Q1 2021 Root Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to the range, Inc. First quarter 2021 earnings call. At this time, all participants are in a listen only mode.
After the speaker presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
If you require any further assistance please press star zero.
I'd now like to hand, the conference over to your Speaker today, Joe The Roche director of Investor Relations. Thank you you may begin.
Good morning, and thank you for joining us today, we're sort of saying this call to discuss its first quarter 2020. One earnings results participating on today's call are Alex Tim co founder and CEO and Dan Rosenthal Chief Financial Officer.
Last evening route issued of shareholder letter announcing its financial results. While this call will reflect items discussed with them that document for more complete information about our financial performance. We also encourage you to read our annual report on form 10-K for the year ended December 31, 2020 and our quarterly report on form 10-Q for the quarter ended March.
<unk> 31, 2021 to be filed with the Securities and Exchange Commission 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 <unk>.
And 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 form 10-K for the year ended December 31, 2020, where you'll see a discussion of factors that could cause the company's actual results to differ materially from these statements as well as our shareholder letter released yesterday evening, 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 reviewing routes performance you can find the reconciliation of those historic non-GAAP measures to the nearest comparable GAAP measure in the shareholder letter and our filings with the SEC, which are posted on our website at IR Dot join route Dot Com I will now turn the call over to Alex Tim.
Routes co founder and CEO.
Thanks, Joe on today's call I'll be providing additional context around routes Q1 performance.
Share insights into how we are increasingly leveraging our data science advantage to drive growth and improve operations and efficiency.
I'll also talk about how we're elevating the experience we deliver to our customers, creating further separation from competitors.
Then I'll turn the call over to Dan for a deep dive into our Q1 financials and path to sustained profitability.
For the first time ever route generated over $200 million in direct written premiums and a quarter. This was the 23% year over year increase.
And we did this while delivering $27 million of direct contribution our increase in profitability was driven primarily by improvements in our loss ratio.
This is no accident.
It was the direct result of discipline focus execution.
As we continue to build our datasets, we create increasingly more predictive algorithms, improving our unit economics, and enabling lower prices for consumers. We founded route based on the belief that data and technology can fundamentally disrupt the 260 billion dollar auto insurance industry.
Keep in mind. This is an industry dominated by competitors, who were founded before World War two.
At route we have built insurance company from the ground up based entirely on our own technology and machine learning.
By creating highly advanced predictive algorithms, we are creating better experiences at better prices for consumers.
Driving all of this work is our commitment to eliminating discrimination of bias and of product mandated by the government.
So let me double click on what this means for consumers and specifically what we delivered in Q1 the.
Biggest moment of truth and an insurance product is the claims experience route offers one of the fastest claims turnaround times in the industry.
This is powered by our mobile platform that makes the claims process easy for customers and our proprietary claims automation system that makes response times fast.
We have reduced the time between our customer notifying us of an accident and the estimate work beginning from days to seconds.
This enables us to put cash in the hands of our customers and half the time of our competitors.
And we are well on our way to delivering a fully autonomous claims experience to our customers. If twenty-twenty taught us anything it's that people want too and deserve to be treated fairly in all aspects of life.
We have the unique ability to change the industry towards the arc of what's right.
And we know that consumers are increasingly choosing brand experiences and products that align with their own values and sense of fairness.
The state of the World Today has put a bright light on in Justice and bias and route is leaning in to evolve our industry away from both to address this last year, we announced our drop the score initiative of public call out of industry reliance on credit score and the inherent bias that the use of credit score perpetuates.
We called upon state commissioners industry leaders and advocacy groups to work toward removing credit as the rating variable.
In Q1, we doubled down on these efforts releasing a detailed report of the bias that comes from using credit score the price insurance and kicking off of grassroots campaign in educating consumers on the issue.
And we're beginning to see the tide shift.
Washington State recently ruled against the industry Giants request to keep credit score as the rating variable just a few weeks ago 30 advocacy groups at the National Association of insurance Commissioners to address the ratio the discriminatory use of credit based insurance scores as the swell of.
Port for this industry shaking change gross.
It's clear that those with other ways of measuring the risk will win.
Our data science lead firmly positions us to do so.
As we continue to build better products at better prices, while putting control back into the hands of the consumer will continue to fuel growth and drive sustainable long term profit.
We will do this through applying our data science and engineering expertise in everything we do I'm thankful for the continued support of our investors our team and our customers with that I'll turn the call over to Dan.
