Home insurer Hippo has announced total generated premium (TGP) growth of 56% YoY to $318 million in the second-quarter of 2023, compared to $204 million a year ago.
At the same time, net earned premium for the quarter was $13.8 million, a shift from $9 million from the prior year’s quarter.
In addition, revenues for Q2’23 were $47.7 million, a 66% rise from $28.7 million from Q2’22.
At the same time, total revenue for H1’23 was $87.5 million, an increase compared to $53.2 million from H1’22.
Alongside the rise in premiums and revenue for the quarter, Hippo has reported a bigger net loss of $108 million, compared with a net loss of $74 million from the prior year quarter.
At the same time, Hippo’s Q2 adjusted EBITDA loss was $88 million compared to a loss of $56 million in the prior year quarter.
“We now expect our adjusted EBITDA loss to be in the range of $208-$218 million, versus our previous guidance of a loss of $147 million,” the insurer noted.
Hippo also reported a gross loss ratio of 107%, compared to 78% a year earlier, however gross loss ratio for H1’23 was 93%, compared to 77% from H1’22.
“Unfortunately, we experienced outsized catastrophic weather losses along with the rest of the industry that overshadowed these improvements.”
The primary contributors were five major instances of wind and hail damage in Colorado and Texas. The majority of claims will be associated with the firm’s 2022 reinsurance agreement.
“The Q2 impact of these PCS cat losses was $110 million on a gross basis and $51 million on a net basis,” said Hippo.
The insurer expects an additional $13-$15 million over the remainder of the year due to the impact on the loss participation features embedded in the reinsurance treaties.
Reinsurance recoverable on paid and unpaid losses and Loss Adjustment Expense (LAE) was $332.7 million as of June 30, 2023, compared with $286.3 million as of December 31, 2022.
“Growth in TGP and revenue is exceeding expectations and we’re holding the line on our operating expenses,” said Hippo President and CEO Rick McCathron.
“… we remain confident in our long-term vision and that we are on track to be adjusted EBITDA positive by the end of 2024.
“We reiterate our expectation of turning adjusted EBITDA positive by the end of 2024.”
