insurance 建立了合作夥伴關係，我們的技術使代理商能夠更快、更有效率地報價，從而以優惠的價格為客戶提供良好的體驗。合作夥伴管道是我們持續長期成功的關鍵，因為它為客戶提供了差異化的存取管道。

Our pipeline of partnership opportunities remains robust. And we believe we are well poised to drive strong growth in this channel in 2025 and beyond.

我們的合作機會管道仍然強勁。我們相信，我們已做好準備，在 2025 年及以後推動該通路的強勁成長。

Our laser-focused mindset on disciplined underwriting, driven by our proprietary technology platform and data science algorithms led to what we believe is an industry best 57% gross loss ratio. Thanks to our consistently strong underwriting, we have the opportunity to reduce rates in select states while not compromising our target returns.

在我們專有的技術平台和數據科學演算法的推動下，我們專注於嚴格承保的理念，實現了我們認為行業最佳的 57% 總損失率。由於我們一貫強大的承保，我們有機會降低選定州的利率，同時不影響我們的目標回報。

While we certainly believe lower rates for the best drivers can further improve growth, we do not set prices with a primary goal to gain market share. Our goal is to set prices accurately and our data science acumen and high telematics adoption rates allow us to effectively price and realize our target returns. As our data sets grow and we continue to retrain our models, we build an even stronger moat around our business.

雖然我們當然相信降低最佳驅動因素的費率可以進一步促進成長，但我們設定價格的主要目標並不是獲得市場份額。我們的目標是準確設定價格，我們的數據科學敏銳度和高遠程資訊處理採用率使我們能夠有效定價並實現我們的目標回報。隨著我們的資料集的成長以及我們不斷重新訓練我們的模型，我們圍繞我們的業務建立了更強大的護城河。

As we look to 2025, we are excited by the growth opportunities in front of us. We expect to add new partners, drive additional profitable growth, expand our geographic footprint, and deliver even better products at better prices to customers. Our team's determination to become the largest and most profitable personal lines insurance carrier in the United States is stronger than ever. And achieving net income profitability is an important milestone on that journey, yet our momentum does not stop here. We maintain a culture of discipline and innovation, which we believe translates to long-term value for all of our stakeholders.

展望 2025 年，我們對眼前的成長機會感到興奮。我們期望增加新的合作夥伴，推動額外的利潤成長，擴大我們的地理覆蓋範圍，並以更優惠的價格向客戶提供更好的產品。我們團隊成為美國最大、最賺錢的個人保險公司的決心比以往任何時候都更加堅定。實現淨利潤獲利是這趟旅程中的重要里程碑，但我們的動力不止於此。我們保持紀律和創新的文化，我們相信這將為所有利益相關者帶來長期價值。

I'll now turn the call over to Megan to discuss our operating results in more detail.

我現在將把電話轉給梅根，更詳細地討論我們的經營績效。

Thanks, Alex, and good evening, everyone. We could not be happier with our operating results.

謝謝，亞歷克斯，大家晚上好。我們對我們的經營業績非常滿意。

For the third quarter and on a year-to-date basis, we achieved net income profitability. This is a testament to our data advantages, disciplined underwriting, and unwavering focus on expense management. For the third quarter, we delivered net income of $23 million, a $69 million improvement year over year.

第三季和年初至今，我們實現了淨利獲利。這證明了我們的數據優勢、嚴格的承保以及對費用管理堅定不移的關注。第三季度，我們淨利潤 2,300 萬美元，年增 6,900 萬美元。

Along with this milestone achievement, we generated operating income of $34 million and adjusted EBITDA of $42 million, year-over-year improvements of $68 million and $61 million, respectively.

除了這項里程碑式的成就外，我們還實現了 3,400 萬美元的營業收入和 4,200 萬美元的調整後 EBITDA，年比分別增加了 6,800 萬美元和 6,100 萬美元。

Our outstanding results continue to be driven primarily by growth in our net earned premium, loss ratio performance, closely managed expense base and the responsible deployment of marketing investment. As we've consistently noted, we do not defer the majority of customer acquisition costs over the life of our customer, which leads to accelerated expense recognition relative to earned premium.

