Root, Inc. Fair Value Disclosure
| 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Fixed maturities: | |||||||||||||||||||||||
United States Treasury securities and agencies | $ | 46.7 | $ | 2.5 | $ | — | $ | 49.2 | |||||||||||||||
| Municipal securities | — | 23.2 | — | 23.2 | |||||||||||||||||||
| Corporate debt securities | — | 159.0 | — | 159.0 | |||||||||||||||||||
| Asset-backed securities | — | 155.6 | — | 155.6 | |||||||||||||||||||
| Total fixed maturities | 46.7 | 340.3 | — | 387.0 | |||||||||||||||||||
| Cash equivalents and restricted cash equivalents | 388.0 | — | — | 388.0 | |||||||||||||||||||
| Total assets at fair value | $ | 434.7 | $ | 340.3 | $ | — | $ | 775.0 | |||||||||||||||
| 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair Value | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Fixed maturities: | |||||||||||||||||||||||
United States Treasury securities and agencies | $ | 46.2 | $ | — | $ | — | $ | 46.2 | |||||||||||||||
| Municipal securities | — | 23.5 | — | 23.5 | |||||||||||||||||||
| Corporate debt securities | — | 105.7 | — | 105.7 | |||||||||||||||||||
| Asset-backed securities | — | 116.6 | — | 116.6 | |||||||||||||||||||
| Total fixed maturities | 46.2 | 245.8 | — | 292.0 | |||||||||||||||||||
| Short-term investments | 11.8 | 3.0 | — | 14.8 | |||||||||||||||||||
Cash equivalents | 342.4 | — | — | 342.4 | |||||||||||||||||||
| Total assets at fair value | $ | 400.4 | $ | 248.8 | $ | — | $ | 649.2 | |||||||||||||||
Carrying Amount as of December 31, 2025 | Estimated Fair Value as of December 31, 2025 | Carrying Amount as of December 31, 2024 | Estimated Fair Value as of December 31, 2024 | ||||||||||||||||||||
| (dollars in millions) | |||||||||||||||||||||||
| Long-term debt | $ | 200.3 | $ | 204.1 | $ | 200.1 | $ | 204.9 | |||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Mar 4, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.