MILE - Metromile: Real Disruptor In Auto Insurance But At 16x Premiums

• Metromile is a newly-listed Insurtech company targeting the $266bn U.S. auto insurance market; shares are down 30% since listing in February.
• Similar to Root, Metromile's core proposition is based on a belief that most drivers are overpaying for their insurance.
• Unlike Root, Metromile provides a partly variable premium based on miles driven, and collects telematics data from a dedicated device.
• Metromile is about one third the size of Root, but has better margins and retention, as well as more growth in its number of policies recently.
• At $12.32, Metromile shares are trading at more than 16x Direct Earned Premiums, outside our valuation parameters. Avoid.

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