Hippo CEO hopes enrollment will fuel better insurance coverage for homeowners

Assaf Wand, CEO and co-founder of insurance technology startup Hippo, owns sensors that the company provides to clients of its homeowner protection policies, in New York, United States, July 30, 2021, in this screenshot from video July 30, 2021. REUTERS / Alwyn Scott

NEW YORK, Aug. 3 (Reuters) – Hippo Enterprises Inc (RTP.N) wants to change homeowners insurance by using customer data to make it faster and easier to get coverage, Hippo chief executive said in an interview.

The company, which has a valuation of $ 5 billion and is due to be made public on Tuesday by a blank check company, is among a slew of “insurtech” announcements that attempt to squeeze business from established insurers.

“I want to double the technology, the data and more engineering and more capacity,” CEO Assaf Wand said of the $ 638 million Hippo will receive in listing proceeds.

Hippo’s business aspirations reflect companies like Geico Corp (BRKa.N) and Progressive Corp (PGR.N) which have made the auto insurance market more competitive.

To get there, Hippo plans to develop algorithms that speed up police quotes and create new products, Wand said.

Hippo is backed by Silicon Valley entrepreneurs Reid Hoffman and Mark Pincus. Founded in 2015, it also provides coverage to tenants and offers products for other landlord headaches that insurers traditionally don’t cover, such as maintenance, security, repairs and possibly the sale of the home.

For example, Hippo provides sensors that beep when water leaks under a kitchen sink, so a plumber can be called in to prevent serious damage. This helps the owner, but also reduces the amount Hippo would have to pay in claims. Likewise, outdoor motion detectors can help prevent burglaries.

Hippo goes public through Reinvest Technology Partners (RTPZ.N), its special purpose acquisition company, and will begin trading on Tuesday as Hippo Holdings Inc.

Hippo’s total written premiums increased from $ 142 million in 2018 to $ 405 million in 2020, the company said. It is forecasting $ 544 million this year and $ 2.28 billion by 2025.

“Hippo has grown at an extraordinary rate,” said Tom Morton, senior analyst at S&P Global Market Intelligence. “The real estate market is so hot, that’s a big part of their growth.”

Other recently listed insurtechs like Lemonade Inc (LMND.N) and Porch Group Inc (PRCH.O) have increased since their listing.

But there are risks associated with a downturn in the housing market, Morton said. And insurtechs need to show stable profitability overall to win over investors, said Robert Le, analyst at PitchBook.

“High growth technology insurance companies with high loss rates are risky,” Le said.

Hippo bought property and casualty insurer Spinnaker Insurance Co last year, obtaining licenses in all 50 US states. It currently sells in 37 states, reaching around 80% of US owners and is expected to reach 90% this year. Among states with large populations, it provides coverage in California but not New York.

Reporting by Alwyn Scott in New York Editing by Lauren Tara LaCapra and Matthew Lewis

Our Standards: Thomson Reuters Trust Principles.

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