PALO
ALTO, Calif., Nov. 8, 2024
/PRNewswire/ -- Hippo (NYSE: HIPO), the home insurance group
focused on proactive home protection, today announced its
consolidated financial results for the three months that ended
September 30, 2024.
"The positive momentum we've built over the past year
continued in the third quarter as we took a significant step
forward on our path to profitability," said Hippo President and CEO
Rick McCathron. "We strengthened our
foundation for future growth by continuing to develop our Hippo New
Homes Program and delivered our best-ever year-over-year
improvement to our HHIP non-weather loss ratio--positioning us
for a successful fourth quarter and sustained growth in 2025 and
beyond."
Hippo also announced that it sold a majority stake in First
Connect Insurance Services to Centana Growth Partners, who will
invest new capital into First Connect to fund its future
growth.
"Since we acquired First Connect in 2020, it has become the
premier platform for connecting independent agents with third-party
carriers. As Hippo focuses more and more on its core business, we
felt this was the ideal time for First Connect to chart its own
path. We are excited to remain a customer, partner, and minority
shareholder as First Connect continues leveling the playing field
for independent agents."
Complete financial results and full year guidance for 2024 can
be found in the company's shareholder letter in the Investor
Relations section of Hippo's website
at https://investors.hippo.com/.
Third Quarter Highlights
Maintained Top-line Growth; Favorable Mix-Shift
-
Revenue up 65% YoY to $95 million;
premium retention more in-line with risk-retention
-
Consolidated TGP up 21% YoY, with Services and
Insurance-as-a-Service ("IaaS") representing 81% of TGP
-
Services and IaaS driving TGP growth, up 46% and 12% YoY,
respectively in Q3
Continued HHIP Loss Ratio Improvement
-
HHIP Q3 accident period loss ratio improved 22pp YoY to 70%;
non-PCS loss ratio improved 15pp YoY to 52%, PCS loss ratio
improved 7pp YoY to 18%
-
HHIP Q3 gross loss ratio improved 3pp YoY to 72%
-
HHIP net loss ratio improved 67pp YoY to 84%
Improving Operating Leverage
-
Investments in operational efficiencies continued to pay off as
fixed expenses lowered by $17 million
while revenue increased by $37
million YoY
-
Sales & Marketing, Technology & Development, and General
& Administrative expense collectively declined from 89% of
revenue to 36% YoY
Significant Step Forward on our Path to Profitability
Financial Strength
-
Cash and investments, excluding restricted cash, of $545 million
-
Spinnaker surplus of $216 million,
up from $182 million a year ago;
$8 million gain on sale of shell
insurance carrier
Conference Call and Webcast Information
Date:
Friday, November 8, 2024
Time: 8:00 a.m. Eastern Time /
5:00 a.m. Pacific Time
Dial In: +1 833 470 1428 (U.S.) / Global Dial-In Numbers
Conf ID: 081022
Webcast: https://events.q4inc.com/attendee/177479862
A replay of the webcast will be made available after the call in
the investor relations section of the company's website
at https://investors.hippo.com/
Information about Key Operating Metrics/Non-GAAP Financial
Measures
We define gross loss ratio expressed as a percentage, as the
ratio of the gross losses and loss adjustment expenses, to the
gross earned premium. We define TGP as the aggregate written
premium placed across all of our business platforms for the period
presented. We measure TGP as it reflects the volume of our business
irrespective of choices related to how we structure our reinsurance
treaties, the amount of risk we retain on our own balance sheet, or
the amount of business written in our capacity as an MGA, agency,
or as an insurance carrier/reinsurer. We define adjusted EBITDA, a
Non-GAAP financial measure, as net loss attributable to Hippo
excluding interest expense, income tax expense, depreciation,
amortization, stock-based compensation, net investment income,
restructuring charges, impairment expense, gains and losses on
sales of business, other non-cash fair market value adjustments,
contingent consideration for one of our acquisitions, and other
transactions, which may include certain legal fees and settlement
costs, that we consider to be unique in nature. We exclude these
items from Adjusted EBITDA because we do not consider them to be
directly attributable to our underlying operating performance. This
Non-GAAP financial measure is in addition to, and not a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP and should not be considered as an alternative
to net income, operating income or any other performance measures
derived in accordance with GAAP. Reconciliations of this Non-GAAP
financial measure to its most directly comparable GAAP counterpart
is included in the shareholder letter referenced above. We believe
that these non-GAAP measures of financial results provide useful
supplemental information to investors about Hippo.
