Hippo Reports Second 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 June 30, 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 remains on pace to turn adjusted EBITDA positive by late 2024,” said Hippo President and CEO Rick McCathron. “While these are challenging times for both the industry and consumers, we believe our technological advantages provide the opportunity to surgically select attractive risks, deliver sustained growth, and continue to be a solution for many U.S. homeowners.”

Second Quarter Highlights

Improving Core Gross Loss Ratio¹

• Reported consolidated GLR of 107% with a core consolidated of 56%
• Core Hippo Homeowners Insurance Program: 63%, improved from 75% a year ago

Outstanding TGP/Revenue Growth

• TGP up 56% YoY
• Revenues up 66% YoY

Achieving Operating Leverage

• Operating expense, excluding loss and loss adjustment expense, as a percentage of revenue declined to 159% from 248% in the year ago quarter

Adjusted EBITDA

• GAAP net loss attributable to Hippo of $108 million/adjusted EBITDA loss of $88 million with $51 million of PCS weather losses
• On track to turn adjusted EBITDA positive by end of 2024

Financial Strength

• Cash and Investments at $565 million at 6/30/23
• Spinnaker policyholder surplus of $173 million

Conference Call and Webcast Information

Date: Tuesday, August 08, 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: 668032
Webcast: https://events.q4inc.com/attendee/708054365

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/

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1

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

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.