Hippo raises 2021 premium guidance to $600mn as underlying results improve in Q3
Californian InsurTech Hippo raised its full-year 2021 guidance for total generated premiums to $600mn-$605mn from the Q2 estimated range of $550mn-$570mn, as the company’s underlying results improved during the third quarter of the year.
Hippo launched a new partnership with Freddie Mac, and the firm’s executives expect it will enable the company to boost its homeowners’ coverage across the US.
In the third quarter, the homeowners’ InsurTech grew gross premiums written by 94% to $162mn, as it continues to geographically diversify. The company also said 63% of new homeowners' premium came from states outside of California and Texas, led by Colorado and New Jersey, and up 55% from last quarter.
“As our business grows nationally, we are continuing to develop a much more balanced portfolio of geographic exposure which can help reduce the volatility or loss ratio overtime,” said Hippo’s CFO Stewart Ellis during the Q3 earnings call with analysts.
During the third quarter, Hippo’s loss ratio fell to 128% from 155%, helped by cutting the contribution of cats to the loss ratio from 75% to 50%.
Ellis explained that while Hippo’s homeowners’ concentration in the north of Texas affected the firm’s results during the first half of the year due to bad weather, but it also benefited the InsurTech during Q3 as the industry was hit by Hurricane Ida, which devastated Louisiana and affected the Northeast of the US.
“We remain confident in our ability to execute our growth strategy and believe we will exceed the forecast,” Ellis told analysts.
“Texas is a very, very large state,” he said, adding that “so even though we're continuing to write business in Texas, that new business that we're bringing into the portfolio is diversifying our cat exposure.”