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  Title	HIPPO HOLDINGS INC. Hippo : Fourth Quarter 2024 Shareholder Letter
  ID	7525192
  External ID	7605150655
  Author	Unknown
  Published Date	March 6, 2025, 6:50 a.m.
  Summary	March 06, 2025 at 07:48 am EST Q4 2024 LETTER TO SHAREHOLDERS KEY HIGHLIGHTS FROM Q4 Strong Top-line Growth; Favorable Mix-Shift Q4 Revenue up 58% YoY to $102 million; FY2024 Revenue up 77% to $3
  Tags	None
  URL	https://www.marketscreener.com/quote/stock/hippo-holdings-inc-117515033/news/hippo-fourth-quarter-2024-shareholder-letter-49258390/
  Sentiment	Negative: 0.04345    Neutral: 0.01724    Positive: 0.93931
  Relevance	0.02732

• Content Details

  Content ID	4830438
  Key	600d0f81-8247-4a6f-88d5-1810520df549
  Content	March 06, 2025 at 07:48 am EST Q4 2024 LETTER TO SHAREHOLDERS KEY HIGHLIGHTS FROM Q4 Strong Top-line Growth; Favorable Mix-Shift Q4 Revenue up 58% YoY to $102 million; FY2024 Revenue up 77% to $372 million Pro-forma for the First Connect transaction, Consolidated TGP up 16% YoY, driven by Insurance-as- a-Service ("IaaS") which grew 22% Continued Improvement of HHIP Loss Ratio HHIP Q4 Gross Loss Ratio improved 3pp YoY to 50%, with HHIP non-PCS loss ratio at 43%, and HHIP PCS loss ratio at 7% HHIP FY2024 Gross Loss Ratio improved 28pp to 73% HHIP Net Loss Ratio improved 46pp YoY to 60% Improving Operating Leverage Investments in operational efficiencies continued to pay off as fixed expenses lowered by $8 million while revenue increased by $38 million YoY Sales & Marketing, Technology & Development, and General & Administrative expenses collectively declined by 34pp of revenue YoY, from 69% of revenue in Q4'23 to 35% in Q4'24 Significant Step Forward on our Path to Profitability Q4 Net Income attributable to Hippo of positive $44 million, vs. Net Loss of $42 million in Q4 of last year; Gain on Sale of First Connect contributed $46m Q4 adjusted EBITDA of positive $8.5 million vs. adjusted EBITDA loss of $22 million in Q4 of last year Financial Strength Cash and investments, excluding restricted cash, increased $25 million QoQ to $571 million Spinnaker surplus of $204 million, up from $191 million a year ago Letter to Shareholders | Q4 2024 Revenue YoY HHIP Gross Loss Ratio -3pp YoY HHIP Net Loss Ratio -46pp YoY Net Income (Loss) Up $86M YoY Adjusted EBITDA (Loss) Up $31M YoY 1. Net Income (Loss) Attributable to Hippo $102M $64M $36M Q4'22 Q4'23 Q4'24 Q4'22 Q4'23 Q4'24 Q4'22 Q4'23 Q4'24 $44M -$42M -$63M Q4'22 Q4'23 Q4'24 $9M -$22M -$47M Q4'22 Q4'23 Q4'24 Q4'24: POSITIVE MOMENTUM Dear Shareholders, 2024 was the most successful year in the history of Hippo. Over the course of the year, we improved our HHIP gross loss ratio by nearly 30 percentage points, streamlined our operations to reduce fixed costs, and in Q4, achieved our long-stated goal of generating positive adjusted EBITDA, both on time and to a greater extent than expected. We did all of this while nearly doubling our annual revenue and laying the foundation across each of our business units to deliver margin-enhancing growth for years to come. In our core, Hippo Homeowners Insurance Program, we completed the broad transformation of our policy portfolio that was designed to reduce CAT-related volatility and bring our loss ratio down to target levels. We accomplished this through rate increases, structural changes to our coverages, and reductions in exposure to wind and hail by approximately 80% vs. mid-2023 levels. We achieved a gross loss ratio of 73% for calendar year 2024 and a Non-PCS CAT loss ratio of under 45% in the fourth quarter, approaching our long-term target level, with further improvements expected in 2025. In our Insurance-as-a-Service business, we have demonstrated an ability to achieve consistent long-term growth and profitability over the years while maintaining our quality bar for program vetting and underwriting. In 2024, we grew our annual Revenue by more than 40% while maintaining discipline in both program selection and risk participation, which resulted in an annual net loss ratio of 39%. There is no shortage of potential programs for Spinnaker to work with - we reviewed more than 100 opportunities in 2024 - but we do not think we need to compromise on quality to achieve compelling financial results. During the year, we focused on building a solid foundation for future growth for our Hippo Homeowners Insurance Program, with a particular focus on the New Homes Channel. We added new builder and carrier partners, enhanced our already differentiated risk allocation technology, and made additional investments in operational excellence. As we move into 2025, we are working to further expand our network of partners and to deepen relationships with our current partners, all while working with this group to re-define what is possible in helping buyers of newly built homes secure insurance quickly and easily as part of the home buying process. As we turn our attention to our outlook for 2025, we should first pause to acknowledge the pain the community of Los Angeles has felt in January because of the wildfires, and our role as an insurance company to help alleviate that pain. A handful of our Hippo Homeowners customers and their families completely lost their homes to the