我們出色的業績繼續主要受到我們淨賺保費、賠付率表現、嚴格管理的費用基礎以及負責任的營銷投資部署的增長的推動。正如我們一直指出的那樣，我們不會將大部分客戶獲取成本推遲到客戶的生命週期中，這導致相對於賺取的保費而言，費用確認加速。

We saw significant increases in new writings, policies in force, gross written premium and gross earned premium compared to the third quarter of 2023. We achieved this growth while delivering a gross combined ratio of 89%, a nearly 30-point improvement year-over-year. The gross accident period loss ratio was 58%, a 4-point improvement year over year, driven by our continued investment in data science and technology.

與 2023 年第三季相比，我們看到新承保保費、有效保單、總保費和毛已賺保費顯著增加。我們實現了這一成長，同時實現了 89% 的總綜合成本率，年比提高了近 30 個百分點。在數據科技持續投入的推動下，事故期間總損失率為58%，較去年同期提升4個百分點。

In the third quarter of 2024, we ceded approximately 12% of our gross earned premium. We reduced the difference between our gross and net loss and LAE ratios to just one point, reflecting a reduction of 10 points year-over-year. Our improvements in reinsurance costs were made possible through our continued improvement in underwriting results.

2024 年第三季度，我們放棄了毛收入保費的約 12%。我們將總損失和淨損失與 LAE 比率之間的差異縮小至僅 1 個百分點，比去年同期減少了 10 個百分點。我們透過承保業績的持續改善實現了再保險成本的改善。

Operating cash flow was nearly $50 million in the quarter, primarily driven by net income, continued growth and strong loss ratio performance.

本季營運現金流接近 5,000 萬美元，主要受到淨利、持續成長和強勁的虧損率表現的推動。

In the fourth quarter, we successfully refinanced our term loan with BlackRock. We reduced the size of the facility from $300 million to $200 million, while maintaining $150 million of available growth capital. We improved our cost of capital from the original facility by at least 300 basis points. And as a result, we expect to see an approximate 50% run rate reduction in our interest expense moving forward. This will enhance our operating performance and enable further investment in our growth.

第四季度，我們成功為貝萊德的定期貸款進行了再融資。我們將設施規模從 3 億美元減少到 2 億美元，同時保留 1.5 億美元的可用成長資本。我們的資本成本比原來的設施提高了至少 300 個基點。因此，我們預計未來利息支出將減少約 50%。這將提高我們的經營業績，並為我們的成長提供進一步的投資。

Overall, we are thrilled at reaching net income profitability in the quarter. Our progress is far from over. We remain focused on prioritizing long-term profitable growth, expanding our geographic footprint and distribution channels and investing in opportunities for the business that present high return potential.

總的來說，我們對本季實現淨利潤感到興奮。我們的進步還遠遠沒有結束。我們仍然專注於優先考慮長期獲利成長，擴大我們的地理覆蓋範圍和分銷管道，並投資於具有高回報潛力的業務機會。

These investments will modestly increase operating expenses from our third quarter print. However, we believe it's the right decision to drive long-term success and shareholder value. We are excited for our future, and we appreciate your continued support.

這些投資將小幅增加我們第三季報告中的營運費用。然而，我們相信這是推動長期成功和股東價值的正確決定。我們對未來感到興奮，感謝您的持續支持。

With that, Alex and I look forward to your questions.

就此，亞歷克斯和我期待您的提問。

(Operator Instructions) Tommy McJoynt, KBW.

（操作員說明）Tommy McJoynt，KBW。

Hey, good evening, guys. Thanks for taking my questions. It sounded like you are expecting your appetite for growth spend to increase, I think, you said modestly going forward. Could you talk about sort of where you're looking to spend that? Is that consistent with geographic expansion? And then any way you could help us think about the magnitude of where that sales and marketing spend could go from 3Q levels?

嘿，晚上好，夥計們。感謝您回答我的問題。我認為，聽起來你預期成長支出的胃口會增加，你謙虛地說。能談談您打算把這筆錢花在哪裡嗎？這與地理擴張相符嗎？那麼您可以透過什麼方式幫助我們思考銷售和行銷支出在第三季水準上的變化幅度嗎？

Yeah. Thanks, Tommy. We continue -- when we look at our current marketing footprint and our partnerships, there's still a lot of opportunity for us to continue to reinvest the profit that we've generated into growth in the business. Obviously, we're very proud of the milestone we hit of becoming profitable, but it is a milestone. It is not the finish line. And we think that we can still build a much larger, more meaningful company, and we're going to continue to do that.