Thanks, Alex and good morning, everyone.
The first quarter of 2021 was the successful one across both our growth and profitability measures and we are really proud of how our team hit the ground running.
You will find our full GAAP financial results contained in the shareholder letter, we published yesterday evening and here are some highlights on.
On the topline we grew direct written premium of 23% year over year to $203 million, our first quarter over $200 million.
This also represents sequential growth of 39% above Q4.
March was particularly strong and we believe some demand may have been pulled forward from April and May do the government stimulus.
Also as a result of the timing of the written premium growth our direct earned premium increased 11% year over year to $160 million.
Shifting to profitability direct loss ratio was 71% for the first quarter, including approximately $10 million of favorable direct prior period development, primarily impacting accident year 2020.
Adjusting for the impact of that prior development direct accident period loss ratio totaled 77%, a three point improvement year over year against Q1, 2020, and a 29 point improvement from Q1 2019, removing noise related to the pandemic.
Direct contribution really the key profitability metric for the business was $27 million for the quarter, a big improvement from a loss of $11 million in Q1 2020.
Direct contribution was 17% of direct earned premium for the quarter the.
The improvement in direct contribution was driven primarily by the direct loss ratio as I covered above.
The first quarter tends to be stronger seasonally as customers are out shopping and the impact of stimulus and returned to work has fueled car demand.
That created a great marketing environment for us providing momentum towards our growth goals.
As Alex mentioned, we're investing heavily to ensure we can scale our customer acquisition spend over the long term, while keeping the cash profile of the business intact.
To this end, we continued our test and invest approach in Q1 to build a broader set of acquisition channels.
We mentioned on our Q4 call that our state management activity contributed significantly to our loss ratio results and that has continued in Q1 we.
We are managing the business at a state level, adjusting pricing where necessary in the quarter, we completed eight filings the.
State management team successfully added an additional state our seasoned portfolio.
This portfolio expansion and targeted investment in season states drove seasoned premiums to 73% of earned premiums in Q1, along with a sequentially better seasoned loss ratio.
So for the first quarter, we have a lot of good momentum in our existing markets and we're hard at work expanding into new states.
We now have the required licenses to operate in 48 states.
The licensure of the necessary and challenging first step to writing policies and we now are in the process of filing our product forms and pricing models in multiple states.
We will share more on our progress here in the coming months.
We run the business on a direct basis and it's on my team and me to manage the capital and reinsurance components of the business to that end I am pleased to announce that we have successfully placed a multi year reinsurance treaty with a panel that includes current relationships as well as of few new names.
By shifting the day to April one we were able to attain better terms by also building better alignment with our reinsurance partners all of which is in line with guidance. We provided you on our Q4 call.
We are excited about the breadth and strength of our reinsurance programs as they remain a key component of capital structure.
We are very encouraged by what we accomplished in our first quarter. We grew the business the right way taking advantage of a strong demand environment and we delivered solid improvement in direct contribution and accident period loss ratio.
Our Q1 results demonstrate that our business model is working.
That said one quarter does not a year make and our team remains laser focused on delivering the expectations that we have shared.
With that Alex and I look forward to your questions.
As a reminder, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Your first question is from Michael Phillips with Morgan Stanley.
Hey, good morning, everybody. Thanks for the time.
The denim.
One of just make sure I understand covenants of this quarter as compared to last quarter I think it might be just semantics on the way I'm thinking about what you said.
Moving on to make sure.
Last quarter it was.
One of you want to focus on launching of new states, where use true when your model was okay.
And it felt like that was a bit of a slowdown of the national expansion plan. This quarter now the license in every almost every state.
And starting to rollout forms and pricing.
A few of those new states 11 of 12, New states of these motions and is that is that of difference is it now that you are confident in the model. When you can go into the new receipts or is it just simply getting the likelihood is out there and ready to go.
Sorry.
Yes.
No. We've got you Mike This is Dan Thanks for the question of Haven.
Hey, good morning.
Yes, good morning.
So the short answer Mike is the nothing is different from what we talked about on the Q4 call the.
The positive that we are disclosing as of last night is that we have utilized the shell entity to secure licenses in 48 states now and what that means for US as you know is thats step one in the process and now we are in the process of filing our product and our forms and all of our <unk>.
And pricing models to be able to put route in the market and begin writing policies and that work is actively advanced in.
As we said several states all in line with what we talked about on the Q4 call.
Okay.
