PALO
ALTO, Calif., Nov. 2, 2023
/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, 2023.
Complete financial results and full year guidance for 2023 can
be found in the company's shareholder letter in the Investor
Relations section of Hippo's website
at https://investors.hippo.com.
"The third quarter was our best as a public company yet, and we
now expect to achieve EBITDA profitability before year-end 2024,
earlier than previously projected," said Hippo President and CEO
Rick McCathron. "It is a challenging time for the industry,
but we have positioned ourselves for future growth in our
Insurance-As-A-Service and fee-based segments and expected
profitability in our risk-based segments. We are well positioned
for when the market turns, as we continue protecting the joy of
homeownership."
Third Quarter Highlights
Adjusted EBITDA, Our Best Quarter Yet
- GAAP net loss attributable to Hippo of $53 million/adjusted EBITDA loss of $38 million
- Expect to turn adjusted EBITDA positive before year-end 2024,
earlier than previously projected
Improving Core Gross Loss Ratio1
- Reported consolidated GLR for the quarter of 59% with a core
consolidated GLR of 53%
- Hippo Homeowners Insurance Program (HHIP) core GLR for the
quarter: 69%, improved from 82% a year ago
Outstanding TGP
- TGP up 38% YoY with Insurance-As-A-Service (IaaS) and Services
now representing 65% of Total TGP in Force
- IaaS TGP growth of 72% YoY
- Services TGP growth of 32% YoY
Expense Improvement
- Operating expense, excluding loss and loss adjustment expense
and an impairment and restructuring charge, declined to
$72 million from $79 million a year ago
Financial Strength
- Cash and investments at $558
million at 9/30/23
- Spinnaker policyholder surplus of $182
million
Conference Call and Webcast Information
Date:
Thursday November 02, 2023
Time: 5:00 p.m. Eastern Time /
2:00 p.m. Pacific Time
Dial-in: 404 975 4839 (U.S.) / +1 646 904 5544 (International)
Conf ID: 930760
Webcast: https://events.q4inc.com/attendee/468482918
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, other non-cash fair
market value adjustments, contingent consideration for one of our
acquisitions, and other transactions 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 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 vendor; 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; 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:
Cliff Gallant
Investors@hippo.com
Press:
Mark Olson
press@hippo.com
1 Core Gross Loss Ratio defined as current accident
year loss ratio excluding PCS-defined catastrophe losses
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SOURCE Hippo Analytics, Inc