Home insurance group Hippo, has announced its financial results for the first quarter of 2025, reporting year-on-year revenue growth of 30% to $110 million, with net loss increasing by $12 million to $48 million, with the Los Angeles wildfires contributing $45 million.

Despite the wildfires’ impact, the company’s Insurance-as-a-Service (IaaS) revenue grew 91% year-over-year. This growth was driven by higher gross earned premium and higher premium retention.

Conversely, Hippos Home Insurance Program (HHIP) revenue grew by 12% year-over-year, driven by higher premium retention offset by lower gross earned premium.

HHIP Gross Loss Ratio stood at 121% in Q1 2025, a 41pp increase from Q1 2024. According to Hippo, the LA wildfires contributed 56pp.

HHIP non-PCS loss ratio improved 8 percentage points year-over-year, to 53%. HHIP PCS loss ratio for the quarter was 68%, with the LA wildfires contributing 56pp. Consolidated Net Loss Ratio reached 106%, which includes 51pp from the LA wildfires.

The company’s adjusted EBITDA loss increased $21 million to $41 million, with the LA wildfires contributing $45 million to this figure as well. .

Hippo’s investments in operational efficiencies continued to pay off as fixed expenses (S&M, T&D, and G&A) declined by $7 million while revenue increased by $25 million year-over-year.

This resulted in an 18pp decrease year-over-year in these costs as a percentage of revenue, from 48% of revenue in Q1 2024 to 30% in Q1 2025.

Hippo reported cash and investments, excluding restricted cash, of $528 million, a $42 million decrease quarter-over-quarter. It attributed most of this decrease to losses from LA wildfires.

The company also announced it has signed an agreement to raise a $50 million surplus note. It is currently pending regulatory approval and is expected to close in Q2’25.

The insurer plans to use the incremental, risk-based capital to support the growth of diversified product lines it accesses via the Spinnaker platform. The Spinnaker surplus now stands at $198 million.

“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.

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.

“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.”

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