Hippo pleased with 2023 reinsurance renewals in ‘most difficult market’
Homeowners insurtech Hippo placed its 2023 reinsurance programme on terms better than its treaty from last year in “one of the most difficult reinsurance markets” seen in nearly two decades.
Hippo secured proportional, quota share reinsurance treaties from a diverse panel of six third-party reinsurers, rated “A-” or better by AM Best or appropriately collateralised. It expects to retain approximately 40% of the premium and losses through its insurance company subsidiaries or captive reinsurance company.
In comparison to the prior year treaty, Hippo reduced the use of loss participation features resulting in an overall loss exposure for catastrophic events similar to the prior year.
Additionally, Hippo increased its purchases of non-proportional excess-of-loss (XOL) reinsurance, raising its per occurrence XOL limit by 32%. The company claims it is protected on the upper layers of risk beyond a 1-in-250 year event.
Rick McCathron, CEO and president of Hippo, said: “In one of the most difficult reinsurance markets in the last 20 years, we successfully placed reinsurance on our flagship homeowners programme on terms that are better than our treaty from last year.
“Our expected loss ratios are rapidly converging to our long-term targets which drove our strategic decision to re-position our programme. We are pleased that reinsurers continue to see the value in our technology-driven, proactive approach.”
“We’re very pleased with the outcome of our renewals,” added Stewart Ellis, CFO. “Our 2023 programme retains more of the premium associated with the day-today risks our customers face and where we believe our proactive approach to preventing losses can really make a difference. At the same time, we’ve added reinsurance protection against large losses from major catastrophes to ensure our financial stability.”
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