HIPO - Hippo execs boast reinsurance renewals expected loss ratios

Hippo Holdings ( NYSE: HIPO ) stock edged up 1.1% in Wednesday morning trading as the insurance broker's executives cheered the successful placement of its 2023 reinsurance program.

“In one of the most difficult reinsurance markets in the last 20 years, we successfully placed reinsurance on our flagship homeowners program on terms that are better than our treaty from last year,” said Hippo CEO and President Rick McCathron.

The company's expected loss ratios "are rapidly converging to our long-term targets," he added.

Stewart Ellis, Hippo's ( HIPO ) CFO, welcomed the "outcome of our renewals," saying its 2023 program added "reinsurance protection against large losses from major catastrophes to ensure our financial stability."

Specifically, the company's Proportional Reinsurance Treaties secured proportional, quota share reinsurance from six third-party reinsurers. 40% of the premium and losses is expected to be retained through its insurance company subsidiaries or its captive reinsurance company.

2023's treaty reduced the use of loss participation features resulting in an overall loss exposure for catastrophic events similar to the prior year.

In addition, Hippo ( HIPO ) raised its purchases of non-proportional Excess-of-Loss reinsurance, lifting the per occurrence XOL limit by 32%.

Seeking Alpha contributor Gary Bourgeault in December 2022 viewed HIPO as a Hold as the company took "huge losses."

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