Auto insurer Root fires CFO

Dive Brief:

Columbus, Ohio-based Root tapped Megan Binkley, 39, to become its interim CFO and treasurer after the auto insurer terminated its CFO and Treasurer Rob Bateman “for cause” including for violating company policies, effective Wednesday, according to a Securities and Exchange Commission filing.
The firing came less than a week after the company received information on Feb. 24 that was subsequently confirmed concerning misconduct related to Bateman’s personal behavior, according to a Root spokesperson. The misconduct, for which the company has a zero tolerance policy, was not related to the company’s finances or financial reporting, the spokesperson wrote in an email.
Binkley spent 12 years at KPMG including as senior audit manager before joining Root in April 2019. She has most recently served as the company’s deputy financial officer. Going forward she will also be the company’s principal financial officer and continue to act as the company’s principal accounting officer.

Dive Insight:

Root Inc. was founded in 2015 and is the parent of Root Insurance, which provides online property casualty insurance through an app. In 2021 the online used-car retailer Carvana announced it planned to invest $126 million in Root to develop integrated auto insurance for Carvana’s online car-buying platform.

But Root’s business has struggled. The company has a history of net losses, reporting net losses of $297.7 million in 2022 and $521.1 million the year earlier, principally driven by loss ratios associated with its customers’ accidents, according to Root’s 10-K filing.There are also challenges for the broader used-car market that has seen a reversal in pandemic tailwinds with prices expected to decline this year, according to a Feb. 24 Wall Street Journal report.

Bateman’s departure comes just under a year after he became CFO in April, according to a March 23 SEC filing. A veteran finance executive in the insurance sector, he joined Root after serving as president and CFO of Ategrity Specialty Insurance Company. His compensation package included an annual base salary of $500,000, according to a filing. Bateman will not be entitled to any severance payment in connection with his termination, according to this week’s filing. He will only receive salary and benefits earned through March 1.

Bateman could not be reached for comment.