Home insurer Hippo Holdings Inc. has announced total generated premium (TGP) growth of 94%, year-on-year, to $162 million in the third quarter of 2021, pushing the firm’s revenue up 64% to $21.3 million.
Alongside the rise in TGP and revenue for the quarter, Hippo has reported a smaller net loss of $30.9 million compared with a net loss of $38.6 million for the prior year quarter.
Q3 2021 total revenue included a rise in net earned premium to $10.9 million, higher commission income of $6.6 million, growth in service and fee income to $3.7 million, and a slight dip in net investment income to $0.1 million.
Total expenses for the quarter declined slightly, year-on-year, to $51.1 million, and this is despite gross losses and loss adjustment expenses (LAE) rising to $130 million, and net losses and LAE rising to $26.3 million.
For the third quarter of this year, Hippo’s gross loss ratio improved to 128% with significant gross earned premium expansion to $101.2 million. At the same time, the net loss ratio deteriorated to 241% with net earned premiums of $10.9 million.
In discussing its improving gross loss ratio, Hippo notes that its concentration in Texas, which had a negative impact on the firm in H1 2021, benefitted the firm in Q3.
In Q3, catastrophic weather losses, including hurricane Ida, contributed 50 percentage points to the gross loss ratio, against 75% a year earlier. The firm’s underlying attritional loss ratio totalled 63%, which represents a five percentage point improvement from a year ago.
Following the strong performance in Q3, Hippo has increased its full-year 2021 guidance for TGP from a range of $560 million to $570 million to $600 million to $605 million.
Assaf Wand, Founder and Chief Executive Officer (CEO) of Hippo, commented: “The third quarter was incredibly strong for Hippo. Our results demonstrate exciting progress in the areas of our business that matter most. We delivered robust growth, improved our loss ratio, and made a number of investments which will strengthen our foundation for the future.”
“We are excited by the rapid operational progress we are making under these new leaders. It will take time for the changes we are making to work their way into our reported results, but early signs are positive and we are more confident than ever that we will deliver.
“In an unpredictable environment impacted by pandemics, climate change, and inflation, we believe that our tech-driven operating agility allows us to act more quickly and decisively than our competitors, and puts us in a solid position to win long-term,” he added.