So when you say this quarter that you are in the process of filing forms and pricing models in several of the new stage of that means that you. What you were seeing last quarter and now now that you do have confidence in that model the expanded into the newer states.
Absolutely that's right.
No we don't control the regulators, it's a necessary part of the process. It's something that we have invested deeply in over the years.
Have a wonderful ahead of regulatory relations, who is the former president of the NII Alex himself as an actuary, which as you know is quite unique helps and those regulatory conversations as well, but it's still a process in each day.
And we are actively engaged in that process in the states, where we are not yet writing policies.
Okay. Thanks, Dan.
Second question then is just on comments you listed five or six different reasons why the the margins improved this quarter I'm going to focus on one of those for the game for a second here.
And you talked you've said this before but maybe you can drill down more into better targeted marketing initiatives flow.
Good characteristics of what does that mean, how are you doing that how are you improving your targeting.
Targeted marketing to focus on better driving characteristics.
Absolutely. It's a good question, what we've really focused on is inside of our marketing channels and are.
And our marketing platforms has the ability to leverage all of the rich data that comes through the digital platforms in order to make sure that we're showing the right AD to the right customer at the right time and as we have grown we've gotten more and more data, which has allowed us to fine tune those data.
The science models.
But those across more and more of our marketing channels and that has allowed us to effectively skew the mix toward a more preferred book of business and toward lower loss ratio of customers.
Okay.
Your next question is from Ross Sandler with Barclays.
Hey, guys I'll leave the insurance questions to the experts, but just had a question about growth. So your your auto pitch.
It was up pretty nice sequentially could you just mentioned some of the marketing efficiency that you're getting.
So how do we think about that going forward of we turned the corner and we should expect kind of a sequential net adds on that.
And then can you talk about.
Retention rates how of the retention rates in the friendly.
And the improvement there thanks a lot.
Thanks, Ross this is Dan.
So first on <unk> I think everything is in line with what we have talked about in prior calls.
We are encouraged by the growth that we saw in the first quarter, we're focused on executing our plan for the rest of the year. We're focused on moving into additional states. Later this year as I mentioned earlier and all of that will drive <unk> growth in direct written premium growth in line with the guidance that we gave on prior calls.
Yes.
Our retention rates are in line with prior quarters as well as we've talked about we are deploying multiple strategies focused on enhancing retention and we expect that youll see those.
Those strategies pay off and show up in the numbers.
Ex time, Ross as you know for that to happen.
And at the same time, Youre seeing youre going to see an influx of new writings associated with the growth that as we have talked about.
Impact our loss ratio. So you have these tailwind and headwinds associated with the loss ratio that we continue to see playing out consistent with what we talked about on the Q4 call that net net over the course of the year will show loss ratio improvement.
Your next question is from your range <unk> with Goldman Sachs.
Hi, good morning, everybody.
First question.
The pull forward of April may shopping behavior into this quarter do you expect that sense of resulted in some slowdown in.
The next quarter or do you think fee I guess put differently.
Are your full year expectation still intact or do you think that you could actually come in ahead of him.
Of the outlook.
Thanks Arun.
As you know we've made clear we're not in the habit of providing quarterly guidance. So I'm not going to focus too much on Q2 versus Q1, although as you mentioned, we did see a pull forward of demand from April and May we believe into March in part.
The associated with the government stimulus.
As far as the year outlook, we just issued our annual guidance a little more than two months ago.
If something changes.
The warrants an update we will of course come back to you, but as you know we're five years removed from writing our first policy.
Something disruptive that has never been done before.
We are encouraged by the first quarter results. The business model is working the quarter exceeded our expectations. We know what the path is from here and we're focused on executing on our 2021 plan consistent with the guidance that we provided in February.
Okay.
And the <unk>.
Seasoned earned premiums as a percentage of total earned premiums clearly saw a nice move up there.
The continued move up there this quarter can you maybe help us think.
Try to quantify.
Where is that.
Okay. The end of 2021, considering that you are trying to maybe accelerate growth I realized that directionally, we may see a little bit of pressure, but.
Is it are we talking about 60% of the book, 70% of of the book, 80% of of the bulk of any help you can offer there would be helpful. Much.
Much appreciate it.
Thanks, Ron I think more or less in line with the trend that youre seeing.
As is consistent with how our investment in season States will continue to show up.
We talked about before we are focused on growth on our system.
R&R season States, where you see that sustainable repeatable growth and I expect that that will continue part of the uncertainty around it is just as we're working with the regulators.
