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What changed in Hippo Holdings Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Hippo Holdings Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+382 added−438 removedSource: 10-K (2026-03-05) vs 10-K (2025-03-06)

Top changes in Hippo Holdings Inc.'s 2025 10-K

382 paragraphs added · 438 removed · 223 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeBUSINESS Our Company In August 2021, Hippo Enterprises Inc., a Delaware corporation (“Old Hippo”), and Reinvent Technology Partners Z, a Cayman Islands exempted company and special purpose acquisition company (“RTPZ”), completed a merger and other transactions pursuant to which a subsidiary of RTPZ was merged with and into Old Hippo and Old Hippo survived as a wholly owned subsidiary of RTPZ (collectively, we refer to these transactions as the “Business Combination”).
Biggest changeITEM 1. BUSINESS Our Company In August 2021, Hippo Enterprises Inc., a Delaware corporation (“Old Hippo”) completed a business combination resulting in Old Hippo becoming a wholly owned subsidiary of, Reinvent Technology Partners Z, a Cayman Islands exempted company and special purpose acquisition company which at that time changed its name to Hippo Holdings Inc. Hippo Holdings Inc.
For additional information, see “Risk Factors — Risks Related to Our Industry — We are subject to extensive insurance industry regulations” and “— Our insurance company subsidiaries are subject to 11 minimum capital and surplus requirements, and failure to meet these requirements could subject us to regulatory action.” Intellectual Property We consider the Hippo brand and those brands of our subsidiaries to be among our most valuable assets.
For additional information, see “Risk Factors — Risks Related to Our Industry — We are subject to extensive insurance industry regulations” and “— Our insurance company subsidiaries are subject to minimum capital and surplus requirements, and failure to meet these requirements could subject us to regulatory action.” Intellectual Property We consider the Hippo brand and those brands of our subsidiaries to be among our most valuable assets.
We believe the market is poised for rapid transformation with trends in emerging technology that will allow better assessment of home insurance risk resulting in more accurate pricing, proliferation of application programming interfaces (“APIs”), and meeting the rising customer expectations for personalized and real-time products.
We believe the homeowners market is poised for rapid transformation with trends in emerging technology that will allow better assessment of home insurance risk resulting in more accurate pricing, proliferation of application programming interfaces (“APIs”), and meeting the rising customer expectations for personalized and real-time products.
For example, in California the California Consumer Privacy Act (the “CCPA”), which came into force in 2020, gives California residents expanded rights to access and request deletion of their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used and shared.
For example, in California the California Consumer Privacy Act (the “CCPA”), which came into force in 2020, gives California residents expanded rights to access and request deletion of their personal information, the right to opt out of certain personal information sharing, and receive detailed information about how their personal information is used and shared.
However, new entrants must overcome high barriers to entry: • Significant initial capital requirements to support insurance risk, challenges finding cost-effective reinsurance without an underwriting track record, expensive off-the-shelf policy and claims management systems, or resource-intensive investment in developing a proprietary tech stack • Complicated and fragmented regulatory landscape with a unique set of rules from each state • Significant resource investment in tech and infrastructure to access, collect and validate insurance-related data, in addition to the development of multiple customized APIs 7 • Difficulty accessing distribution networks, built upon a legacy, agent-based distribution, or resource-intensive process of creating and scaling new, alternative customer acquisition channels We believe incumbents face multiple challenges in responding to the ongoing transformation and meeting customer needs, including channel conflict, data stability and veracity (stemming from unverified customer-supplied data), and too much reliance on aging and siloed technology.
However, new entrants must overcome high barriers to entry: • Significant initial capital requirements to support insurance risk, challenges finding cost-effective reinsurance without an underwriting track record, expensive off-the-shelf policy and claims management systems, or resource-intensive investment in developing a proprietary tech stack • Complicated and fragmented regulatory landscape with a unique set of rules from each state • Significant resource investment in tech, including artificial intelligence, and infrastructure to access, collect and validate insurance-related data, in addition to the development of multiple customized APIs • Difficulty accessing distribution networks, built upon a legacy, agent-based distribution, or resource-intensive process of creating and scaling new, alternative customer acquisition channels We believe incumbents face multiple challenges in responding to the ongoing transformation and meeting customer needs, including channel conflict, data stability and veracity (stemming from unverified customer-supplied data), and too much reliance on aging and siloed technology.
Any reduction in the risk-based capital ratios of our insurance 10 subsidiaries could require us to take remedial actions to increase our insurance subsidiaries’ capital and could also adversely affect their financial strength ratings as determined by statistical rating agencies.
Any reduction in the risk-based capital ratios of our insurance subsidiaries could require us to take remedial actions to increase our insurance subsidiaries’ capital and could also adversely affect their financial strength ratings as determined by statistical rating agencies.
In the U.S., insurance companies are subject to the privacy provisions of the federal Gramm-Leach-Bliley Act and the National Association of Insurance Commissioners (“NAIC”) Insurance Information and Privacy Protection Model Act, to the extent adopted and implemented by 8 various state legislatures and insurance regulators.
In the U.S., insurance companies are subject to the privacy provisions of the federal Gramm-Leach-Bliley Act and the National Association of Insurance Commissioners (“NAIC”) Insurance Information and Privacy Protection Model Act, to the extent adopted and implemented by various state legislatures and insurance regulators.
According to the Model AI Bulletin, the AIS program should: (1) address governance, risk management controls and internal audit functions, (2) be adopted by the board of directors or an appropriate board committee, (3) be tailored to and proportionate with the insurer’s use and reliance on AI and AI systems, (4) be independent or part of an insurer’s existing enterprise risk management framework; (5) address the use of all AI systems that make decisions impacting customers and include processes and procedures for notifying impacted consumers that AI systems are in use; (6) address the AI systems used with respect to regulated insurance practices whether developed by an insurer or third party vendor; and (7) address the use of AI systems across the insurance product life cycle.
According to the Model AI Bulletin, the AIS program should: (1) address governance, risk management controls and internal audit functions, (2) be adopted by the board of directors or an appropriate board committee, (3) be tailored to and proportionate with the insurer’s use and reliance on AI and AI systems, (4) be independent or part of an insurer’s existing enterprise risk management framework; (5) address the use of all AI systems that make decisions impacting customers and include processes and procedures for notifying impacted consumers that AI systems are in 10 Table of Contents use; (6) address the AI systems used with respect to regulated insurance practices whether developed by an insurer or third-party vendor; and (7) address the use of AI systems across the insurance product life cycle.
Additionally, the NAIC has been examining the use of artificial intelligence in the insurance industry, such as the sources of some of the data we use in marketing and underwriting our products.
Artificial Intelligence Regulation Additionally, the NAIC has been examining the use of artificial intelligence in the insurance industry, such as the sources of some of the data we use in marketing and underwriting our products.
As of December 31, 2024, our patent portfolio consisted of five U.S. utility patents covering autonomous cancellation of insurance policies using a multi-tiered data structure, system and method for updating a policy object and real time rate monitoring. Our issued patents are expected to expire between May 23, 2038 and October 13, 2040.
As of December 31, 2025, our patent portfolio consisted of five U.S. utility patents covering autonomous cancellation of insurance policies using a multi-tiered data structure, system and method for updating a policy object and real time rate monitoring. Our issued patents are expected to expire between May 23, 2038 and October 13, 2040.
Additionally, we are subject to the Telephone Consumer Protection Act which restricts the making of telemarketing calls and the use of automatic telephone dialing systems. Violators of these laws face regulatory enforcement action, substantial civil penalties, injunctions, and in some states, private lawsuits for damages. Privacy and data security regulation in the U.S. is rapidly evolving.
Additionally, we are subject to the Telephone Consumer Protection Act which restricts the making of telemarketing calls and the use of automatic telephone dialing systems. Violators of these laws face regulatory enforcement action, substantial civil penalties, injunctions, and in some states, private lawsuits for damages. Privacy regulation in the U.S. is rapidly evolving.
