Hippo Reports First Quarter 2023 Financial Results

Hippo (NYSE: HIPO), the home insurance group focused on proactive home protection, today announced its consolidated financial results for the three months that ended March 31, 2023.

Complete financial results and full year guidance for 2023 can be found in the company's shareholder letter in the Investor Relations section of Hippo’s website at https://investors.hippo.com.

“Hippo got off to a fast start in Q1, hitting key operational efficiency goals related to rate filings, gross loss ratio improvement, and kept operating expenses essentially flat despite growing total generated premium by 59% year-over-year,” said Hippo President and CEO Rick McCathron. “We remain laser-focused on customer experience with the new Hippo Home Care app now available to any U.S. homeowner, are on target to deliver over $1 billion in total generated premium in 2023 and reaffirm our expectation to achieve adjusted EBITDA profitability in late 2024.”

First Quarter Highlights

Outstanding TGP/Revenue Growth

• TGP up 59% YoY
• Revenues up 62% YoY
• Raising Full Year Guidance for both TGP and Revenue

Improving Core Gross Loss Ratio¹

• Core Consolidated: 51%
• Core Hippo Homeowners Insurance Program: 60%, improved from 78% a year ago

Achieving Operating Leverage

• Operating Expense, excluding Loss and LAE, roughly flat and declining as a percentage of revenue

Adjusted EBITDA Outlook on Track

• GAAP Net Loss Attributable to Hippo of $69.8 million/Adjusted EBITDA loss of $52.1 million with $7.5 million of excess bad weather losses
• On track to achieve previous annual guidance of an adjusted EBITDA loss of $147 million for FY2023

Financial Strength

• Cash and Investments at $620 million at 3/31/23
• Spinnaker policyholder surplus of $169 million
• Launched up to $50 million share buyback

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1 Core defined as current accident year loss ratio excluding PCS-defined catastrophe losses

Conference Call and Webcast Information

Date: Tuesday, May 09, 2023
Time: 08:00 a.m. Eastern Time/ 05:00 a.m. Pacific Time
Dial-in: 404 975 4839 (U.S.) / [phone] (International)
Conf ID: 714006
Webcast: https://events.q4inc.com/attendee/626231592

A replay of the webcast will be made available after the call in the investor relations section of the company’s website at https://investors.hippo.com/.

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. We define TGP as the aggregate written premium placed across all of our business platforms for the period presented. We measure TGP as it reflects the volume of our business irrespective of choices related to how we structure our reinsurance treaties, the amount of risk we retain on our own balance sheet, or the amount of business written in our capacity as an MGA, agency, or as an insurance carrier/reinsurer. We define adjusted EBITDA, a Non-GAAP financial measure, as net loss attributable to Hippo excluding interest expense, income tax expense, depreciation, amortization, stock-based compensation, net investment income, restructuring charges, impairment expense, other non-cash fair market value adjustments, contingent consideration for one of our acquisitions, and other transactions that we consider to be unique in nature. We exclude these items from Adjusted EBITDA because we do not consider them to be directly attributable to our underlying operating performance. This Non-GAAP financial measure is in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP. Reconciliations of this Non-GAAP financial measure to its most directly comparable GAAP counterpart is included in the shareholder letter referenced above. We believe that these non-GAAP measures of financial results provide useful supplemental information to investors about Hippo.