Hippo’s Q1 home insurance program loss ratio jumps to 121% on wildfire losses

By Michael Loney

May 7 - (The Insurer) – Hippo has reported that the gross loss ratio for its home insurance program worsened by 41 points to 121% in the first quarter, while the insurtech also announced it is raising a $50 million surplus note.

Palo Alto-based Hippo increased revenue 30% in the quarter to $110 million, up from $85 million in Q1 of last year. The growth was driven primarily by its insurance-as-a-service (IaaS) and Hippo Homeowners Insurance Program (HHIP) segments.

IaaS revenue grew 91% to $39 million driven by higher gross earned premium and higher premium retention.

HHIP revenue grew 12% to $62 million driven by higher premium retention offset by lower gross earned premium.

Los Angeles wildfire losses contributed 59 points of the Q1 2025 121% HHIP gross loss ratio, which was a 41 point increase from 80% in last year’s first quarter.

The HHIP non-PCS loss ratio of 53% was a 6 point year over year improvement.

The consolidated net loss ratio of 106% was up from 87% in Q1 2024, with the Los Angeles wildfires contributing 51 points.

The Q1 net loss attributable to Hippo increased to $48 million from $36 million, with the Los Angeles wildfires contributing $45 million. The $45 million wildfires figure includes the selling of Hippo’s subrogation rights, California FAIR Plan assessment and reinstatement premium.

The Q1 adjusted Ebitda loss increased to $41 million from $20 million in Q 2024.

Hippo president and CEO Rick McCathron said his company in Q1 “proactively supported customers affected by the Los Angeles wildfires and further advanced the key long-term value drivers in our business.”

He continued: "Our homebuilder channel, which provides access to new, more resilient homes, drove a 35% year-over-year increase in gross written premium. Written premium outside of the Hippo Home Insurance Program increased by 21% year-over-year – an important source of diversification."

Hippo continued to reduce HHIP written premium for existing homes in cat prone areas in the quarter, with McCathron reporting that “these efforts are now largely complete.”

“With greater confidence in our geographic footprint, rate adequacy, and improved deductible structure, we are now preparing to expand new business in this program,” he said.

Hippo also announced it has signed an agreement to raise a $50 million surplus note, which will be used to support the growth of diversified product lines it accesses via the Spinnaker platform.

"High interest in our surplus note demonstrates the trust and enthusiasm investors have in Hippo and our ability to sustain a growth trajectory while maintaining strong underwriting results," said McCathron.