For additional information, see “ Risk Factors — Risks Related to Our Business — Failure to protect or enforce our intellectual property rights could harm our business, results of operations, and financial condition ” and “— Claims by third parties that we infringed their proprietary technology or other intellectual property rights could result in litigation which is expensive to support, and if resolved adversely, could harm our business .” Available Information Our internet website address is www.hippo.com.
For additional information, see “ Risk Factors — Risks Related to Our Business — Failure to protect or enforce our intellectual property rights could harm our business, results of operations, and financial condition ” and “— Claims by third parties that we infringed their proprietary technology 12 Table of Contents or other intellectual property rights could result in litigation which is expensive to support, and if resolved adversely, could harm our business .” Available Information Our internet website address is www.hippo.com.
For additional information, see “Risk Factors — Risks Related to Our Business — We are subject to laws and regulations concerning our collection, processing, storage, sharing, disclosure, and use of customer information and other sensitive data, and our actual or perceived (or alleged) failure to comply with data privacy and security laws and regulations could damage our reputation and brand and harm our business and operating results.” Data Security and Cybersecurity Laws In addition to data privacy laws, a growing number of states have enacted data security and cybersecurity laws requiring companies to take proactive data security measures to protect sensitive information from cybersecurity threats.
For additional information, see “Risk Factors — Risks Related to Our Business — We are subject to laws and regulations concerning our collection, processing, storage, sharing, disclosure, and use of customer information and other sensitive data, and our actual or perceived (or alleged) failure to comply with data privacy and security laws and regulations could damage our reputation and brand and harm our business and operating results.” Data Security and Cybersecurity Laws In addition to data privacy laws, a growing number of both federal and state regulatory bodies have enacted data security and cybersecurity laws requiring companies to take proactive data security measures to protect personal information from cybersecurity threats.
The laws of these other jurisdictions contain similar limitations on the payment of dividends by insurance companies that are domiciled in that state, and such laws may be more restrictive than Illinois and Texas. In addition, the NAIC has recently developed a group capital calculation covering all entities of the insurance company group for use in solvency monitoring activities.
The laws of these other jurisdictions contain similar limitations on the payment of dividends by insurance companies that are domiciled in that state, and such laws may be more restrictive than Illinois and Texas. In addition, in 2020 the NAIC adopted a group capital calculation covering all entities of the insurance company group for use in solvency monitoring activities.
As of December 31, 2024, Hippo’s trademark portfolio consisted of forty registered trademarks, and Spinnaker owned one registered trademark.
As of December 31, 2025, Hippo’s trademark portfolio consisted of forty registered trademarks, and Spinnaker owned one registered trademark.
Our Values and People As of December 31, 2024, our workforce consists of a total of 478 people, of which 349 were located in the United States and 129 located internationally. We engage temporary workers and independent contractors when necessary in connection with a particular project, to meet increases in demand or to fill vacancies while recruiting a permanent employee.
Our Values and People As of December 31, 2025, our workforce consists of a total of 540 employees, of which 371 were located in the United States and 169 located internationally. We engage temporary workers and independent contractors when necessary in connection with a particular project, to meet increases in demand or to fill vacancies while recruiting a permanent employee.
As of January 2025, 21 states have adopted bulletins similar to the Model AI Bulletin, and California, Colorado, New Mexico, New York, Texas, and Utah have also adopted regulations specific to the use of AI.
As of January 2026, 25 states have adopted bulletins similar to the Model AI Bulletin, and California, Colorado, Illinois, New York, Texas, and Utah have also adopted regulations specific to the use of AI.
The CCPA allows the California Attorney General to impose civil penalties for violations and provides a private right of action for certain data breaches. In 2020, California voters also passed the California Privacy Rights Act (“CPRA”), which amended the CCPA and took effect on January 1, 2023.
The CCPA allows the regulator to impose civil penalties for violations and provides a private right of action for certain data breaches. The California Privacy Rights Act (“CPRA”) amended the CCPA and took effect on January 1, 2023.
Twenty states and the District of Columbia require that companies employ reasonable data security measures, and eight states have prescriptive laws that require companies to develop, implement, and maintain specific data security measures and, in some cases, a comprehensive information security program.
In addition, a majority of states require that companies employ reasonable data security measures, and several have prescriptive laws that require companies to develop, implement, and maintain specific data security measures and, in some cases, a comprehensive information security program.
The regulations implementing these laws require insurance companies to disclose their privacy practices to consumers, allow customers to opt-in or opt-out, depending on the state, of the sharing of certain personal information with unaffiliated third parties, and maintain certain security controls to protect their information.
The regulations implementing these laws require insurance companies to, among other things, disclose their privacy practices to consumers, explain data-sharing practices, allow customers to opt-out of the sharing of certain personal information with unaffiliated third parties, and maintain certain security controls to protect their information.
For additional information, see “Risk Factors — Risks Related to Our Industry —The increasing adoption by states of cybersecurity regulations has imposed, and could impose additional, compliance burdens on us and expose us to additional liability” and Item 1C. Cybersecurity. Insurance Regulation Hippo is subject to extensive regulation, primarily at the state level.
For additional information, see “Risk Factors — Risks Related to Our Industry —The increasing adoption by states of cybersecurity regulations has imposed, and could impose additional, compliance burdens on us and expose us to additional liability” and Item 1C. Cybersecurity.
Hippo harnesses technology and data to refocus the home insurance experience around the customer’s needs at every stage of the relationship. We seek to facilitate an active partnership with our customers to help prevent losses, which in turn creates better results for Hippo. The result creates an opportunity for a win-win.
Our mission is to protect what matters most in a rapidly evolving world. 6 Table of Contents Hippo harnesses technology and data to refocus the home insurance experience around the customer’s needs at every stage of the relationship. We seek to facilitate an active partnership with our customers to help prevent losses, which in turn creates better results for Hippo.
Seasonality Seasonal patterns can impact our incurrence of claims losses, as seasonal weather patterns impact the level and amount of claims we receive. These patterns include hurricanes, wildfires, and coastal storms in the fall, cold weather patterns and changing home heating needs in the winter, and tornados and hailstorms in the spring and summer.
These patterns include hurricanes, wildfires, and coastal storms in the fall, cold weather patterns and changing home heating needs in the winter, and tornados and hailstorms in the spring and summer.
And with the agent population shrinking (according to McKinsey & Company research), incumbents may find it harder to access new customers who increasingly choose digital and embedded channels. Competition We face competition from established national brand names that offer competing products.
And with the agent population shrinking (according to 8 Table of Contents McKinsey & Company research), incumbents may find it harder to access new customers who increasingly choose digital and embedded channels.
In particular, the NAIC has developed a system to test the adequacy of statutory capital and surplus of U.S.-based insurance companies, known as risk-based capital, which all states have adopted. This system establishes the minimum amount of capital and surplus necessary for an insurance company to support its overall business operations in consideration of its size and risk profile.
This system establishes the minimum amount of capital and surplus necessary for an insurance company to support its overall business operations in consideration of its size and risk profile.
These more established competitors have advantages such as brand recognition, greater access to capital, breadth of product offering, and scale of resources. We also face competition from select and new insurtechs that offer digital platforms. However, the market is fragmented, with just one carrier having over 10% market share according to S&P Capital IQ.
Competition We face competition from both established national brand names that offer competing products and specialists within our core verticals. These more established competitors have advantages such as brand recognition, greater access to capital, breadth of product offering, and scale of resources. We also face competition from select 7 Table of Contents and new insurtechs that offer digital platforms.
Our people team is focused on identifying and retaining top talent and building a world class organization. We use recognition and rewards including compensation and equity to attract and retain our talent. In the fourth quarter of 2023, we launched an expense reduction initiative across the Company, which included a reduction in staff.
Our people team is focused on identifying and retaining top talent and building a world class organization. We use recognition and rewards including compensation and equity to attract and retain our talent. Seasonality Seasonal patterns can impact our incurrence of claims losses, as seasonal weather patterns impact the level and amount of claims we receive.