fires, and we responded immediately with assistance arranging temporary housing, accelerated payouts of policy limits, and have been working with our builder partners to explore ways to help reduce the time to rebuild. Other customers have suffered partial losses and/or damage from smoke and ash, and we are supporting them with both financial and operational assistance with remediation. Even when factoring in the short-term impact of these fires, we feel very well-positioned in 2025 to deliver substantial improvements to operating income vs. our 2024 results. And we remain on track to deliver positive net income by the end of 2025. I'm proud of the progress we've made as a business over the past 12 months and of the team members who have made it possible. And I'm even more excited about what's next on the Hippo journey. We're looking forward to sharing more of our plans at a special day for Investors on June 12th in New York City. More details on that to come. Sincerely, Richard McCathron President & CEO Q4'24 RESULTS Q4'24 Highlights Total Generated Premium excludes First Connect for all periods Net Income (Loss) Attributable to Hippo Q4'24 FINANCIALS: KPIS, SEGMENT INFORMATION, AND NON-GAAP FINANCIALS Two and a half years ago, in September 2022, Hippo hosted its first investor day. During that event, we committed to delivering positive adjusted EBITDA by the end of 2024 and to growing our revenue by 3.5 times from $120 million in 2022 to between $420 and $450 million in 2025. In the fourth quarter of 2024, we delivered on that guidance by posting positive adjusted EBITDA of $8.5 million and revenue that represents an annual run-rate of approximately $410 million, which means we are on track to exceed our investor day revenue target in 2025. Over the past two and a half years, we've responded quickly to changes in both the insurance and financial markets, transformed the fundamental risk dynamics of our business, and laid a strong foundation for future, margin-enhancing growth. We've seen the benefits of these changes over the past few quarters, and they remain present as factors that helped us exceed our adjusted EBITDA guidance in Q4. Total Generated Premium ("TGP") In Q4'24, TGP grew by 10% YoY to $295 million, driven by 22% YoY growth in our Insurance- as-a-Service segment, offset by a decline of 8% in our Hippo Home Insurance Program segment due to the completion of our efforts over the past 12 months to manage down our exposure to high-CAT geographies. If we normalize both current and prior year periods to exclude the TGP from our First Connect Platform, which we sold a majority stake in during Q4, the YoY growth rate would rise from 10% to 16%. Revenue Revenue growth in Q4 once again outpaced TGP growth, increasing 58% YoY to $102 million, up from $64 million in Q4 of last year. Like in the first three quarters of 2024, higher premium retention at HHIP and volume increases in the IaaS and Services segments were the primary drivers of growth. As a result of the higher premium retention at HHIP, Net Earned Premium as a percentage of Gross Earned Premium in our HHIP business rose to 83% in Q4, up from 29% a year ago. Like in previous quarters, IaaS revenue growth was driven mostly by the premium growth from existing programs, augmented by slightly higher risk-retention with some of the programs. We also launched a few new programs which we expect to become significant drivers of growth in 2025. Loss and Loss Adjustment Expense HHIP gross loss ratio improved 3pp YoY to 50%. The HHIP non-PCS improved 20pp to 43%, driven by the broad transformation we have been working on over the last 12 months, the activities of which included rate increases, structural changes to our coverages, and other underwriting actions. We achieved this improvement despite the portfolio-level shift away from higher-CAT geographies, which all things equal, would have tended to raise the non-PCS loss ratio. The HHIP PCS CAT loss ratio came in at 7% during Q4. This represents an increase of 17pp YoY, which is mostly explained by substantial current and prior accident period reserve releases in the fourth quarter of 2023 a year ago, which resulted in a PCS loss ratio of negative 10% in that period. The combination of YoY improvements in gross loss ratio and the improvements to our reinsurance structure drove an even larger improvement in our HHIP net loss ratio, which came in at 60% during the quarter, an improvement of 46pp versus Q4 of last year. Fixed Expense and Operating Leverage In Q4, we again delivered significant top-line growth while simultaneously reducing our operating expenses both as a percentage of revenue and on an absolute dollar basis. Relative to Q4 of last year, our sales and marketing, technology and development, and general and administrative expenses collectively declined by $8 million, a YoY decrease of 19%. When combined with the increases in our revenue over the same period, these costs fell from 69% of revenue in Q4 of last year to 35% of revenue this quarter. Attachments Original document Permalink Disclaimer Hippo Holdings Inc. published this content on March 06, 2025 , and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 06, 2025 at
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