United States securities and exchange commission logo
October 14, 2020
Alexander Timm
Chief Executive Officer
Root, Inc.
80 E. Rich Street, Suite 500
Columbus, Ohio 43215
Re: Root, Inc.
Registration
Statement on Form S-1
Filed October 5,
2020
File No. 333-249332
Dear Mr. Timm:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Form S-1 filed October 5, 2020
Management's Discussion and Analysis of Financial Condition and Results
Of Operations
Results of Operations
Certain Quarterly Information, page 85
1. We note your addition
of Ratio of Renewal to Direct Earned Premium to the table on page
86. Please address the
following:
Revise to disclose
a quarterly quantification of your renewal premium metric (i.e. the
numerator in this
newly presented ratio) in the table for each quarter presented;
Revise to disclose
a definition for this ratio that includes why you believe it to be an
important metric;
and
Tell us why you add
this ratio here but do not include it in your Key Performance
Indicators
disclosure on page 75.
Alexander Timm
Root, Inc.
October 14, 2020
Page 2
Correspondence dated October 13, 2020
Appendix A, page 3
2. Please revise your proposed disclosure to disclose why you expect a
decline in the Direct
Loss Ratio from the third quarter of 2019 to the third quarter of
2020. Although you
disclose why you expect a decline in loss and loss adjustment expense,
and you disclose
the expected levels of direct loss ratios, you do not appear to
explain why you expect a
decline in this ratio. To the extent the decline relates to the
factors described in Appendix
B to this correspondence, revise your disclosure to so indicate.
3. Please tell us why it is appropriate to record an anticipated $7
million in addition loss
reserves during the third quarter of 2020 for accident years 2019 and
prior when it does
not appear to be precipitated by a material change in actuarial
estimates. In your response,
tell us why this increase was not reflected in prior years and how
recording it in the
upcoming quarter is consistent with GAAP. Reference for us the
authoritative literature
you rely upon to support your anticipated accounting.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Bonnie Baynes at 202-551-4924 or Mark Brunhofer at
202-551-3638 if
you have questions regarding comments on the financial statements and related
matters. Please
contact John Stickel at 202-551-3324 or Justin Dobbie at 202-551-3469 with any
other questions.
FirstName LastNameAlexander Timm Sincerely,
Comapany NameRoot, Inc.
Division of
Corporation Finance
October 14, 2020 Page 2 Office of
Finance
FirstName LastName
