Hippo rounds off 2024 reinsurance placement, improves terms for 2nd year running

Home insurance group, Hippo, has completed the placement of its 2024 reinsurance program with improved terms for the second year in a row.

Rick McCathron, CEO and President, commented, “Our reinsurance partners have affirmed their confidence in our business with improved terms for the second year in a row.

“Our efforts to reduce exposure to weather-related volatility in our business, combined with our proactive approach to home protection, has continued to drive significant improvements in loss ratio, making the Hippo Home Insurance Program attractive to reinsurers, many of whom have been with us for multiple years.”

Hippo explained that its decision to purchase substantially less proportional reinsurance in 2024 and retain more Hippo Home Insurance Program premium and the associated non-catastrophe attritional losses on its balance sheet reflects the expectation of continued improvement in the attritional loss ratio and essential steps taken by the firm to lower volatility.

“By reducing the Hippo Home Insurance Program’s reliance on proportional reinsurance, we expect a smaller impact from loss participation features compared to prior treaties,” Hippo added.

Commenting on non-proportional reinsurance, the firm noted that it increased its purchases of non-proportional Excess-of-Loss (XOL) reinsurance, raising its per occurrence XOL limit by 11% and increasing the number of participating reinsurers from 14 to 19.

Under this placement, along with Hippo’s existing catastrophe protections, the firm is protected on the upper layers of risk up to a 1-in-250-year event.

Hippo CFO, Stewart Ellis, said, “The successful placement of our 2024 reinsurance program, and our decision to retain more of the non-PCS exposure and corresponding premium, on our own balance sheet reflects our growing confidence in the profitability and predictability of our underwriting results.”