Hippo Completes Successful 2024 Reinsurance Renewals

PALO ALTO, Calif., Jan. 25, 2024 /PRNewswire/ -- Hippo (NYSE: HIPO), the home insurance group focused on proactive home protection, today announced the successful placement of its 2024 reinsurance program.

"Our reinsurance partners have affirmed their confidence in our business with improved terms for the second year in a row," said Rick McCathron, CEO and President. "Our efforts to reduce exposure to weather-related volatility in our business, combined with our proactive approach to home protection, has continued to drive significant improvements in loss ratio, making the Hippo Home Insurance Program attractive to reinsurers, many of whom have been with us for multiple years."

"The successful placement of our 2024 reinsurance program, and our decision to retain more of the non-PCS exposure and corresponding premium, on our own balance sheet reflects our growing confidence in the profitability and predictability of our underwriting results," said CFO Stewart Ellis.

Highlights:

Proportional Reinsurance Treaties (Hippo) - The decision to purchase substantially less proportional reinsurance in 2024 and retain more Hippo Home Insurance Program premium and the associated non-catastrophe attritional losses on our balance sheet reflects our expectation of continued improvement in the attritional loss ratio and essential steps taken by Hippo to lower volatility.
By reducing the Hippo Home Insurance Program's reliance on proportional reinsurance, we expect a smaller impact from loss participation features compared to prior treaties.
Non-Proportional Reinsurance (Hippo) - We increased our purchases of non-proportional Excess-of-Loss (XOL) reinsurance, raising our per occurrence XOL limit by 11% and increasing the number of participating reinsurers from 14 to 19. Under this placement, along with our existing catastrophe protections, we are protected on the upper layers of risk up to a 1-in-250-year event.
Additional details of the reinsurance placement for the Hippo program will be disclosed during our 4Q23 earnings report on 3/6/2024 and in our 2023 Annual Report on Form 10K filed with the SEC.

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. Reconciliations of this Non-GAAP financial measure to its most directly comparable GAAP counterpart is included in the earnings report 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.

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Press:Mark Olson[email protected]

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