Leading home insurer, Hippo, has reported robust performance in the third quarter of 2023, with a noteworthy 38% Year-over-Year (YoY) growth in Total Generated Premium (TGP), reaching US$303.7 million compared to $219.9 million in the corresponding period last year.
The Q3 financial highlights include a significant shift in Net Earned Premium, totaling $32.9 million, marking a notable increase from $10.7 million in the same quarter of the previous year. The company also witnessed a substantial surge in revenues, reporting $57.7 million for Q3 2023, reflecting an impressive 88% rise from $30.7 million in Q3 2022.
Despite the growth in premiums and revenue, Hippo reported a reduced net loss of $53.1 million for Q3 2023, showcasing a marked improvement from the net loss of $129.2 million reported in the prior year’s quarter. Additionally, the Q3 adjusted EBITDA loss stood at $38.4 million, a decrease from the $54.8 million loss in the same period last year.
Hippo’s performance metrics also indicate positive trends in loss ratios, with a gross loss ratio of 59% compared to 110% a year earlier. However, the net loss ratio, while showing improvement, was recorded at 111%, down from 223% in the corresponding period of the previous year.”
The insurer released a statement saying: “Q3’23 was Hippo’s best quarter yet. For the full year 2023, we now expect an adjusted EBITDA loss of $207-$212 million, compared to our previous range of $208-$218 million. 2023 revenue of $190-$195 million compared to our previous estimate of $178 million. Our 2023 TGP estimate remains $1.1 billion.”
As of September 30, 2023, the reinsurance recoverable on both paid and unpaid losses, along with Loss Adjustment Expense (LAE), amounted to $297.3 million, reflecting an increase from the $286.3 million recorded as of December 31, 2022.
“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.
He added: “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.”
Author: Joanna England
