July 28, 2020

What does your zip code have to do with your driving ability? What about your gender, education level, profession — even marital status? 

Not a whole lot. But there’s a good chance your insurance rates are based on at least one of those traits. 

“The factors typically used to price insurance policy have a lot of inherent bias, often disproportionately affecting groups such as people of color and recent immigrants,” said Raja Chakravorti, a general manager at Root. “They don’t reflect what your actual risk is.” 

It’s a broken system, said Chakravorti, but it’s Root’s mission to remake insurance into a more transparent industry. Instead of using factors like group or demographic data to price insurance, the company bases its rates primarily off customers’ driving behaviors measured through a mobile app. The safer the driver, the better the rate.

While that seems straightforward enough, Chakravorti said that other companies have been slow to adopt similar technology to facilitate fairer insurance practices. Building the technology required while completely changing a core part of how companies run can pose serious roadblocks. 

But if Root was truly going to “unbreak” insurance, leaders at the company realized they’d have to widen their scope beyond their own office walls. 

“Root started as a direct-to-consumer company, but we’re enhancing the trajectory of what we are doing,” Chakravorti said. “We’re thinking about our platform as something that can help businesses of all sorts.”

With that in mind, they launched Root Enterprise, a team focused on building SaaS products for companies to better understand their customers and better assess risk. 

So how does an insurance company go about building an enterprise product? 

 

Root office

 

Why would an insurance company build an enterprise product, anyway? 

General Manager of Enterprise Raja Chakravorti: If you think about the mission we’re trying to solve at scale, we’re limited to what we’re doing in our direct-to-consumer business. But by building a software as a service platform, we can extend that mission broadly.

We’re an insurance company, but we’re also a technology company. Our value is built on the ability to show that our technology can be broadly applicable. What we’re developing is a new way to understand risk — in a nuanced way that’s focused on actual human behavior. We have the potential to help people across a lot of different industries.

Product Director of Enterprise Ryan Letcher: At the most fundamental level, we think our products tell us something important about the way people move in the world — and how safe they are when they do it. We have initial entry points for the product, one around insurance and one around fleet management, but we’re still in our earliest days and we have new market areas to uncover. 

In terms of building the product, we’ve focused on a streamlined mobile app and an SDK. We’re using the learnings that Root has been able to gather over the years and making sure we’re bringing those to life for our customers.

 

MINIMIZING BIAS IN CODE

To truly make insurance fair, the tech team must ensure their code remains as unbiased as possible. The engineers have instituted an algorithmic bias book club to learn more about how to build responsible tech and leverage actual data from drivers to check their work. “We get to not only develop machine learning models that understand driving and predict driving behaviors, but we get to correlate that data against real-world data that informs how fair our policies are to our drivers,” Senior Director of Engineering Scott Parker said.

 

Root insurance

 

What tools are you using to build Root Enterprise?

Parker: Our back end is primarily written in Ruby on Rails. We have some data engineering work that gets written in Python. On our mobile devices, most of it is written in native mobile code: Objective C and Swift for iOS, and Java for Android. Increasingly, the mobile applications that we’re developing and launching for Root Enterprise are built with React Native. All of the services for these products are hosted in AWS.

 

Root uses a rather unique methodology. What is it?

Parker: I’ve worked with frameworks like Scrum or Kanban where there are a defined set of roles and handoffs. That just doesn’t work for what we’re doing here. A lot of our process boils down to somebody putting a good idea in writing, and then everyone getting together to refine that idea together. We make sure everyone has an opportunity to weigh in on what we’re building and everyone leaves a project kick-off meeting ready to work. 

It means the engineers do a lot more discussing and debating than a lot of other engineering teams I’ve been part of. But it also means each engineer understands the product and the business case for that product far better than any engineering team I’ve been part of. 
 

A lot of our process boils down to somebody putting a good idea in writing, and then everyone getting together to refine that idea together.


Chakravorti​​​​​​​: That team aspect permeates across functions. Even though I’m responsible for commercial functions, it’s helped me close the gap in interpreting how we get from one end to another. I don’t come from a technical background, but having the ability to articulate the phenomenal work that our engineers are doing and understanding how to leverage that work in a way that is very intrinsic to the selling point of our platform is critical. Working in an interdisciplinary way has allowed us to be a lot more nimble in responding to the customer.

 

Designing better insurance

In order to “unbreak” the complicated insurance industry, Principal Product Designer Sara Palmer said Root’s team aims to create products that are not only intuitive — but engaging. Take the safe driving scorecard, which helps users better understand their driving behavior and celebrate high safety ratings. “Our scorecard was designed to reflect our principles of simplicity, delight and intuitiveness by presenting driving insights clearly and succinctly,” Palmer said. “We find that users appreciate the personalized touch when interacting with our products.”

 

Root insurance

 

How does that impact the engineer’s experience?

Parker: I ask every single engineer to take on a lot more ownership than I think most engineers get to or are expected to. A concrete example of that is when we were designing the SDK. Engineers are sometimes used to a designer handing them a specification or product manager telling them what to do. Instead, because we have such a collaborative process, the direction a lot of engineers get is, “Let me know how I can help you, but you own this problem.” 

That’s an exciting challenge. It means engineers have to work directly with the customer. Technical skills are absolutely critical, but so are interpersonal and soft skills. It’s just as likely for me to recognize one of my engineers for their contributions in a meeting as for their contributions to a codebase.
 

The ownership that the teams bring to the product development enables us to move quickly.”


Letcher: I’ve been really impressed with how fast we’ve been able to move. I think that's for a couple of reasons: We’re really making the most of the assets that Root has brought to bear, and we’ve organized around product and technology in an interesting way. If you look at other insurtech organizations, they’re more functionally focused. But here, the ownership that the teams bring to the product development enables us to move quickly. 

 

What feedback have you received on the product so far?

Chakravorti​​​​​​​: We’re working with several companies on both a domestic and international scale. The benefit of an enterprise platform is that we’re not constrained by any sort of border. It’s allowed us to pressure test what our solutions look like in other types of markets and see how well they’re responding.

Letcher: We recently announced our new partnership with GasBuddy, one of the largest consumer driving apps. 

They are an early adopter, but given their scale and experience, we’ve been able to receive a lot of really productive feedback on the developer experience. So far, we’ve been able to iterate rapidly to provide them with new functionalities that they need for their app.

 

READ MORE ABOUT ROOTHere’s How to Become the Consultant Your Customers Need

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