States that are not yet seasoned how quickly will that happen to be able to get our telematics and pricing models into market. So that they can become seasoned states because of course our goal ultimately.
Is that all states will become season states as we work with regulators to put our models in the market.
Got it.
I'll, just try and sneak sneak in one more if I may.
Prior year development can you maybe talk about what drove the the released there.
Yes.
You would expect your own continued work by our reserving team looking at different trends in development of particularly bodily injury claims and particularly most of it was tied to the fiscal year 2020.
Thank you.
Again, if you would like to ask a question. Please press Star then the number one on the telephone keypad again that is star then the number one and your next question is from Phil Stefano with Deutsche Bank.
Yeah. Thanks.
Morning, and Dan I appreciate the update on the the <unk>.
The reinsurance treaty renewal.
Just a quick numbers type question, and then kind of more theoretical.
The 70% session the right way to think about the combined.
The reinsurance quota share and then as we think about the pushback in the renewal date can you talk to us maybe about the terms of conditions or how the conversations went with the panel.
The what.
Moving back.
Where are you getting from the new participants.
Thanks, Bill, yes, the assertion rate for the quarter was 63% and that was in line with expectations and what we talked about back on the Q4 call.
If you'll recall, we talked about the session rate coming down and then building back up in the second half of the year closer to that 70% number that you referenced and we are still in line with that trend.
As we have.
Completed the the April one treaty.
We're very pleased obviously reported out in the letter that we successfully placed the treaty. The terms are favorable to the treaty that we did on July one we've got a great panel of reinsurers that includes both new and existing partners.
And so we did see the economics improve we saw the treaty move from a one year treaty to a multiyear treaty and it's all consistent with our overall reinsurance strategy that we've talked about.
Okay.
Switching gears, a bit and going back to the autonomous claims processing and understood that this is an opportunity to move faster than average on the claims payment side, which I think just improves the.
The user experience for the product I guess, how do we think about the quality control of the review process for this I mean is there is there efficacy testing on past claim payments that were done do you sample past claim payments.
The the process is working as intended can you talk to us about that side of it.
Absolutely.
The short answer is yes, there is lots of defect detection and monitoring devices throughout that entire process.
The way we do this is we are regionally do it where the machine and the humans accurately both well process and look at claims and so that we can actually compare.
What the machine is doing versus what humans are doing.
That also allows us to always have a control set so that we can always be testing and looking at it in a very quantitative manner.
We're happy because actually the faster that we closed claims the cheaper we closed claims claims.
Claims do not get better with age that generally holds.
Because of all sorts of bad things can happen over time, if you don't close the claim so we're actually seeing that severity is benefiting from a lot of the automation.
Alright. Thanks.
Your next question is from David.
Net Madden with Evercore ISI.
Hi, good morning.
Couple of a couple of questions for me.
I guess first for Dan.
Just on the seasonality, which sounds like it helped <unk>.
As well as just the stimulus checks.
Also helping pests.
And Dan you mentioned, some demand being pulled forward.
I guess I'm wondering is there any way to size this Paul.
Paul forward of impact on growth. It sounds like you guys have a pretty good insight into it having of benefits I'm wondering if you could size that for us.
And secondly, just on the loss ratio.
Good to see the 77% direct accident period loss ratio continuing.
To improve.
I'm wondering.
What the benefit was from.
From tenure mix on the loss ratio, if I look year over year.
And specifically how it compares to the five point benefit you guys got in full year 'twenty. Thank you.
Okay.
Thanks, David.
So on the first question, we're not sizing the pull forward of the demand I think as you can imagine we're doing a lot on the marketing front.
Including both our traditional performance marketing strategies as well as our work around brand and we're doing a lot of test in investing and we're really seeing the fruits of that come forward, we think that the stimulus had an impact.
And frankly as the second quarter progresses, we'll get a better understanding of that and we'll come back and talk to you about it but it was it was significant enough David that we wanted to convey of both in the letter as well as live as far as from the <unk>.
The accident period loss ratio.
It's very interesting I think when we talked earlier.
Back in Q4, we thought that in the first quarter, our renewal percentage as a percentage of direct earned premium would still be a bit bigger and the new writings growth in the first quarter, obviously had more of an impact that you see our first $200 million a quarter in company history.
So we believe as you start to see that earn in you will see some of the season, but theres no question that the loss ratio of conversation in the tenure mix conversation.
As in line with prior quarters, which is we are going to have a year of significant growth.
