Hippo Holdings released its consolidated financial results for the first quarter of 2025, reporting increased revenue alongside elevated loss ratios tied to the Los Angeles wildfires.
Total revenue for the quarter rose 30% year-over-year to $110 million. Hippo’s Insurance-as-a-Service (IaaS) segment recorded a 91% increase in revenue, supported by higher gross earned premium and improved premium retention. The Homeowners Insurance Program (HHIP) revenue grew 12%, driven by stronger retention despite lower gross earned premium.
Claims costs increased significantly during the quarter. HHIP’s gross loss ratio rose to 121%, up 41 percentage points from the prior year. The company attributed 56 percentage points of this to the Los Angeles wildfires. HHIP’s non-catastrophe loss ratio improved by 6 points to 53%, while the catastrophe loss ratio stood at 68%.
The company’s consolidated net loss ratio reached 106%, with the wildfires contributing 51 percentage points. Excluding the impact of the catastrophe events, Hippo cited underlying improvements in profitability and expense control.
“We delivered on two of our most important objectives as a company. We proactively supported customers affected by the Los Angeles wildfires and further advanced the key long-term value drivers in our business,” said Hippo president and CEO Rick McCathron.
The first-quarter results follow a third quarter in 2024 that showed marked improvement in key financial and operational indicators. For Q3 2024, Hippo reported a 65% year-over-year increase in total revenue to $95 million.
At that time, Insurance-as-a-Service and other service lines accounted for 81% of total premiums generated, which rose 21% to $368 million.
Hippo also recorded gains in HHIP underwriting performance during Q3, with a 3-point year-over-year improvement in gross loss ratio to 72%, and a 67-point improvement in net loss ratio to 84%. These metrics reflected operational adjustments and cost efficiencies.
Net loss in Q3 2024 dropped significantly to $8.5 million, an 84% year-over-year reduction. The first quarter of 2025, while continuing revenue growth, saw profitability affected by catastrophe losses, reversing some of the prior quarter’s underwriting progress.
Operational costs declined despite top-line growth. Selling and marketing, technology and development, and general and administrative expenses fell by $7 million compared to Q1 2024. With revenue increasing $25 million over the same period, these fixed expenses declined to 30% of revenue, down from 48% a year earlier.
Hippo reported a net loss of $48 million for the quarter, up $12 million year-over-year. The company said $45 million of the net loss was attributable to the Los Angeles wildfires. Adjusted EBITDA loss increased to $41 million, up $21 million, also reflecting the wildfire-related impact.
Cash and investments, excluding restricted cash, totaled $528 million at quarter-end, down $42 million quarter-over-quarter, primarily due to catastrophe losses. The company’s insurance subsidiary, Spinnaker, reported a statutory surplus of $198 million.
Hippo also announced a signed agreement to raise $50 million via a surplus note, pending regulatory approval, with the transaction expected to close in the second quarter of 2025.
What are your thoughts on this story? Please feel free to share your comments below.
