Hippo Holdings Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net income of $9 million ($0.33 per diluted share) for the quarter ended September 30, 2026, compared to $98 million in the prior-year quarter.
• Reported adjusted net income of $20 million ($0.74 per diluted share), a 9.3% increase year-over-year from $18 million in Q3 2025.
• Total revenue reached $156 million, representing a 29.4% increase from $120.6 million in Q3 2025.
• Gross Written Premium (GWP) grew 60.1% year-over-year to $498.1 million from $311.2 million in Q3 2025.
• Net Written Premium (NWP) increased 26% to $149.1 million from $117.9 million in Q3 2025.
• Combined ratio improved 1 percentage point to 98.4% from 99.6% in Q3 2025.
• Net loss ratio was 56.7% compared to 47.6% in Q3 2025, driven by normalized catastrophe losses.
• Catastrophe loss ratio was 6.5% compared to (0.3)% in Q3 2025.
• Expense ratio improved 10.3 percentage points to 41.7% from 52.0% in Q3 2025.
• Book value per share was $17.62, up 3.8% from $16.97 at year-end 2025.
• Total stockholders' equity was $469 million, an 8% increase from $436 million at year-end 2025.
• Annualized adjusted return on equity was 17.1% for the quarter.

Guidance and Future Outlook:

• Updated 2026 Full Year Gross Written Premium guidance upward to $1.7 billion – $1.75 billion (previously $1.65 billion – $1.7 billion).
• Updated 2026 Full Year Revenue guidance upward to $585 million – $590 million (previously $580 million – $585 million).
• Updated 2026 Full Year Combined Ratio guidance downward to 97% – 98% (previously 99% – 101%).
• Updated 2026 Full Year Adjusted Net Income guidance upward to $77 million – $80 million (previously $62 million – $70 million).
• Updated 2026 Full Year CAT Loss Ratio guidance downward to 8% (previously 10%).
• Net Written Premium guidance remains unchanged at $565 million – $580 million.
• Management expects long-term profitable growth across the MGA and program space, maintaining underwriting discipline and selectivity.

Business Segments and Product Lines:

• All four main lines of business (Homeowners, Renters, Commercial Multi-Peril, and Casualty) delivered growth in the quarter.
• Casualty GWP grew 146% year-over-year to $187.6 million.
• Commercial Multi-Peril GWP grew 63% year-over-year to $107.8 million.
• Homeowners GWP grew 11% to $112.2 million; Renters GWP grew 25% to $73.9 million.
• Casualty accounted for 38% of the overall GWP portfolio, Commercial Multi-Peril for 22%, and Homeowners for 23%.
• Homeowners represented 50% of Net Written Premium in the quarter, down from 64% in the prior-year quarter.
• Net retention rate for the quarter was 30%, slightly below the full-year guidance of approximately mid-30s.

Market and Competitive Landscape:

• The company operates as a technology-native insurance platform with a single reportable segment offering property & casualty insurance products.
• Top states by GWP in Q3 2026 were California (20%), New York (20%), Florida (10%), and Texas (6%).
• Management noted the market is softening, yet the company has been able to grow while improving profitability.
• The portfolio is becoming more balanced across perils to reduce volatility.

Risks and Challenges:

• Net loss ratio increased due to normalized catastrophe losses compared to the prior-year quarter which had no CAT losses.
• Net retention rates in fast-growing lines (Casualty and CMP) are lower, causing NWP growth to lag GWP growth.
• Forward-looking statements regarding adjusted net income cannot be reconciled to GAAP net income without unreasonable effort due to unpredictable items like share-based compensation.
• Risks include severe weather events, climate change, global pandemics, terrorism, and regulatory scrutiny regarding rates and forms.
• Cybersecurity risks and potential data privacy compliance issues are noted.
• Dependence on third-party providers for data and services presents potential operational risks.

Management Commentary and Tone:

• Rick McCathron, President and CEO, described the quarter as "strong," highlighting a 98% combined ratio and a 9% increase in adjusted net income.
• Management credited underwriting discipline, a diversified portfolio, and a program platform built for long-term partnerships.
• The CEO emphasized staying selective and writing more only where underwriting economics are attractive.
• The tone reflects confidence in the foundation built for long-term profitable growth despite market softening.

Other Key Points:

• The prior-year quarter's net income included a $91 million net gain on the sale of the home builder distribution network.
• The company has a single reportable segment.
• Subsidiaries include Hippo Insurance Services, Spinnaker Insurance Company, Spinnaker Specialty Insurance Company, and Wingsail Insurance Company.
• Total assets increased to $2,752.2 million as of September 30, 2026, from $1,905.5 million at year-end 2025.
• Loss and loss adjustment expense reserves increased to $642.7 million from $420.4 million at year-end 2025.
• Unearned premiums increased to $867.9 million from $579.7 million at year-end 2025.
• Net cash provided by operating activities for the nine months ended September 30, 2026, was $124.2 million.
• No share repurchases occurred in the nine months ended September 30, 2026, compared to $14.5 million in the prior year period.