Those new writings are going to drive pressure on the loss ratio in the short term offset by the state management and segmentation work as well as the focus on investing in the season states.
Great. Thank you.
Your next question is from Elyse Greenspan with Wells Fargo.
Alicia Your line is open.
And you may have your phone on mute.
Okay and your next question is from that of car Lady with J P. Morgan Securities.
Hey, Thanks macro the day with JMP Securities.
I noticed in the letter.
<unk> of new feature in the App, particularly with the test drive called checkpoints.
I was hoping you could talk about that a little bit kind of what.
The feedback has been I noted the the lift of engagement decided but particularly.
Are there any read throughs, yet to the impact that that might have on churn.
Terms of people sticking with the test drive in.
Converting or staying on to the policyholder.
Absolutely. So we focus a lot on making sure that during that test drive period.
There's lots of ways for consumers to engage and understand how they are driving and how theyre progressing throughout the process and that includes rewards that includes badges that includes different things like you're driving scores that you can review and as we continue to improve those features and iterate on those features we see.
The material uplift in engagement so people opening the app engaging with <unk> during that test drive period.
And that does two things.
The first it definitely increases the conversion rates so as consumers are more engaged.
We'll then turn to purchase more disproportionately and the second is what you mentioned is there is a correlation between engagement then post bind.
And long term retention and so we believe as we continue to invest in product.
And continue to rapidly shift new features to the App that we will continue to discover more and more features and that's really what we do here all day every day.
Have such rich data on our claims and and because we settle claim so quickly partly because most of our consumers have obviously, the the mobile app install of and so lots of our claims come through the mobile App. She gives us better data uhm on particular claims the.
That allows us the the basically to to monitor that date of real time much much faster and so as we see that day to come through we would take right.
Great. Thank you very much and the apologies for my dog of the background.
Currently growth.
Your next question is from the screen stand with the last part of town.
Hi, sorry about that the floor that was my my phone. Some of my first question played on the on marketing of side of things. So you know if you guys mentioned right. There was some growth pull forward, but it still sounds like you guys are positive about both I guess in the bigger sense and so should we still expect marketing.
The kind of continue to ramp up.
Yeah.
Thankfully, yes, everything is consistent with what we've talked about it on prior calls and the the first quarter played out in that sense. As we are expected we are still on track too.
Like way more than double of our sales and marketing spend for the year, we are focused on investing.
Investing in diversifying our marketing channels, we are having some brand spend after previously really doing nothing on that front and we're seeing real success.
Success in terms of awareness of the authenticity of the of the root brand.
And so as we talked about the our customer acquisition cost has been a bit elevated in the fourth quarter and continuing due to this year.
But these of the right investments to make and we are encouraged by the growth that is coming as a result of those investments.
Great and then you I think that's in that the direct contribution on what.
The help me stronger in the queue wine Uhm. It's just so we can get a little bit my color there in the other quarter of where we should think about that being seasonally weaker and then when you set the guide on the last letter for the direct contribution for the full year I'm, assuming then that guide uhm.
<unk> Q1, perhaps not installing the get wise, but had that kind of seasonality built in.
Okay. Thanks for the colors.
Your next question is from Josh Shanker with Bank of America.
Yes, good morning, everybody. Thanks for taking my question.
In terms of the drivers who you put on the books in the back half of March I assume a high proportion of those drivers or formerly individuals' with non continuous coverage, who bought auto insurance after receiving of stimulus checks.
Do those drivers yet to have a telematics score and are they reserved for on the books at a.
At a loss ratio of equivalent to or higher than most of the customers that come into your funnel.
So it is Alex so first.
Because of our reserves.
We obviously don't set reserves.
For future claims so the reserves.
It would reflect prior accidents and there would not be a material portion of those on the books from a March cohort at this time.
In terms of loss ratio in the economic performance of that cohort.
I'll go back we were underpriced in Georgia, and that's something that as we evaluated the performance there and looked at our models, we have fixed and we are in the process of fixing and that's why you see the rate increase in Georgia and the work that's going on there and we feel now that we are.
Improved and our underwriting and the as we focus growth in Georgia, It will be done in the right way.
I know, it's not nine o'clock. So I can sneak one other item and I know you guys don't give us newly issued.
Policies or gross policy ads is there a number in your given financials that you would point us too and sort of tracking new sales as a this under the did it shows that number in a way that satisfying.
Yes, I think we don't touch on that in our disclosures, but what we do show is.
