Roadzen Inc. (NASDAQ: RDZN) began Thursday’s session sharply higher. The New York-based company, claiming to be a global leader in AI at the convergence of insurance and mobility, today announced that its U.S. operations have signed a Letter of Intent (LOI) with a leading U.S. commercial insurance carrier for a dedicated commercial auto insurance program.
This morning’s news release claims the LOI contemplates $30 million in annual underwriting capacity in Year 1, scaling to $50 million over three years, supporting Roadzen's expansion in the U.S. commercial auto insurance market.
The proposed program is incremental to Roadzen's existing $25 million in U.S. underwriting capacity, which the Company continues to grow.
The LOI is non-binding and remains subject to negotiation and execution of definitive agreements, including a binding authority agreement with the carrier, expected by June.
“Under the contemplated arrangement,” the release continues, “Roadzen's MGA would operate under delegated authority from the carrier to quote, underwrite, and bind commercial auto policies on the carrier's behalf.
“At full Year 1 utilization, which Roadzen expects to achieve given existing producer demand, the program is anticipated to contribute approximately $6 million in revenue, with revenue scaling alongside the capacity ramp to $50 million over three years.”
Roadzen earns and recognizes MGA commissions and fees as revenues on premiums written through such programs, converting underwriting capacity directly into recurring revenue. The contemplated capacity is backed by Roadzen's established U.S. producer and agent network.
RDZN shares zoomed 28 cents, or 16.3%, to two dollars.
