Hippo (US:HIPO)2021-11-11 01:50Financial Data and Key Metrics Changes - Total Generated Premium (TGP) grew 94% year-over-year to $162 million in Q3 2021, with pro forma growth of 51% year-over-year after the acquisition of Spinnaker [10][14] - Revenue increased 64% year-over-year to $21 million, driven by the growth in TGP [15] - The loss ratio improved to 128% from 155% a year ago, with catastrophic weather losses contributing 50 percentage points to the loss ratio in Q3 [10][16] Business Line Data and Key Metrics Changes - New Total Generated Premium was up 66% year-over-year to $75 million, accelerating from 53% growth last quarter [14] - Premium retention increased to 89%, contributing to top-line growth and improved loss ratio over time [15][32] Market Data and Key Metrics Changes - 63% of new Hippo homeowners' premium in the quarter came from states outside of Texas and California, up from 55% last quarter, indicating geographic diversification [14][31] - The company is seeing strong demand across various distribution channels, particularly in builder and partner channels, which represented over 20% of new premium for the first time [31] Company Strategy and Development Direction - The company is raising its full-year guidance for TGP from $560 million to a range of $600 million to $605 million, reflecting strong performance and expectations of continued momentum [10][20] - A multi-carrier strategy is being implemented to enhance underwriting flexibility and improve loss ratios [22][44] - The company is focusing on geographic diversification to reduce volatility in loss ratios over time [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to execute its growth strategy despite challenges from the pandemic, climate change, and inflation [12][20] - The company believes its tech-driven operating agility positions it better than competitors in an unpredictable environment [12] Other Important Information - The company ended the quarter with cash and cash equivalents of $850 million, indicating a strong capital position [20] - Management highlighted the importance of continuous improvement and quick execution in their operating model [25] Q&A Session Summary Question: Drivers of new business growth - Management noted strong performance across distribution channels, particularly in builder and partner channels, and increased premium retention as key drivers of new business growth [30][31][32] Question: Impact of elevated marketing costs - Management reported improved marketing efficiency, generating more TGP for each dollar spent on sales and marketing, and attributed this to their unique market approach [35][36] Question: Operational changes and partnerships - Management discussed the integration of new data sources and the multi-carrier strategy as part of operational changes aimed at improving loss ratios [42][44] Question: Catastrophe losses and future expectations - Management indicated that catastrophe losses are state-specific and emphasized the importance of pricing each customer based on state conditions to achieve underwriting profit [49][52]