Hippo ends Q3 with $53.8 million loss

Hippo shared its Q3 2023 results. Here are some highlights:

  • Total generated premium across all of Hippo’s business platforms reached $304 million, a 38% YoY increase.
  • TGP for Hippo’s segments – services, insurance-as-a-service, Hippo home insurance program, was $121.6, $141.8, and $95 million, respectively. These figures exclude intersegment eliminations of $54.7 million.
  • Between Q2 and Q3 of this year, TGP for Hippo’s home insurance program declined by 7%.
  • Net loss ratio, the ratio of the net losses and LAE to the net earned premium, was 111%, a 112 percentage points decline compared to Q3 2022.
  • Sales and marketing expense for the quarter was $18.9 million, down $10.5 million from the same period last year.
  • Net loss for the period stood at $53.8 million, a significant decline compared to a net loss of $132.1 in Q3 2022. For the nine months ended September 30, Hippo recorded a loss of $230.9 million, compared to a $277.4 million loss for the same period last year.
  • As of September 30, 2023, Hippo had $269.4 million of cash and restricted cash and $330 million of available-for-sale fixed income securities and short-term investments.

In terms of GWP, below is a breakdown by geography, which includes the Spinnaker book.

During the earnings call, president and CEO Richard McCathron announced “a significant expense reduction” that is expected to take between $50 million and $70 million out of the company’s cost structure in 2024. Hippo expects these savings, coupled with further loss ratio improvement and growth in the insurance-as-a-service and services segments, to result in positive adjusted EBITDA before year-end 2024, turning positive earlier than previously projected.

It appears that Hippo hasn’t resumed writing new business, despite McCathron’s comments that the company will start accepting new business again in mid September. In August, we reported that Hippo paused all new business countrywide. In a statement, Hippo said that this decision does not impact the company’s insurance-as-a-service or services segments. During yesterday’s earnings call, McCathron answered an analyst question about the pause, saying that the company had “already begun reopening the builder channel” in most states. However, the builder channel is part of the company’s services segment, which was not impacted by the pause according to the statement Hippo shared with us.

Based on our sources, Hippo has not turned on new business for its home insurance program. We reached out to Hippo multiple times about this matter but couldn’t get a response.

During the call, McCathron also shared that the insurance-as-a-service and services segments now make up 65% of in-force premiums, up from 52% a year ago.


A Hippo spokesperson provided the following comments:

“The Hippo Builder Insurance Agency (HBIA) is part of our Services segment, however it sells a mix of Hippo Home Insurance Program (HHIP) and third-party carrier policies. As Rick shared on the earnings call, we have restarted underwriting new HHIP policies through our builder channel and are open in nearly all markets we operated in prior to the pause.

We have not shared our plans to restart underwriting other HHIP policies, but have stated when we do we’ll prioritize high population markets where we can avoid concentration, lower volatility markets with fewer wind and hail events, and continue targeting Generation Better – homeowners interested in leveraging technology to proactively protect their homes.”