Any increase in the amount of capital or reserves our insurance subsidiaries are required to hold could reduce the amount of future dividends such subsidiaries are able to distribute to the holding company.
Any increase in the amount of capital or reserves our insurance subsidiaries are required to hold could reduce the amount of future dividends such subsidiaries are able to distribute to the holding company. 11 Table of Contents In particular, the NAIC has developed a system to test the adequacy of statutory capital and surplus of U.S.-based insurance companies, known as risk-based capital, which all states have adopted.
States have also enacted industry-specific data security and cybersecurity laws, including the NAIC Insurance Data Security Model Law, which 25 states have adopted, and the New York Department of Financial Services (“NYDFS”) Cybersecurity Requirements for Financial Services Companies (the “NYDFS Reg”).
States have also enacted industry-specific data security and cybersecurity laws, including the NAIC Insurance Data Security Model Law, which established standards for data security and for the investigation and notification of insurance commissioners of cybersecurity events involving unauthorized access to, or the misuse of, certain nonpublic information.
There is also discussion in Congress of a new comprehensive federal data protection and privacy law to which we likely would be subject if it is enacted. Various regulators are interpreting existing state consumer protection laws to impose evolving standards for the online collection, use, dissemination and security of other personal data.
This has created a complex mix of enforcement priorities and legal interpretations that companies must navigate. Congress, state legislatures, and regulatory authorities continue to consider additional privacy regulations. 9 Table of Contents Various regulators are interpreting existing state consumer protection laws to impose evolving standards for the online collection, use, dissemination and security of other personal data.
The CCPA marked the beginning of a trend toward more stringent privacy legislation in the U.S., and multiple states have subsequently enacted or proposed similar laws.
The CCPA/CPRA marked the beginning of a trend toward more stringent privacy legislation in the U.S., with multiple states subsequently enacting their own privacy laws, creating a patchwork of laws that has resulted in increased compliance obligations for companies. State attorneys general and privacy agencies are setting new legal precedents through significant settlements and investigations.
Removed
In connection with the Business Combination, RTPZ changed its name to Hippo Holdings Inc. Hippo Holdings Inc. (“Hippo”) is an insurance holding company, with subsidiaries that provide property and casualty insurance products to both individuals and business customers. The Company conducts its operations through three reportable segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program.
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(“Hippo”) is a technology-native insurance holding company that, through its subsidiaries, delivers a broad range of insurance products to customers via its owned and partner MGAs which generated $1.1 billion of gross written premium in 2025.
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The Company offers its services primarily in the United States. Services Hippo’s Services Segment is comprised of our Consumer Agency and First Connect. This business is fee-driven and are not exposed to any volatility associated with losses related to the underlying insurance policies.
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By combining disciplined underwriting, advanced data analytics, and a customer-first approach, Hippo is building a diversified risk portfolio aimed at delivering sustainable long-term returns on stockholders’ equity. The Company offers its services primarily in the United States as of December 31, 2025.
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Consumer Agency Our Consumer Agency helps consumer customers who are shopping for insurance find the policies that best meet their needs. The Agency sells home insurance policies from the Hippo Home Insurance Program and from third-party carriers, as well as other personal lines policies from third party carriers.
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Our goal is to create long-term value for our stockholders by generating attractive risk adjusted underwriting results while growing our business. We strive to accomplish this by growing our diversified portfolio of risk through disciplined underwriting, continuous portfolio optimization, and risk management—striving to deliver consistent, sustainable returns across market cycles.
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Our Agency is licensed to provide agency services in all 50 states and is appointed with 50+ carriers to sell homeowners, auto, flood, earthquake, pet, and other insurance products. We have built next-generation technology platforms to increase agent efficiency and policies per customer while streamlining the customer flow and optimizing the right products for each customer.
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Hippo had $436.1 million of stockholders’ equity at year-end 2025, operates as a multi-carrier platform and strives to be the carrier of choice for leading MGAs.
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First Connect First Connect Insurance Services business is a digital platform designed to support independent agents by providing access to some of the nation’s top carriers. The agent-centric platform provides access to carriers and a variety of products that includes home, auto, cyber, small business, life, specialty lines and more.
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The platform serves as a licensed insurance carrier for MGAs, offering admitted and non-admitted (E&S) paper together with access to capital, regulatory licenses, and reinsurance across multiple lines of business spanning homeowners, renters, commercial multi-peril, casualty, and other lines—empowering partner growth and protecting policyholders.
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First Connect’s Carrier Store helps agents discover additional carriers and insurance providers and products that can be bundled to increase sales. First Connect also benefits participating carriers by helping to quickly build their network of independent agents based on geographic needs and desired risk profile. On October 29, 2024, we sold our First Connect business.
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Hippo focuses on balanced, diversified growth by combining stable fee income from its carrier platform with selective risk retention across personal and commercial lines—participating in the underwriting results of high-performing MGA programs. This approach creates a resilient premium base and positions Hippo to capture opportunities in both established and emerging insurance segments.
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Refer to Note 19 of the accompanying consolidated financial statements for additional information on the sale. Our Economic Model Our Services segment earns fees and/or commission income without assuming underwriting risk or need for reinsurance. Generally, these fees are structured as a percentage of the policy premiums (both new and renewal) that are placed or supported by each business.
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Hippo approaches risk thoughtfully, through disciplined underwriting and advanced financial and catastrophe modeling. The company evaluates and manages the risk associated with every program it supports. Continuous portfolio optimization keeps exposure aligned with Hippo’s risk appetite, ensuring the company remains resilient across market cycles.
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Occasionally we also benefit from bonus commissions that are a function of the writing carriers’ loss ratio on the policies we sell. Insurance-as-a-Service Insurance-as-a-Service is managed through the Company’s subsidiary Spinnaker Insurance Company and its subsidiaries (“Spinnaker”). Our Insurance-as-a-Service business is predominantly focused on providing insurance capacity to MGAs.
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Lines of Business Hippo operates and reports its underwriting business on a gross written, net written, and net earned premium basis across five main lines of business: Homeowners’, Renters, Casualty, Commercial Multi-Peril (“CMP”), and Other. These lines of business may change as the business grows and evolves.
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Spinnaker partners with MGAs across multiple lines of business, offering both Admitted and Excess and Surplus Lines (“E&S”) capacity. Spinnaker cedes most of the underwriting risk to a diversified panel of highly rated reinsurance companies. This specific type of transaction structuring in the insurance industry is commonly referred to as “fronting”.
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Homeowners Our reported Homeowners line of business is a combination of policies written by our owned program and polices written by third-party program partners. We manage our homeowners’ business and exposure on an aggregate basis to most efficiently deploy capital and utilize reinsurance capacity.
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Spinnaker entered the market in 2015 and was acquired by Hippo in 2020. Spinnaker’s strategy is built on its underwriting first approach paired with its risk participation in programs alongside reinsurance markets. This strategy aligns Spinnaker’s interests with those of the reinsurers and MGAs, prioritizing underwriting profitability 6 over volume.
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The sector remains characterized by legacy inefficiencies, including outdated risk assessment models, fragmented distribution, and reactive service models. Our owned program is the Company’s Hippo-branded homeowners insurance business.
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Since Spinnaker’s entry into the market, the number of fronting carriers participating in underwriting risk, now referred to as participatory fronts, has increased to over 20. The fronting company index, as reported by Dowling Partners, has increased from $1.8 billion of Gross Written Premium in 2015 to $11.2 billion in 2022, growing 41% year-over-year.
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The result creates an opportunity for a win-win. Renters The Renters line is a short-tail personal lines coverage typically providing protection for personal property and contents of rented residences. This line of business is underwritten by a third-party program administrator and is Hippo’s longest active program. Casualty Casualty consists of liability insurance products with short to medium tail loss characteristics.
