Hippo (HIPO) Q2 2024 earnings summary

Executive summary

• Revenue increased 88% year-over-year to $90 million for Q2 2024, driven by strong growth in services and Insurance-as-a-Service segments, and improved operational efficiency through proprietary technology.

• Total generated premium grew 20% year-over-year to $380.1M, led by Insurance-as-a-Service and aggregator channels, while Hippo Home Insurance Program premiums declined due to risk reduction actions.

• Substantial reduction in catastrophic losses despite industry-wide severe weather, validating risk management strategies.

• Adjusted EBITDA loss narrowed to $24.9M from $87.7M in Q2 2023, with positive Adjusted EBITDA targeted for Q4 2024.

• Strategic actions included pausing new HO3 underwriting, raising rates, increasing deductibles, and non-renewing high-risk policies to reduce exposure to catastrophic weather events.

Financial highlights

• Q2 2024 revenue rose 88% year-over-year to $90 million; total generated premium (TGP) up 20% to $380 million, with services and Insurance-as-a-Service segments representing 83% of TGP.

• Net loss attributable improved to $40.5M from $107.8M in Q2 2023, and Adjusted EBITDA loss improved by $62.8M year-over-year.

• Net earned premium for Q2 2024 was $64.4M, up 189% year-over-year.

• Cash and investments, excluding restricted cash, totaled $491 million at quarter end.

• Loss and loss adjustment expenses fell 21% to $60.4M in Q2 2024.

Outlook and guidance

• Management expects continued improvement in loss ratios and financial results as underwriting and pricing actions take effect, with positive Adjusted EBITDA forecast for Q4 2024.

• TGP growth expected to accelerate in the second half of 2024 as cat exposure management completes.

• Revenue projected to continue growing faster than TGP due to reinsurance structure changes.

• Minimum cash and investments (excluding restricted cash) expected to exceed $450 million when Adjusted EBITDA turns positive.

• Anticipates further declines in Hippo Home Insurance Program premium volume in 2024 due to ongoing risk reduction measures.