Forward-looking statements safe harbor
Certain statements included in this press release that are not
historical facts are forward-looking statements for purposes of the
safe harbor provisions under the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
are accompanied by words such as "believe," "may," "will,"
"estimate," "continue," "anticipate," "intend," "expect," "should,"
"would," "plan," "predict," "potential," "seem," "seek," "future,"
"outlook," and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to,
statements regarding estimates and forecasts of financial results
and other operating and performance metrics, our business strategy,
our cost reduction efforts, the quality of our products and
services, and the potential growth of our business. These
statements are based on the current expectations of Hippo's
management and are not predictions of actual performance. Actual
events and circumstances are difficult or impossible to predict and
will differ from assumptions, and many actual events and
circumstances are beyond the control of Hippo. These
forward-looking statements are subject to a number of risks and
uncertainties, including our ability to navigate extensive
insurance industry regulations and the scrutiny of state insurance
regulators, our ability to achieve or maintain profitability in the
future; our ability to retain and expand our customer base and grow
our business, including our builder network; our ability to manage
growth effectively; risks relating to Hippo's brand and brand
reputation; denial of claims or our failure to accurately and
timely pay claims; the effects of intense competition in the
segments of the insurance industry in which we operate; the
availability and adequacy of reinsurance, including at current
coverage, limits or pricing; our ability to underwrite risks
accurately and charge competitive yet profitable rates to our
customers, and the sufficiency of the analytical models we use to
assess and predict exposure to catastrophe losses; risks related to
our proprietary technology and our digital platform; outages or
interruptions or delays in services provided by our third party
providers, including our data vendors; risks related to our
intellectual property; the seasonal and cyclical nature of our
business; the effects of severe weather events and other natural or
man-made catastrophes, including the effects of climate change,
global pandemics, and terrorism; continued disruptions from the
COVID-19 pandemic; any overall decline in economic activity;
regulators' identification of errors in the policy forms we use,
the rates we charge, and our customer communications including, but
not limited to, cancellations, non-renewals and reinstatements
through market conducts, complaints, or other inquiries; the
effects of existing or new legal or regulatory requirements on our
business, including with respect to maintenance of risk-based
capital and financial strength ratings, data privacy and
cybersecurity, and the insurance industry generally; and other
risks set forth in the sections entitled "Risk Factors" in our
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. If
any of these risks materialize or our assumptions prove incorrect,
actual results could differ materially from the results implied by
these forward-looking statements. There may be additional risks
that Hippo does not presently know, or that Hippo currently
believes are immaterial, that could also cause actual results to
differ from those contained in the forward-looking statements. In
addition, forward-looking statements reflect Hippo's expectations,
plans, or forecasts of future events and views as of the date of
this press release. Hippo anticipates that subsequent events and
developments will cause Hippo's assessments to change. However,
while Hippo may elect to update these forward-looking statements at
some point in the future, Hippo specifically disclaims any
obligation to do so. These forward-looking statements should not be
relied upon as representing Hippo's assessments of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
About Hippo
Hippo is protecting the joy of
homeownership, helping to safeguard customers' most important
financial asset by harnessing the power of real-time data, smart
home technology, and a growing suite of home services to deliver
proactive home protection.
Hippo Holdings Inc. operating subsidiaries include Hippo
Insurance Services, Hippo Home Care, First Connect Insurance
Services, Spinnaker Insurance Company, Spinnaker Specialty
Insurance Company, and Mainsail Insurance Company. Hippo Insurance
Services is a licensed property casualty insurance agent with
products underwritten by various affiliated and unaffiliated
insurance companies. For more information, including licensing
details, visit http://www.hippo.com.
Contacts
Investors:
Sammy Ng
Investors@hippo.com
Press:
Mark Olson
press@hippo.com
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SOURCE Hippo Analytics, Inc