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This growth has been fueled by the significant increase in the number of MGAs throughout this period. Our Economic Model Spinnaker’s risk appetite is primarily focused on short-tail lines of business. Programs are generally reinsured utilizing program specific quota share reinsurance with excess of loss (“XOL”) complementing the programmatic structure.
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Coverage responds to claims for bodily injury, property damage, and related defense costs. Business is written through delegated authority arrangements with program administrators and MGAs. Loss development extends over multiple periods, requiring structured limits, defined attachment points, and reinsurance support to manage capital exposure.
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Reinsurance structures are designed to provide Spinnaker protection from both low return period frequency events and large tail events up to the 1:250-year return period. Spinnaker includes provisions in its program agreements that allow it to non-renew business if the programs it supports are unable to secure satisfactory reinsurance.
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Primary sub-lines include: General liability, Commercial auto liability, and Excess and umbrella liability Commercial Multi-Peril (“CMP”) Commercial Multi-Peril includes commercial property and packaged property and liability coverage for small to mid-sized commercial insureds under a single policy. Programs are class specific and distributed through third-party program administrators. Property losses are generally short tail.
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Spinnaker’s economic model generates margin both on a fee basis and on a traditional underwriting (e.g., combined ratio) basis based on the risk it retains. Spinnaker earns investment income on the premiums and commission it retains while waiting to pay claims or settle obligations, commonly referred to as float.
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Liability losses develop over a longer period and are managed through underwriting guidelines and reinsurance arrangements. Primary sub-lines include: Small business owners policies, Habitational commercial packages, and Retail and service industry packages Other Other includes insurance products and programs that are not material on an individual basis.
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Hippo Home Insurance Program The Hippo Home Insurance Program is the Company’s Hippo-branded homeowners insurance business. Our mission is to protect the joy of homeownership. Modern technology provides an opportunity to transform the $133 billion U.S. home insurance industry, enabling advancements and efficiencies across the customer lifecycle.
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These programs are evaluated independently based on underwriting results, loss development, scalability, and capital impact. Premiums from discontinued programs continue to be reported through policy expiration.
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We believe there is significant opportunity in this market, expected to reach nearly $170 billion by 2025 (according to industry data from Standard & Poor’s (“S&P”) Global) for a digital-first, customer-centric company like Hippo.
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Primary sub-lines include: Specialty property programs, Niche personal or commercial products, and Runoff and discontinued programs Strategic Pillars for Profitable Growth Hippo’s roadmap for value creation is defined by three strategic pillars designed to enhance resilience and profitability: 1. Strategic Diversification: The company is actively diversifying its premium base beyond personal lines into commercial multi-peril and casualty lines.
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In 2024, we took steps to lower the volatility of our Hippo Homeowners Insurance Program portfolio, including raising rates on a portion of our renewal business, increasing deductibles for wind and hail perils, and selectively non-renewing policies in certain regions.
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This diversification reduces dependency on catastrophe exposed property risks and leverages Spinnaker’s capabilities to access broader segments of the insurance value chain. 2. Unlocking Market Growth: Hippo capitalizes on secular growth trends in the U.S. property and casualty (“P&C”) market by deploying a differentiated, technology-forward customer experience.
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Our Economic Model Hippo Home Insurance Program’s main source of revenue is the premiums paid to us by our homeowner customers. In addition, the revenues include commissions for premiums we cede to third parties, policy and service fees and investment income. Our strategy is to retain underwriting risk where we believe our loss prevention strategies are the most effective.
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A key component of this pillar is strategic partnerships which expands our reach into attractive markets, as evidenced with The Baldwin Group (“BWIN”), a partnership which both triples Hippo's access in the desirable New Homes channel and other niche commercial markets. 3.
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This allows for multiple large and growing players to coexist with differentiated products and approaches. Hippo’s distinctive customer experience, vertical focus on complete home protection, and purpose-built, full stack technology infrastructure differentiate our model from our larger and smaller competitors alike.
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Optimized Risk Management: We are leveraging our diversified portfolio and deep risk management capabilities to continuously optimize performance across market cycles. This includes utilizing our multi-line portfolio to intelligently modulate risk participation. By adjusting pricing, coverage, and retention levels in response to market conditions, Hippo seeks to maximize ROE while minimizing volatility.
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Though incumbents collect vast amounts of data, we believe their legacy systems are not as flexible and dynamic as our integrated technology. Our full stack system allows us to better implement data into our business model and realize the benefits in underwriting, claims, and profitability.
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However, the P&C market is fragmented, with just one carrier having over 10% market share according to S&P Capital IQ. This allows for multiple large and growing players to coexist with differentiated products and approaches. Competitive Strengths Hippo’s competitive position is fortified by a combination of proprietary technology, deep industry expertise, and a unique go-to-market approach.
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This system also enables us to deploy Hippo’s proprietary quoting and underwriting engine (via API) across Hippo’s diversified distribution channels and partners to gain market share.
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Proprietary Technology and Data Advantage: Hippo’s full-stack technology infrastructure and proprietary underwriting engine enable real-time risk assessment and pricing precision that legacy systems cannot match. The platform’s ability to integrate third-party data via APIs allows for granular risk selection, supporting the company's "Science of Risk" philosophy.
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We believe our strategy to deliver the first all-in home protection platform is unique and differentiated and that our competitive advantages across technology and distribution will make it difficult for competitors — old or new — to emulate our approach.
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This technological edge facilitates an "active partnership" with customers, focusing on proactive loss prevention rather than solely reactive claims payment. Deep Industry Expertise: The company has assembled a leadership team with extensive experience from top tier incumbent carriers. This depth of talent combines traditional insurance discipline with modern technological capabilities, creating a "right to win" in complex underwriting environments.
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Data Privacy and Protection Laws Since we receive, use, transmit, disclose and store personal data, we are subject to numerous state and federal laws and regulations that address privacy, data protection and the collection, storing, sharing, use, transfer, disclosure and protection of certain types of data.
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Differentiated Go-to-Market Strategy: Hippo employs an omni-channel distribution strategy that meets customers where they are, whether through direct-to-consumer channels, independent agents, or embedded partnerships. The acquisition of the Spinnaker platform has further differentiated Hippo by enabling it to serve as a capacity provider for other high-performing MGAs, creating a network effect of data and distribution reach.
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The CCPA excludes information covered by the Gramm-Leach-Bliley Act, the Driver’s Privacy Protection Act, the Fair Credit Reporting Act, and the California Financial Information Privacy Act from the CCPA’s scope, but the CCPA’s definition of “personal information” is broad and may encompass other information that we maintain.
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As illustrated in the company's growth drivers, this strategy supports organic growth from existing programs while layering in new hybrid fronting programs and scaling the New Homes channel. • We protect what matters most in a rapidly changing world through deep home expertise, and a promise to put customers first. • Disciplined underwriting standards guide program selection. • Advanced financial and catastrophe modeling provides a data-driven view of exposure and informs precise risk participation decisions. • Continuous portfolio optimization measures performance and keeps exposure within Hippo’s well-defined risk appetite. • Active adjustment of pricing and coverage helps maintain resilience as market conditions and risk factors evolve.
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States with recently enacted and currently effective data privacy laws include Colorado, Connecticut, Delaware, Iowa, Montana, Nebraska, Nevada, New Hampshire, New Jersey, Oregon, Texas, Utah, and Virginia; new data privacy laws will become effective during 2025 in Maryland, Minnesota, and Tennessee; and Indiana, Kentucky, and Rhode Island have all passed data privacy laws that will become effective in 2026.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf, for any reason, the NYSE should delist our securities from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the following may occur, each of which could materially adversely affect our stockholders: • the liquidity of our securities; • the market price of our securities; • our ability to obtain financing; • the number of institutional and other investors that will consider investing in our securities; • the number of market makers in our securities; • the availability of information concerning the trading prices and volume of our securities; and • the number of broker-dealers willing to execute trades in shares of our securities. 45 On July 19, 2022, we received a notice from the NYSE that the Company was not in compliance with the NYSE continued listing standard set forth in Section 802.01C of the NYSE Listed Company Manual, as the average closing price of the Company’s common stock was less than $1.00 per share over a consecutive 30-trading day period.
