On November 2, 2023, Hippo Holdings Inc (HIPO, Financial) released its Q3 2023 earnings report. The company reported a GAAP net loss of $53 million and an adjusted EBITDA loss of $38 million. Despite the losses, the company's revenue saw a significant increase of 88% YoY, with Total Generated Premium (TGP) up by 38% YoY. The company's core gross loss ratio also showed improvement, dropping to 69% from 82% a year ago.
Financial Performance and Highlights
Hippo Holdings Inc (HIPO, Financial) reported a consolidated gross loss ratio of 59% and a core consolidated gross loss ratio of 53%. The company's Hippo Homeowners Insurance Program (HHIP) core gross loss ratio improved to 69% from 82% a year ago. The company's TGP grew by 38% YoY, with Insurance-as-a-Service (IaaS) TGP growth of 72% YoY and Services TGP growth of 32% YoY. The company's operating expense, excluding loss and loss adjustment expense and an impairment and restructuring charge, declined to $72 million from $79 million a year ago.
Q3’23 was Hippo’s best quarter yet. The most predictable and profitable parts of Hippo, Services and Insurance-as-a-Service (IaaS) segments continued to drive our growth and now represent 65% of our premium-in-force, up from 52% a year ago. The actions we are taking in our homeowners insurance business to lower its volatility and improve its profitability are working. Our Q3’23 adjusted EBITDA loss was Hippo’s smallest as a public company and we are on pace to turn positive earlier than previously projected." - Rick Richard McCathron, President & CEO
Analysis of Financial Tables
The company's financial tables reveal a steady growth in its most profitable segments, with the IaaS segment showing a positive adjusted operating income of $4 million and exceptional TGP growth of 72%. The Services segment also showed promising results with a Q3 adjusted operating loss of $10 million, down from $16 million a year ago. The company's TGP was up 32% to $122 million and revenue up 22% to $12 million.
Looking Ahead
Despite the challenges faced in the first half of 2023, Hippo Holdings Inc (HIPO, Financial) has taken bold steps to position itself for future growth and profitability. The company expects to turn adjusted EBITDA positive before year-end 2024, earlier than previously projected. The company also expects to see a decline in Hippo Homeowners Insurance Program's (HHIP) Total Generated Premium (TGP) in 2024, driven by a disproportionate decline in exposure and volatility and a significant improvement in underwriting profitability.
Explore the complete 8-K earnings release (here) from Hippo Holdings Inc for further details.