Basically of Guy to do two is that retention is in line with prior quarters as well as with R. S. One.
And from that you can just turn a lot of information we have put a lot of disclosure out there around our <unk> and the different components that make it up.
Okay. Thank you.
Your next question of some Brian marriages.
Hey, Thanks, a couple of quick ones here for Ya first of all I'm, just curious metro mile announced this morning that they're going to now started except the bitcoin.
Premium payments as well as claims can mix, what's your thoughts on that any challenges that that presents.
Is Alex.
Think that there certainly could be challenges to accepting bitcoin.
But the.
We don't see that as of strong consumer demand right now we really just do whatever consumers are asking for and make sure that we're really focus there when we think about payment flexibility in payment options and all day.
It might be of fine items talk about.
We just don't see real consumers really wanting to transact with the quiet at this point.
Okay, Great and then like I guess my second question I'm just curious.
As you were transitioning from a period, where there was very very low miles driven and consumer driving habits may of been kind of different back in 2020, then they're kind of our today are you seeing anything different how is that kind of affecting your kind of telematics product.
Just because now all of a sudden people may be driving the 20th of those didn't work where they weren't just you know.
2020.
Cereal falloff in.
The sharing of data from our consumers.
Great. Thank you for the color.
Yeah.
Your next question is from Ryan Tunis with autonomous.
Hey, Thanks, good morning, guys.
So my question I guess is just on.
Some of the pull forward stuff with the growth.
Yeah, I had a similar number of hits this quarter that you did a year ago.
You spend about twice as much on marketing so.
I guess the average cost per AD is up a bit.
So my question is like if you think about the fact that marketing.
<unk> efficiencies down a little bit of <unk>.
Why would you assume that there is some pull forward going on like why wouldn't you just assume that.
Are you spending more of advertising is a little bit less efficiency, but.
Decision of C&I I'm, just trying to understand why.
Why do you think the stimulus related.
Seasonality, whether it's stimulus or tax season is true every year at the company and generally would be true.
In the industry broadly so we would see that.
In terms of the customer acquisition costs, particularly compared to last year. We also have we don't manage customer acquisition cost in isolation, we really look at it relative to the mix of business that we're bringing in and of the target loss ratios that we're bringing in so that we can make sure that we're appropriately managing the unit economics.
In terms of lifetime value of the CAC. So we don't look at cash again, just in isolation, we of many customers who are going to stay with US we know for decades and decades that should have much higher customer acquisition cost of our customer and that might.
Stay with us for six months and so.
We can't just look at that in isolation and that's part of the reason why we have launched a lot of our data science models on our marketing platforms that allow us to basically bid for the right amount for the right consumers in terms of the pull forward it is something.
That we expect every year to happen again, there is seasonality with the stimulus. We do believe that that had some sort of impact to pull forward that demand.
Just to quickly expand on that.
Dan.
The way, we really saw that show up as just from a conversion standpoint, as we look at the.
Channel diversity that Alex just touched on as well as some of the brand building expense, obviously, one of the things that we track very carefully as conversion and timing of conversion and that's where that's where we saw we believe the impact of the point forward in the March.
Got it.
Just I guess from.
Thinking about the obviously vehicle miles driven are up more.
Frequency, we sent in all of the underwriters hasn't fallen as much of the who would have thought.
Ah.
I think Texas has kind of helped the industry results some of it in the first quarter can you just talk a little bit about <unk>.
Maybe what you saw in the February.
From a frequency standpoint, the type of benefit you thought you might have gotten the from.
The Texas freezing of events.
Yeah, absolutely so the.
The Texas freezing event, certainly did not help.
Because we do cover of weather.
So with the.
With any sort of winter events and those sorts of things you will see actually increased frequency.
In general in in Texas, We also saw.
During that period of time.
The reduction in demand because of lots of people lost power.
But going forward, we don't see that being a material driver obviously of frequency.
Your next question is from Youssef Squali with QE.
Hi, This is Robert on for Youssef, Thanks for taking the question.
Just wondering if you can touch on how policies in four of poor.
<unk> growth and retention have trended thus far in the quarter were maybe in April.
Yes.
Thanks, Robert we're here to date of talking about the first quarter. So I don't want to get into development. Thus far in the second quarter. Obviously, we're encouraged by the growth that we saw in the first quarter showing up in direct written premium showing up in Pip at the same time that our loss ratio of <unk>.
Down.
Understood. Thanks.
And there are no further questions at this time.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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