Biggest changeIf, for any reason, the NYSE should delist our securities from trading on its exchange and we are unable to obtain listing on another reputable national securities exchange, a reduction in some or all of the following may occur, each of which could materially adversely affect our stockholders: 46 Table of Contents • the liquidity of our securities; • the market price of our securities; • our ability to obtain financing; • the number of institutional and other investors that will consider investing in our securities; • the number of market makers in our securities; • the availability of information concerning the trading prices and volume of our securities; and • the number of broker-dealers willing to execute trades in shares of our securities.
We receive data from external data sources and also utilize the data that we gather through our interactions with our customers, as evaluated and curated by our proprietary technology. Establishing adequate premium rates is necessary, together with investment income, if any, to generate sufficient revenue to offset losses, loss adjustment expenses (“LAE”), acquisition expenses, and other costs.
We receive data from external data sources and also utilize the data that we gather through our interactions with our customers, as evaluated and curated by our proprietary technology. Establishing adequate premium rates is necessary, together with investment income, if any, to generate sufficient revenue to offset losses and loss adjustment expenses (“LAE”), acquisition expenses, and other costs.
In the ordinary course of business, we collect, store, and transmit information, including personal information, in relation to our current, past, or potential customers, business partners, agents, staff, and contractors.
In the ordinary course of business, we collect, store, and transmit information, including personal information, in relation to our current, past, or potential customers, business partners, agents, staff, and contractors.
There are many factors that could negatively affect our ability to grow our customer base, including if: • we fail to effectively use search engines, social media platforms, content-based online advertising, and other online sources for generating traffic to our website; • potential customers in a particular marketplace or more generally do not meet our underwriting guidelines; • our products are not competitive in terms of customer experience, pricing, or insurance coverage options; • our competitors mimic our digital platform or develop other innovative services, causing current and potential customers to purchase their insurance products instead of our products; 13 • we lose customers to new market entrants and/or existing competitors; • we do not obtain regulatory approvals necessary for expansion into new markets or in relation to our products (such as line, form, underwriting, and rating approvals) or such approvals contain conditions that impose restrictions on our operations (such as limitations on growth); • our digital platform experiences disruptions; • we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate; • we fail to expand geographically; • we fail to offer new and competitive products, to provide effective updates to our existing products or to keep pace with technological improvements in our industry; • we are unable to maintain traditional retail agent relationships; • customers have difficulty installing, updating or otherwise accessing our website or software application on mobile devices or web browsers as a result of actions by us or third parties; • customers are unable or unwilling to adopt or embrace new technology; • technical or other problems frustrate the customer experience, particularly if those problems prevent us from generating quotes or paying claims in a fast and reliable manner; or • we are unable to address customer concerns regarding content, data privacy, and security generally or for our digital platform specifically.
There are many factors that could negatively affect our ability to grow our customer base, including if: • we fail to effectively use search engines, social media platforms, content-based online advertising, and other online sources for generating traffic to our website; • potential customers in a particular marketplace or more generally do not meet our underwriting guidelines; • our products are not competitive in terms of customer experience, pricing, or insurance coverage options; • our competitors mimic our digital platform or develop other innovative services, causing current and potential customers to purchase their insurance products instead of our products; • we lose customers to new market entrants and/or existing competitors; • we do not obtain regulatory approvals necessary for expansion into new markets or in relation to our products (such as line, form, underwriting, and rating approvals) or such approvals contain conditions that impose restrictions on our operations (such as limitations on growth); • our digital platform experiences disruptions; • we suffer reputational harm to our brand resulting from negative publicity, whether accurate or inaccurate; • we fail to expand geographically; • we fail to offer new and competitive products, to provide effective updates to our existing products or to keep pace with technological improvements in our industry; • we are unable to maintain traditional retail agent relationships; • customers have difficulty installing, updating or otherwise accessing our website or software application on mobile devices or web browsers as a result of actions by us or third parties; • customers are unable or unwilling to adopt or embrace new technology; • technical or other problems frustrate the customer experience, particularly if those problems prevent us from generating quotes or paying claims in a fast and reliable manner; or • we are unable to address customer concerns regarding content, data privacy, and security generally or for our digital platform specifically.
Acquisitions and investments involve numerous risks, any of which could harm our business and negatively affect our financial condition and results of operations, including: • intense competition for suitable acquisition targets, which could increase prices and adversely affect our ability to consummate deals on favorable or acceptable terms; 33 • failure or material delay in closing a transaction, including as a result of regulatory review and approvals; • inadequacy of reserves for losses and loss expenses; • quality of their data and underwriting processes; • conditions imposed by regulatory agencies that make the realization of cost-savings through integration of operations more difficult; • difficulties in obtaining regulatory approvals on our ability to be an acquirer; • a need for additional capital that was not anticipated at the time of the acquisition; • transaction-related lawsuits or claims; • difficulties in integrating the technologies, operations, existing contracts, and personnel of an acquired company; • difficulties in retaining key employees or business partners of an acquired company; • diversion of financial and management resources from existing operations or alternative acquisition opportunities; • failure to realize the anticipated benefits or synergies of a transaction; • failure to identify the problems, liabilities, or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, litigation, accounting practices, or employee or user issues; • risks that regulatory bodies may enact new laws or promulgate new regulations that are adverse to an acquired company or business; • theft misappropriation, or unauthorized public dissemination or disclosure of our trade secrets or confidential information that we share with potential acquisition candidates; • risk that an acquired company or investment in new offerings cannibalizes a portion of our existing business; • adverse market reaction to an acquisition; • significant attention from management and disruption to our business; and • potential dilution in value to our stockholders.
Acquisitions and investments involve numerous risks, any of which could harm our business and negatively affect our financial condition and results of operations, including: • intense competition for suitable acquisition targets, which could increase prices and adversely affect our ability to consummate deals on favorable or acceptable terms; • failure or material delay in closing a transaction, including as a result of regulatory review and approvals; • inadequacy of reserves for losses and loss expenses; • quality of their data and underwriting processes; • conditions imposed by regulatory agencies that make the realization of cost-savings through integration of operations more difficult; • difficulties in obtaining regulatory approvals on our ability to be an acquirer; • a need for additional capital that was not anticipated at the time of the acquisition; • transaction-related lawsuits or claims; • difficulties in integrating the technologies, operations, existing contracts, and personnel of an acquired company; • difficulties in retaining key employees or business partners of an acquired company; • diversion of financial and management resources from existing operations or alternative acquisition opportunities; • failure to realize the anticipated benefits or synergies of a transaction; • failure to identify the problems, liabilities, or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, regulatory compliance practices, litigation, accounting practices, or employee or user issues; • risks that regulatory bodies may enact new laws or promulgate new regulations that are adverse to an acquired company or business; • theft misappropriation, or unauthorized public dissemination or disclosure of our trade secrets or confidential information that we share with potential acquisition candidates; • risk that an acquired company or investment in new offerings cannibalizes a portion of our existing business; • adverse market reaction to an acquisition; • significant attention from management and disruption to our business; and • potential dilution in value to our stockholders.
Our Certificate of Incorporation states that we shall not engage in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless: 47 • the business combination or transaction which resulted in the stockholder becoming an interested stockholder was approved by the board of directors prior to the time that the stockholder became an interested stockholder; • upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or • at or subsequent to the time the stockholder became an interested stockholder, the business combination was approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
Our Certificate of Incorporation states that we shall not engage in a “business combination” with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless: • the business combination or transaction which resulted in the stockholder becoming an interested stockholder was approved by the board of directors prior to the time that the stockholder became an interested stockholder; • upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding shares owned by directors who are also officers of the corporation and shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or • at or subsequent to the time the stockholder became an interested stockholder, the business combination was approved by the board of directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
Like all information systems and technology, our website may contain material errors, failures, vulnerabilities, or bugs, particularly when new features or capabilities are released, and it may be subject to computer viruses or malicious code, break-ins, phishing impersonation attacks, attempts to overload our servers with denial-of-service or other attacks, ransomware and similar incidents, or disruptions from unauthorized use of our computer systems, as well as unintentional incidents causing data leakage, any of which could lead to interruptions, delays, or website shutdowns, or could cause loss of critical data, or the unauthorized disclosure, access, acquisition, alteration, or use of personal 23 or other confidential information, and malicious code embedded in open-source software, or misconfigurations, “bugs” or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT systems, products or services.