是的。謝謝，湯米。我們繼續進行——當我們審視當前的行銷足跡和合作夥伴關係時，我們仍然有很多機會繼續將我們產生的利潤再投資於業務成長。顯然，我們對實現盈利這一里程碑感到非常自豪，但這是一個里程碑。這不是終點線。我們認為我們仍然可以建立一家更大、更有意義的公司，我們將繼續這樣做。

And so what we're planning to do is to continue to expand our growth investments. That's going to be in our partnerships channel, and you will see some of that come through in acquisition expense. So bringing on new partnerships in the automotive and financial services and independent agency spaces.

因此，我們計劃要做的是繼續擴大我們的成長投資。這將出現在我們的合作夥伴管道中，您將看到其中一些透過收購費用實現。因此，在汽車和金融服務以及獨立代理商領域建立新的合作夥伴關係。

And then as well as mid- to upper funnel marketing channels. We are still in a minority of marketing channels that most in the industry use. And so we think that there's a lot of opportunity there. In terms of geography, we're actively working in state expansion.

然後還有中上漏斗行銷管道。我們仍然是業內大多數人使用的行銷管道中的少數。所以我們認為那裡有很多機會。在地理方面，我們正在積極致力於國家擴張。

We're only in 75% of the population, and there's no reason we shouldn't be in 100%. So I think that when we expand geographies, you're also going to see us deploy more growth capital into those new geographies to drive profitable growth over the long term. Megan can comment a bit more on the magnitude and what we're expecting near term.

我們只佔人口的 75%，沒有理由不佔 100%。因此，我認為，當我們擴展地域時，您也會看到我們在這些新地域部署更多的成長資本，以推動長期獲利成長。梅根可以就其規模和我們近期的預期發表更多評論。

Yes. Thanks, Alex. And just to reiterate what Alex said, I mean, we're just getting started. We're really proud of the results this quarter, and we are looking to continue reinvesting in key areas of the business. We believe that this quarter is really proof that our model is working.

是的。謝謝，亞歷克斯。只是重申亞歷克斯所說的話，我的意思是，我們才剛開始。我們對本季的業績感到非常自豪，我們希望繼續在關鍵業務領域進行再投資。我們相信，本季確實證明了我們的模式正在發揮作用。

So we're going to continue our disciplined and opportunistic approach to performance marketing, and we're going to continue investing in the partnership channels. As it relates to sales and marketing expectations, what I'll say is our focus remains on driving new business at our target return levels.

因此，我們將繼續採用紀律嚴明和機會主義的績效行銷方法，並且我們將繼續投資於合作夥伴管道。由於它與銷售和行銷預期有關，我要說的是，我們的重點仍然是在目標回報水平上推動新業務。

So we expect to invest as we continue to identify and source profitable growth opportunities. And what we spend in sales and marketing in a given quarter is heavily dependent on the competitive environment. And we expect that our direct marketing machine will react as it always does to ensure that we're continuing to hit our target unit economics.

因此，我們希望在繼續尋找和尋找有利可圖的成長機會的同時進行投資。我們在特定季度的銷售和行銷支出很大程度上取決於競爭環境。我們預計我們的直銷機器將一如既往地做出反應，以確保我們繼續實現單位經濟效益目標。

So we're going to continue monitoring the efficiency of the spend. Overall, I would say we're not really in a position where we're going to give a specific target on marketing investment for Q4 or really into 2025, but we're going to continue the same approach that we've had in the past on driving profitable new business.

因此，我們將繼續監控支出的效率。總的來說，我想說的是，我們並沒有真正制定第四季度或 2025 年行銷投資的具體目標，但我們將繼續採用與 2025 年相同的方法。 。

And you may have touched on it a little bit there, but can you give us an update on how you guys are seeing the retention rates of your book of business go, especially the, perhaps policies that you put on over the last 12 months? And then when you think about the potential to reduce rates in certain markets, do you anticipate that will help your retention rates further?

您可能已經稍微觸及了這一點，但是您能否向我們介紹一下您們的業務保留率的最新情況，尤其是您在過去 12 個月中實施的政策？然後，當您考慮在某些市場降低利率的潛力時，您預計這會進一步提高您的保留率嗎？

Yes. Thanks for that question, Tommy. Yes, I think the first thing to notice and to note is, and as I said in my prepared remarks, we have doubled -- we've nearly doubled the size of the business on a year-over-year basis. And when we've done that in that real hypergrowth period, what that's resulted in is a lot of brand-new PIF. And so we had a very young PIF and that young PIF tends to churn a little faster than older PIF.

