Hippo ends 2023 with $273 million loss

Hippo has ended 2023 with a $273 million net loss, down 18% compared to 2022.

The company’s Services segment, which includes the consumer insurance agency and First Connect, reached $459.7 million in premiums in 2023, a 28% increase compared to 2022. Revenue was $44.3 million, a 20% increase from 2022, and adjusted operating loss stood at $37.6 million, a decrease of 23% compared to 2022.

The company’s Insurance-as-a-Service segment, which is comprised of the Spinnaker fronting business, had total generated premium of $513.9 million, an increase of 84% from 2022. Revenue was $70.7 million, an increase of 91% over the prior year period. Adjusted operating income was $18.3 million, an increase of 239% compared to 2022.

The company’s home insurance program had total premiums of $360.5 million, a decrease of 2% compared to 2022. Revenue was $102.1 million, an increase of 60% from 2022. The increase in revenue was due primarily to higher earned premiums, partially offset by a decrease in commission income, net, reflecting changes in Hippo’s 2023 reinsurance treaties, resulting in higher premium retention, and achieving planned premium rate increases. Adjusted operating loss was $180.3 million, an increase of 11% compared to 2022.

Overall, the three Hippo segments generated $1.13 billion in premiums in 2023 (including intersegment eliminations).

Net loss ratio (losses and LAE to the net earned premium) was 169% for the year, compared to 239% in 2022.

Sales and marketing expense for the year was $80.1 million, a 21% decrease compared to 2022.

Hippo claims that over 100,000 users have installed its app.

As of December 31, 2023, Hippo had $195.1 million of cash and restricted cash and $348.8 million of available-for-sale fixed income securities and short-term investments.