Like all information systems and technology, our website may contain material errors, failures, vulnerabilities, or bugs, particularly when new features or capabilities are released, and it may be subject to computer viruses or malicious code, break-ins, phishing impersonation attacks, attempts to overload our servers with denial-of-service or other attacks, ransomware and similar incidents, or disruptions from unauthorized use of our computer systems, as well as unintentional incidents causing data leakage, any of which could lead to interruptions, delays, or website shutdowns, or could cause loss of critical data, or the unauthorized disclosure, access, acquisition, alteration, or use of personal or other confidential information, and malicious code embedded in open-source software, or misconfigurations, “bugs” or other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT systems, products or services.
One of the major changes is a requirement that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an “enterprise 40 risk report” that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole.
One of the major changes is a requirement that an insurance holding company system’s ultimate controlling person submit annually to its lead state insurance regulator an “enterprise risk report” that identifies activities, circumstances or events involving one or more affiliates of an insurer that, if not remedied properly, are likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole.
The following factors, in addition to other factors described in this “Risk Factors” section, may have a significant impact on the market price of our common stock: • the occurrence of severe weather conditions and other catastrophes; • our operating and financial performance and quarterly or annual earnings relative to similar companies; • publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations, or withdrawal of research coverage by securities analysts; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • announcements by us or our competitors of acquisitions, business plans or commercial relationships; • any major change in our board of directors or senior management, including the departure of our CEO; • sales of our common stock by us, our directors, executive officers, or our principal shareholders; • adverse market reaction to any indebtedness we may incur or securities we may issue in the future; • short sales, hedging and other derivative transactions in our common stock; • exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance-linked investments; • our creditworthiness, financial condition, performance, and prospects; • changes in the fair values of our financial instruments; • our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time; • perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; • regulatory or legal developments; • changes in general market, economic, and political conditions; • conditions or trends in our industry, geographies, or customers; • changes in accounting standards, policies, guidance, interpretations or principles; and • threatened or actual litigation or government investigations.
The following factors, in addition to other factors described in this “Risk Factors” section, may have a significant impact on the market price of our common stock: • the occurrence of severe weather conditions and other catastrophes; • our operating and financial performance and quarterly or annual earnings relative to similar companies; • publication of research reports or news stories about us, our competitors or our industry, or positive or negative recommendations, or withdrawal of research coverage by securities analysts; • the public’s reaction to our press releases, our other public announcements and our filings with the SEC; • announcements by us or our competitors of acquisitions, business plans or commercial relationships; • any major change in our board of directors or senior management, including the departure of our CEO; • sales of our common stock by us, our directors, executive officers, or our principal shareholders; • adverse market reaction to any indebtedness we may incur or securities we may issue in the future; • short sales, hedging and other derivative transactions in our common stock; • exposure to capital market risks related to changes in interest rates, realized investment losses, credit spreads, equity prices, foreign exchange rates and performance of insurance-linked investments; • our creditworthiness, financial condition, performance, and prospects; • changes in the fair values of our financial instruments; • our dividend policy and whether dividends on our common stock have been, and are likely to be, declared and paid from time to time; • perceptions of the investment opportunity associated with our common stock relative to other investment alternatives; 47 Table of Contents • regulatory or legal developments; • changes in general market, economic, and political conditions; • conditions or trends in our industry, geographies, or customers; • changes in accounting standards, policies, guidance, interpretations or principles; and • threatened or actual litigation or government investigations.
In the U.S., the federal Gramm-Leach-Bliley Act and certain federal and state laws and regulations specifically aimed at insurance companies require providers of insurance products to consumers to implement certain measures, including requirements to disclose their privacy practices to consumers, allow consumers to opt-in 20 or opt-out, depending on the state, of the sharing of certain personal information with unaffiliated third parties, and maintain certain security controls to protect their information.
In the U.S., the federal Gramm-Leach-Bliley Act and certain federal and state laws and regulations specifically aimed at insurance companies require providers of insurance products to consumers to implement certain measures, including requirements to disclose their privacy practices to consumers, allow consumers to opt-in or opt-out, depending on the state, of the sharing of certain personal information with unaffiliated third parties, and maintain certain security controls to protect their information.
For example, 21 the proposed Designing Accounting Safeguards to Help Broaden Oversight and Regulations on Data (“DASHBOARD”) Act would mandate annual disclosure to the SEC of the type and “aggregate value” of user data used by harvesting companies, such as, but not limited to, Facebook, Google and Amazon, including how revenue is generated by user data and what measures are taken to protect the data.
For example, the proposed Designing Accounting Safeguards to Help Broaden Oversight and Regulations on Data (“DASHBOARD”) Act would mandate annual disclosure to the SEC of the type and “aggregate value” of user data used by harvesting companies, such as, but not limited to, Facebook, Google and Amazon, including how revenue is generated by user data and what measures are taken to protect the data.
If third parties copy our technology and use our proprietary brand, content, and information to create or enhance competing solutions and services, the value of our brand and other intangible assets may be diminished, competitors may be able to more effectively mimic our service and methods of operations, the perception of our business and service to customers and potential customers may become confused, and our ability to attract customers may be adversely 28 affected.
If third parties copy our technology and use our proprietary brand, content, and information to create or enhance competing solutions and services, the value of our brand and other intangible assets may be diminished, competitors may be able to more effectively mimic our service and methods of operations, the perception of our business and service to customers and potential customers may become confused, and our ability to attract customers may be adversely affected.
External factors are also considered, such as court decisions, changes in law, and litigation imposing unintended coverage. We also consider benefits, such as disallowing the use of benefit payment schedules, requiring coverage designed to cover losses that occur in a single policy period to losses that develop continuously over multiple policy 37 periods, or requiring the availability of multiple limits.
External factors are also considered, such as court decisions, changes in law, and litigation imposing unintended coverage. We also consider benefits, such as disallowing the use of benefit payment schedules, requiring coverage designed to cover losses that occur in a single policy period to losses that develop continuously over multiple policy periods, or requiring the availability of multiple limits.
Other states have also passed AI-focused legislation, such as Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI Systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, which establishes disclosure requirements and accountability measures for the use of generative AI in certain consumer interactions.
Other states have also passed AI-focused legislation, such as Colorado’s Artificial Intelligence Act, which will require developers and deployers of “high-risk” AI Systems to implement certain safeguards against algorithmic discrimination, and Utah’s Artificial Intelligence Policy Act, as amended establishes disclosure requirements and accountability measures for the use of generative AI in “high-risk” consumer interactions.
If our data analytics do not function reliably, we may incorrectly price insurance products for our customers or incorrectly pay or deny claims made by our customers. Either of these situations could result in customer dissatisfaction with us, which could cause customers to cancel their insurance policies with us, prevent prospective customers from obtaining new insurance policies.
If our data analytics do not function reliably, we may incorrectly price insurance products for our customers or incorrectly pay or deny claims made by our customers. Either of these situations could result in customer dissatisfaction with us, which could cause customers to cancel their insurance policies with us and prevent prospective customers from obtaining new insurance policies.
Interruptions or delays in the services provided by third-party technology platforms and/or our internet service providers could impair the operability of our website and may cause our business to suffer. 22 We currently rely on multiple providers of cloud infrastructure services, including Google Cloud Platform, Amazon Web Services, Salesforce, and others (collectively, “Cloud Platforms”).
