PALO
ALTO, Calif., Aug. 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
June 30, 2024.
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/.
"Our plan to reduce the volatility in our homeowners program
passed its first meaningful test, as we delivered a substantial
year-over-year reduction in catastrophic losses despite another
quarter of elevated severe weather," said Hippo President and CEO
Rick McCathron. "We used proprietary technology to drive
efficiencies into our operations, which resulted in higher customer
lifetime value and lower customer acquisition costs, and we
improved access to insurance for customers buying new homes. We are
well-positioned for continued growth and on track to achieve our
long-stated goal of positive Adjusted EBITDA in Q4."
Second Quarter Highlights
Continued Top-line; Favorable
Mix-Shift
- Revenue up 88% YoY to $90
million; premium retention more in-line with
risk-retention
- Consolidated Total Generated Premium ("TGP") up 20% YoY, with
Services and Insurance-as-a-Service ("IaaS") representing 83% of
TGP
- Services and IaaS driving TGP growth, up 38% and 23% YoY,
respectively in Q2
Substantial HHIP Loss Ratio
Improvement
- HHIP Q2 gross loss ratio improved 94pp YoY to 84%
- Q2 gross PCS loss ratio improved 96pp YoY; higher deductibles
and reduced exposure to severe weather
- Q2 gross non-PCS loss ratio increased 2pp YoY, but excluding
reserve development, improved 3pp YoY
- HHIP Net Loss Ratio improved 475pp YoY to 113%
Generating Substantial Operating
Leverage
- Sales & Marketing, Technology & Development, and
General & Administrative expense collectively declined from
120% of revenue a year ago to 46% in Q2; this represented a
reduction of $16 million YoY, or
28%
- Tech driven efficiencies: Agent productivity (+60% YoY),
Conversion rate (+17% YoY), Cross-sell (+23% YoY)
Net Loss and Adjusted EBITDA continuing to
improve
- Q2 Net loss attributable to Hippo down 62% YoY to $41 million
- Q2 Adjusted EBITDA loss down 72% YoY to $25 million
Financial
Strength
- Cash and investments, excluding restricted cash, of
$491 million
- Spinnaker surplus of $202
million, up from $173 million
a year ago
Conference Call and Webcast Information
Date:
Thursday, August 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: 090869
Webcast: https://events.q4inc.com/attendee/425537578
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, 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