When Transcripts Go Wrong

Yesterday’s FIN post discussed the dismal condition of the insurtech sector, focusing in part on Root, the Columbus, Ohio-based insurer that announced fourth quarter earnings on February 23.

One of the biggest questions about Root is the enormous amount of money (more than $1.5 billion) the company has lost; after years of operations it is still burning through nine digits of cash every year. The issue came up during the earnings call, and here is how the official transcript quotes Root chief financial officer Rob Bateman as responding to a Citi analyst’s question:

[O]n the cash burn, if you think about what we did, we burned about $400 million in cash in 2021, another $200 million in roughly in 2022. And we expect to have that again, for 2023.

It’s a pretty damning prediction, and unsurprisingly trade publications picked up on this quote. “Root is projected to burn around $200mn in cash in 2023, maintaining a similar burn rate to 2022, and expects to reach the bottom of its cash burn in the next two years,” reported the insurance trade publication Inside P&C.

But the quote didn’t look right to FIN, so we didn’t use it. And, sure enough, after yesterday’s post published, a Root spokesperson confirmed for us that Bateman said the company would halve its burn rate in 2023, not have the same burn rate as in 2022.

Kind of a big difference. Root says it will correct the transcript.