Interruptions or delays in the services provided by third-party technology platforms and/or our internet service providers could impair the operability of our website and may cause our business to suffer. We currently rely on multiple providers of cloud infrastructure services, including Google Cloud Platform, Amazon Web Services, Salesforce, and others (collectively, “Cloud Platforms”).
Regulators also have the ability to issue cease-and-desist orders and take other civil actions to address compliance. 39 Our ability to retain state licenses depends on our ability to meet licensing requirements enacted or promulgated in each state (sometimes based on model laws and regulations developed by the NAIC), subject to significant variations across states.
Regulators also have the ability to issue cease-and-desist orders and take other civil actions to address compliance. Our ability to retain state licenses depends on our ability to meet licensing requirements enacted or promulgated in each state (sometimes based on model laws and regulations developed by the NAIC), subject to significant variations across states.
We could also become subject to investigations by the SEC, the stock exchange on which our securities are listed or other regulatory authorities, which could require 50 additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate, and we could face restricted access to capital markets.
We could also become subject to investigations by the SEC, the stock exchange on which our securities are listed or other regulatory authorities, which could require additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate, and we could face restricted access to capital markets.
The COVID-19 24 pandemic increased cybersecurity risk as a result of global remote working arrangements that are likely to continue and which present opportunities for threat actors to engage in social engineering (for example, phishing) and to exploit vulnerabilities in non-corporate networks. In addition, according to U.S.
The COVID-19 pandemic increased cybersecurity risk as a result of global remote working arrangements that are likely to continue and which present opportunities for threat actors to engage in social engineering (for example, phishing) and to exploit vulnerabilities in non-corporate networks. In addition, according to U.S.
We may also face particular privacy, data security, and data protection risks in connection with requirements of the European Union’s (“E.U.”) General Data Protection Regulation 2016/679 (“GDPR”), the United Kingdom (“UK”) GDPR and UK Data Protection Act 2018 (which retains the GDPR in UK national law) and other 26 data protection regulations in the E.U. and UK.
We may also face particular privacy, data security, and data protection risks in connection with requirements of the European Union’s (“E.U.”) General Data Protection Regulation 2016/679 (“GDPR”), the United Kingdom (“UK”) GDPR and UK Data Protection Act 2018 (which retains the GDPR in UK national law) and other data protection regulations in the E.U. and UK.
Our success is dependent in part on protecting our intellectual property rights and technology, including any source code, proprietary information, data, processes and other forms of information, know how, and 27 technology. We rely on a combination of patents, trademarks, service marks, and trade secret laws to establish and protect our intellectual property.
Our success is dependent in part on protecting our intellectual property rights and technology, including any source code, proprietary information, data, processes and other forms of information, know how, and technology. We rely on a combination of patents, trademarks, service marks, and trade secret laws to establish and protect our intellectual property.
If we are unable to attract the requisite personnel, our business and prospects may be adversely affected. Each of our CEO, key executive officers, specialized insurance experts, key technical personnel, and other employees could terminate his or her relationship 29 with us at any time.
If we are unable to attract the requisite personnel, our business and prospects may be adversely affected. Each of our CEO, key executive officers, specialized insurance experts, key technical personnel, and other employees could terminate his or her relationship with us at any time.
Additionally, anticipated customer demand for a product we are developing could decrease after the development cycle has commenced. Such decreased customer demand may cause us to fall short of our sales targets, and we may 31 nonetheless be unable to avoid substantial costs associated with the product’s development.
Additionally, anticipated customer demand for a product we are developing could decrease after the development cycle has commenced. Such decreased customer demand may cause us to fall short of our sales targets, and we may nonetheless be unable to avoid substantial costs associated with the product’s development.
These provisions include: • our board of directors is classified into three classes of directors with staggered three-year terms, and directors are only able to be removed from office for cause; • nothing in our Certificate of Incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock; • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • our stockholders are only able to take action at a meeting of stockholders and not by written consent; • only our chairman of the board of directors, our chief executive officer, our president, or a majority of the board of directors are authorized to call a special meeting of stockholders; • no provision in our Certificate of Incorporation or Bylaws provides for cumulative voting, which limits the ability of minority stockholders to elect director candidates; • certain amendments to our Certificate of Incorporation require the approval of two-thirds of the then outstanding voting power of our capital stock; • our Bylaws provide that the affirmative vote of two-thirds of the then-outstanding voting power of our capital stock, voting as a single class, is required for stockholders to amend or adopt any provision of our Bylaws; • our Certificate of Incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of our capital stock; and • certain litigation against us can only be brought in Delaware.
These provisions include: • our board of directors is classified into three classes of directors with staggered three-year terms, and directors are only able to be removed from office for cause; • nothing in our Certificate of Incorporation precludes future issuances without stockholder approval of the authorized but unissued shares of our common stock; • advance notice procedures apply for stockholders to nominate candidates for election as directors or to bring matters before an annual meeting of stockholders; • our stockholders are only able to take action at a meeting of stockholders and not by written consent; • only our chairman of the board of directors, our chief executive officer, our president, or a majority of the board of directors are authorized to call a special meeting of stockholders; • no provision in our Certificate of Incorporation or Bylaws provides for cumulative voting, which limits the ability of minority stockholders to elect director candidates; • certain amendments to our Certificate of Incorporation require the approval of two-thirds of the then outstanding voting power of our capital stock; 48 Table of Contents • our Bylaws provide that the affirmative vote of two-thirds of the then-outstanding voting power of our capital stock, voting as a single class, is required for stockholders to amend or adopt any provision of our Bylaws; • our Certificate of Incorporation authorizes undesignated preferred stock, the terms of which may be established and shares of which may be issued, without the approval of the holders of our capital stock; and • certain litigation against us can only be brought in Delaware.
Several factors have contributed to our historical losses, including volatility in our earnings due to severe weather events. For example, significant catastrophe losses resulting from severe weather in the second quarter of 2023 prompted us to institute a nationwide pause on underwriting new premiums for our HO3 business.
Several factors contributed to our historical losses, including volatility in our earnings due to severe weather events. For example, significant catastrophe losses resulting from severe weather in the second quarter of 2023 prompted us to institute a nationwide pause on underwriting new premiums for our HO3 business.
Any failure to pay claims accurately or timely could also lead to regulatory and administrative actions or material litigation, lead to loss or reduction in reinsurance recoveries, or result in damage to 14 our reputation, any one of which could materially and adversely affect our business, financial condition, results of operations, and prospects.
Any failure to pay claims accurately or timely could also lead to regulatory and administrative actions or material litigation, lead to loss or reduction in reinsurance recoveries, or result in damage to our reputation, any one of which could materially and adversely affect our business, financial condition, results of operations, and prospects.
To address the potential errors or desired or required changes in our current premium rates, we may be compelled to increase the amount allocated to cover policy claims, increased expenses, or to address other economic factors resulting in an increase in future premium rates or to additionally or alternatively adopt different 18 underwriting standards.
To address the potential errors or desired or required changes in our current premium rates, we may be compelled to increase the amount allocated to cover policy claims, increased expenses, or to address other economic factors resulting in an increase in future premium rates or to additionally or alternatively adopt different underwriting standards.
The payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly more sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may 35 exist in the payment systems.
The payment methods that we offer also subject us to potential fraud and theft by criminals, who are becoming increasingly more sophisticated, seeking to obtain unauthorized access to or exploit weaknesses that may exist in the payment systems.
Moreover, as we expand into new lines of business and offer additional non-insurance home-related products beyond homeowners’ insurance, we could face intense competition from companies that are already established in such markets.
Moreover, as we expand into new lines of business and potentially offer additional non-insurance home-related products beyond homeowners’ insurance, we could face intense competition from companies that are already established in such markets.
Market forces and external factors (such as significant losses from hurricanes, wildfires, severe weather, or terrorist attacks) or an increase in capital 16 requirements, impact the availability of coverage, limits, and pricing of the reinsurance we purchase.