是的。謝謝你提出這個問題，湯米。是的，我認為首先要注意的是，正如我在準備好的發言中所說，我們的業務規模幾乎比去年同期增長了一倍。當我們在真正的高速成長時期做到這一點時，就會產生大量全新的 PIF。因此，我們有一個非常年輕的 PIF，而年輕的 PIF 往往比舊的 PIF 流失得更快一些。

And what we've seen as our PIF has continued to age is we've seen churn come down. And we've seen that continue to abate through this quarter. We don't think we're at normalized levels yet.

隨著 PIF 的不斷老化，我們看到客戶流失率下降。我們已經看到這種情況在本季繼續減弱。我們認為我們尚未達到正常化水平。

So we think that's going to continue. And part of that has created a nice tailwind in the business where it's allowed us to grow PIF a little bit more gradually in this quarter to date. So we are seeing those favorable trends on PIF churn.

所以我們認為這種情況將會持續下去。這在一定程度上為業務創造了良好的推動力，使我們能夠在本季度迄今為止逐步成長 PIF。因此，我們在 PIF 流失方面看到了這些有利的趨勢。

In terms of rate reductions, we absolutely expect that will help retention. The lower your rates are, and with those rate reductions, you will see better retention rates. And we should also experience higher conversion rates. And so we think those two things will be good news for the business.

就費率降低而言，我們絕對希望這將有助於留住員工。您的費率越低，隨著費率的降低，您將看到更好的保留率。我們也應該體驗到更高的轉換率。因此，我們認為這兩件事對企業來說將是個好消息。

And actually, just one quick one on the retention side that I forgot to ask, one element of that. The partnership channel versus the direct-to-consumer, the retention rates of those businesses, do they differ materially?

事實上，我忘了問一個關於保留方面的快速問題，這是其中的一個要素。合作夥伴通路與直接面向消費者的管道，這些業務的保留率是否有重大差異？

Yes. The partnerships channel has much higher retaining business. And so we see that really across most of our partnerships. So you do see, particularly when you're building sort of that differentiated access to customers where a lot of your customers are buying for the customer experience and the ease of the technology is providing, that allows -- or what that does is it creates a much stickier customer. And so we have seen that.

是的。合作夥伴通路擁有更高的保留業務。因此，我們在大多數合作夥伴關係中都看到了這一點。所以你確實看到了，特別是當你建立一種差異化的客戶訪問方式時，你的許多客戶購買產品是為了客戶體驗，並且技術提供的便利性，允許——或者說它創造了什麼更具黏性的客戶。我們已經看到了這一點。

We've also seen that those policies are just fatter policies, higher average premium, more vehicles per policy. And so that's also really been helpful as well.

我們也看到，這些保單只是更厚的保單、更高的平均保費、每份保單的車輛更多。所以這也確實很有幫助。

(Operator Instructions) Yaron Kinar, Jefferies.

（操作員說明）Yaron Kinar，Jefferies。

Maybe to follow up on some of the churn and retention questions. If we were to look at cohorts, are you seeing churn improving, namely if we have a first year cohort from the most recent year, is the churn there better than the first year cohort a year ago and two years ago and the like? And the same, I guess, will be true for other cohorts. I just use first year as an example.

也許是為了跟進一些流失和保留問題。如果我們要查看群組，您會發現客戶流失率有所改善，即如果我們有最近一年的第一年群組，那麼那裡的流失率是否比一年前和兩年前等的第一年群組更好？我想，對於其他群體也是如此。我只是以第一年為例。

Yes, that's a good question, Yaron. Yes, we have seen the -- when we look at churn and you've got to control for what channel it's coming from because, again, if you look at it on a blended basis, you do see those partnership new writings in those cohorts.

是的，這是一個好問題，亞龍。是的，我們已經看到了——當我們考慮客戶流失時，你必須控制它來自哪個管道，因為，如果你在混合的基礎上審視它，你確實會在這些群體中看到那些合作夥伴的新作品。

Because they're retaining longer that those new cohorts are going to have higher retention, all else equal because of that. I'd say definitely, as the -- over the last couple of years, as we've seen the rate environment stabilize, you've definitely seen improved retention rates. So I think that it's modest, but we are seeing improvement in cohort-based retention.

因為他們保留的時間比那些新群體的保留時間更長，因此其他條件都相同。我肯定地說，在過去幾年中，隨著我們看到利率環境趨於穩定，您肯定會看到保留率提高。所以我認為這是適度的，但我們看到基於隊列的保留率有所改善。

Got it. And would you expect that to accelerate or just remain kind of a modest improvement cohort by cohort?

