Hippo (NYSE:HIPO) Conference Transcript

Summary of Hippo Conference Call - September 17, 2025 Company Overview - Company Name: Hippo (NYSE:HIPO) - Industry: Insurance, specifically a tech-enabled program carrier focusing on personal and commercial lines, with a legacy in homeowners insurance [3][4] Key Financial Metrics - Gross Written Premium: Approximately $950 million in the last 12 months, projected to reach $1.1 billion by the end of 2025 [4][5] - Revenue: $425 million in the last 12 months, expected to be between $460 million and $465 million by the end of 2025 [4][5] - Net Income: Achieved net income positive for the first time from net operating activities [4] - Book Value: $333 million as of the end of the quarter, projected to increase to about $420 million by the end of 2025 [5] Growth Projections - Future Growth: Expected to nearly double gross written premium from $1.1 billion to over $2 billion by 2028 [7] - Adjusted Net Income: Projected to quadruple from about $30 million in 2025 to more than $125 million in 2028 [7] - Return on Equity: Anticipated to be in the high-teens by 2028 [7] Strategic Initiatives - Organic Growth: Plans to grow existing programs by 10% to 15% annually, leveraging a history with managing general agents (MGAs) [9] - New Programs: Aiming to add $100 million to $150 million in gross written premium from new programs each year [10] - Partnership with The Baldwin Group: This strategic transaction will triple access to new homes closed annually, enhancing growth and underwriting profitability [11][24][25] Underwriting Approach - Diligent Underwriting: Reviewed over 140 program opportunities in 2024, approving only 4, which resulted in $130 million of new business [10] - Legacy Homeowners Business: Focused on newly constructed homes through builders, with a loss ratio significantly lower than the industry average [18][30] - Rate Increases: Implemented over 170 rate filings resulting in a cumulative rate increase of more than 80% [19] Risk Management - Geographic Diversification: Reduced concentration in high-risk areas like Harris County, Texas, and focused on states with lower catastrophic exposure [31][32] - Portfolio Diversification: Increased mix of commercial property and casualty lines to enhance predictability and reduce volatility [32] Market Resilience - Interest Rate Sensitivity: Business has shown resilience to interest rate changes, with partnerships with builders providing better mortgage terms [22][23] - Performance in Challenging Markets: Despite challenges in homeowners insurance, diversification into casualty and commercial lines has provided stability [32] Conclusion - Execution Track Record: The company has a strong history of meeting or exceeding ambitious goals set in previous investor communications [20] - Future Outlook: Focus on responsible growth, improved underwriting performance, and a diversified portfolio to achieve higher profitability with lower volatility [21][14]