Hippo Enterprises Inc. wants to transform homeowners’ insurance by leveraging customer data to make it easier and faster to get coverage, Hippo’s chief executive said in an interview.
The company, which is valued at $ 5 billion and is due to go public on Tuesday through a company with a blank check, is among a slew of insurtechs trying to snatch business from reputable insurers.
“I want to double the amount of technology, data, engineering and value added,” CEO Assaf Wand said of the $ 638 million Hippo will receive from the listing.
Hippo’s trading aspirations reflect companies such as Geico Corp. and Progressive Corp., which made the auto insurance market more competitive.
To do this, Hippo plans to develop algorithms to speed up policy pricing and create new products, Wanda said.
Hippo is backed by Silicon Valley entrepreneurs Reed Hoffman and Mark Pincus. Founded in 2015, it also offers tenant coverage and offers products for other homeowner headaches that insurers typically don’t cover, such as upkeep, safety, repairs, and ultimately home sales.
For example, Hippo offers sensors that beep when water flows under the sink, so a plumber can be called in to prevent serious damage. This helps the homeowner, but also reduces the amount that Hippo will have to pay for claims. Likewise, outdoor motion sensors can help prevent burglaries.
Hippo goes public through Reinvest Technology Partners, its specialized acquisition firm, and will begin trading on Tuesday under the name of Hippo Holdings Inc.
Hippo’s total written awards have grown from $ 142 million in 2018 to $ 405 million in 2020, the company said. He projects $ 544 million this year and $ 2.28 billion by 2025.
“Hippo has grown extraordinarily fast,” said Tom Morton, senior analyst at S&P Global Market Intelligence. “The real estate market is so hot that this is a big part of their growth.”
Other recently listed insurtech companies such as Lemonade Inc. and Porch Group Inc. have grown since their placement.
But, according to Morton, there are risks associated with a fall in the housing market. PitchBook analyst Robert Le said insurtechs as a whole must demonstrate consistent profitability in order to attract investors.
“Fast-growing insurance companies with a high loss ratio are risky,” Le said.
Last year, Hippo acquired Spinnaker Insurance Co and an accident insurer, obtaining licenses in all 50 US states. It is currently sold in 37 states, covering about 80% of US homeowners, and is expected to expand to 90% this year. Among states with large populations, it offers coverage in California, but not New York.
(Reporting by Alvin Scott in New York, editing by Lauren Tara LaCapra and Matthew Lewis)
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