知道了。您認為這種情況會加速還是只是保持適度的改善？

I think there's a couple of things that might -- that will accelerate it. One is certainly the continued expansion of the partnership channel as a percent of our new writings. That distribution channel has grown 130% for us year-over-year, which is tremendous, and we don't see that slowing down. So I think that's definitely going to continue to improve that.

我認為有幾件事可能會加速這一進程。其中之一當然是合作夥伴管道在我們新著作中所佔的比例不斷擴大。我們的分銷管道同比增長了 130%，這是巨大的，而且我們認為這種增長不會放緩。所以我認為這肯定會繼續改善。

The second is as we continue to expand our more preferred customers into some other marketing channels that aren't necessarily just lower funnel marketing channels, you tend to see a more preferred mix of business and a bit more stickier business when you do that. And so we do anticipate there to be some improvements. We're also making some changes to the product that we think makes it easier for customers to stay with Root for the long term. And so we certainly have a lot of actions that we want to take to continue to improve retention.

第二個是，隨著我們繼續將更受歡迎的客戶擴展到其他一些行銷管道，而這些管道不一定只是較低的漏斗行銷管道，當你這樣做時，你往往會看到更受歡迎的業務組合和更具黏性的業務。因此，我們確實預計會有一些改進。我們也對產品進行了一些更改，我們認為這些更改可以讓客戶更輕鬆地長期使用 Root。因此，我們當然希望採取許多行動來繼續提高保留率。

Okay. And then just a question on pricing. I appreciate you saying that you're looking to maybe lower rates a little bit here just given where the loss ratio is. I think if we look at recent data, we haven't seen much of that yet, maybe a little bit in the last few weeks. I guess with the loss ratio running well below target for the last four quarters, why is this something that is only now coming about?

好的。然後只是一個關於定價的問題。我很欣賞你說，考慮到損失率，你可能會想在這裡降低一點費率。我認為，如果我們看一下最近的數據，我們還沒有看到太多這樣的數據，也許在過去幾週看到了一些。我想，過去四個季度的損失率遠低於目標，為什麼現在才會發生這種情況？

And how -- well, I'm not sure you'd be willing to talk about this, but how aggressive would you be willing to be given where the loss ratio is?

好吧，我不確定你是否願意談論這個問題，但如果給出損失率，你願意採取多大的積極態度？

What we're always doing is we're always looking at each market, and we're making sure that we are, to the best of our ability, hitting our target loss ratios. That we're not too high on those targets and that we're not too low. And we set those target loss ratios really where we think is the most efficient place to be operating the business. There have been a handful of states that we have reduced rates in, but we're not going to necessarily reduce rates just to gain market share. We don't really operate that way.

我們一直在做的是，我們始終關注每個市場，並確保我們盡最大努力達到我們的目標損失率。我們對這些目標的要求不算太高，也不算太低。我們將這些目標損失率真正設定在我們認為經營業務最有效的地方。我們已經在幾個州降低了費率，但我們不一定只是為了獲得市場份額而降低費率。我們其實並不是這樣運作的。

We're always looking to hit our targets. And when we observe credible enough data to tell us that we should be lowering rates, we'll do that.

我們始終致力於實現我們的目標。當我們觀察到足夠可信的數據來告訴我們應該降低利率時，我們就會這樣做。

I think the other important thing to notice is we're not just lowering rates, and it's not just base rates, we're also improving segmentation. And as we improve segmentation through our new loss models and our new telematics models that we're constantly iterating on and innovating on what we believe to be one of the fastest pace in the industry, that then also allows you to see real benefit in the loss ratio. And as that comes through, you should anticipate us to then respond as well with base rate decreases. But we're actively looking at that, and we're constantly -- we think we're very fast to react.

我認為另一件值得注意的重要事情是，我們不僅降低了費率，而且不僅僅是基本費率，我們還改善了細分。隨著我們透過新的損失模型和新的遠端資訊處理模型改進細分，我們不斷迭代和創新我們認為是行業中最快的模型之一，這也讓您看到真正的好處損失率。當這種情況發生時，您應該預期我們也會以降低基本利率來回應。但我們正在積極關注這一點，我們一直認為我們的反應速度非常快。

(Operator Instructions) Ladies and gentlemen, as there are no further questions, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

（接線生指示）女士們、先生們，沒有其他問題了，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。