Market forces and external factors (such as significant losses from hurricanes, wildfires, severe weather, or terrorist attacks) or an increase in capital requirements, impact the availability of coverage, limits, and pricing of the reinsurance we purchase.
Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of our AI 19 Systems, or could be rescinded or amended as new administrations take differing approaches to evolving AI Systems.
Additionally, existing laws and regulations may be interpreted in ways that would affect the operation of our AI Systems, or could be rescinded or amended as new administrations take differing approaches to evolving AI Systems.
In addition to increasing costs, a significant volume of 32 customer complaints or litigation could adversely affect our brand and reputation, regardless of whether such allegations are valid or whether we are liable.
In addition to increasing costs, a significant volume of customer complaints or litigation could adversely affect our brand and reputation, regardless of whether such allegations are valid or whether we are liable.
We cannot predict with precision the 25 likelihood, nature, or extent of any necessary remedial actions or financial impact (if any) resulting from such an examination or the associated costs of such remedial actions or regulatory scrutiny.
We cannot predict with precision the likelihood, nature, or extent of any necessary remedial actions or financial impact (if any) resulting from such an examination or the associated costs of such remedial actions or regulatory scrutiny.
In the past, companies that have experienced volatility in the market price of their stock have been subject to securities 46 class action litigation. We may be the target of this type of litigation in the future.
In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future.
We do not currently expect to pay any cash dividends on our common stock for the foreseeable future. Instead, we intend to retain future earnings, if any, for the future operation and expansion of our business.
We do not currently expect to pay any cash dividends on our common stock for the foreseeable future. Instead, we intend to retain future earnings for the future operation and expansion of our business.
We have limited exposure to equities but may in the future increase our portfolio’s allocation to equities. See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosures About Market Risk .” For several years prior to 2022, interest rates were at or near historic lows.
We have limited exposure to equities but may in the future increase our portfolio’s allocation to equities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Disclosures About Market Risk.” For several years prior to 2022, interest rates were at or near historic lows.
Our revenue grew in the year ended December 31, 2024 compared to the year ended December 31, 2023, although our total average number of employees decreased during the same period. This revenue growth, coupled with reduced headcount, has placed and may continue to place significant demands on our management and our operational and financial resources.
Our revenue grew in the year ended December 31, 2025 compared to the year ended December 31, 2024, although our total average number of employees decreased during the same period. This revenue growth, coupled with reduced headcount, has placed and may continue to place significant demands on our management and our operational and financial resources.
Any failure or perceived failure by us to comply with our privacy policies, our data privacy-related obligations to customers or other third parties, or our other data privacy-related legal obligations, may result in governmental or regulatory investigations, enforcement actions, regulatory fines, compliance orders, litigation (including class actions), or public statements against us by consumer advocacy groups or others and could cause customers to lose trust in us, all of which could be costly and have an adverse effect on our business.
Any failure or perceived failure by us to comply with our privacy policies, our data privacy-related obligations to customers or other third parties, or our other data privacy-related legal obligations, may result in governmental or regulatory investigations, enforcement actions, regulatory fines, civil or criminal penalties, compliance orders, litigation (including class actions), or public statements against us by consumer advocacy groups or others and could cause customers to lose trust in us, all of which could be costly and have an adverse effect on our business.
Refer to Note 14, Commitments and Contingencies, Legal Proceedings. Claims by third parties that we infringed their proprietary technology or other intellectual property rights could result in litigation which is expensive to support, and if resolved adversely, could harm our business.
Refer to Note 13, Commitments and Contingencies, Legal Proceedings. Claims by third parties that we infringed their proprietary technology or other intellectual property rights could result in litigation which is expensive to support, and if resolved adversely, could harm our business.
It identifies insurance companies, including property-casualty insurers, that may be inadequately capitalized by looking at certain inherent risks of each insurer’s assets and liabilities and its mix of net written premiums. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including supervision, rehabilitation, or liquidation.
It identifies insurance companies, including property-casualty insurers, that may be inadequately capitalized by looking at certain inherent risks of each insurer’s assets and liabilities and its mix of net written 17 Table of Contents premiums. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action, including supervision, rehabilitation, or liquidation.
These requirements may discourage potential acquisition proposals and may delay, deter, or prevent a change of control of our insurance company subsidiary, including through transactions that some or all of the stockholders might consider to be desirable. 48 Our Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
These requirements may discourage potential acquisition proposals and may delay, deter, or prevent a change of control of our insurance company subsidiary, including through transactions that some or all of the stockholders might consider to be desirable. 49 Table of Contents Our Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.
In non-insurance products, we face competition from large technology companies, such 15 as Alphabet and Amazon, that have significant resources and long-standing relationships with customers across a variety of products.
In non-insurance products, we may face competition from large technology companies, such as Alphabet and Amazon, that have significant resources and long-standing relationships with customers across a variety of products.
At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, or operating.
Our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed, or operating.
If we fail to remain competitive on customer experience, pricing, or insurance coverage options, our ability to grow and retain our business may also be adversely affected. In addition, we may fail to accurately predict or execute risk segmentation of new and renewal customers or potential customers, which could also reduce our profitability.
If we fail to remain competitive on 13 Table of Contents customer experience, pricing, or insurance coverage options, our ability to grow and retain our business may also be adversely affected. In addition, we may fail to accurately predict or execute risk segmentation of new and renewal customers or potential customers, which could also reduce our profitability.
Any such changes at the federal level could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive. U.S. legislation related to the use of AI Systems generally has also been introduced at the federal level and is advancing at the state level.
Any changes at the federal level pertaining to the regulation of AI could require us to expend significant resources to modify our products, services, or operations to ensure compliance or remain competitive. U.S. legislation related to the use of AI Systems generally has also been introduced at the federal level and is advancing at the state level.
If we fail to address the foregoing risks or other problems encountered in connection with past or future acquisitions of businesses, new technologies, services, and other assets and strategic investments, or if we fail to successfully integrate such acquisitions or investments, our business, results of operations, and financial condition could be adversely affected.
If we fail to address the foregoing risks or other problems encountered in connection with past or future acquisitions of businesses, new technologies, services, and other assets and strategic investments, or if we fail to 35 Table of Contents successfully integrate such acquisitions or investments, our business, results of operations, and financial condition could be adversely affected.
Our results could be adversely affected by an increase in our effective tax rate as a result of U.S. and foreign tax law changes or by material differences between our forecasted and actual effective tax rates. We are subject to federal and state income and non-income taxes in the United States.
Our results could be adversely affected by an increase in our effective tax rate as a result of U.S. and foreign tax law changes or by material differences between our forecasted and actual effective tax rates. We are subject to income and non-income taxes in the United States and internationally.
In addition, our efforts to comply with new or existing cybersecurity regulations could impose significant costs on our business, which could materially and adversely affect our business, financial condition or results of operations. Our businesses, results of operations and financial condition could be adversely affected by ongoing international conflicts and related disruptions in the global economy.
In addition, our efforts to comply with new or existing cybersecurity regulations could impose significant costs on our business, which could materially and adversely affect our business, financial condition or results of operations. 42 Table of Contents Our businesses, results of operations and financial condition could be adversely affected by ongoing international conflicts and related disruptions in the global economy.
These variables are affected by both internal and external events that could increase our exposure to losses, including changes in the mix of customers and jurisdictions, changes in actuarial projections, claims handling procedures, inflation, severe weather, climate change, economic and judicial trends, and legislative changes.
These variables are affected 38 Table of Contents by both internal and external events that could increase our exposure to losses, including changes in the mix of customers and jurisdictions, changes in actuarial projections, claims handling procedures, inflation, severe weather, climate change, economic and judicial trends, and legislative changes.
As is typical in the insurance industry, we continually face risks associated with litigation of various types arising in the normal course of our business operations, including disputes relating to insurance claims under our policies, as well as other general commercial and corporate litigation.
As is typical in the insurance industry, we continually face risks associated with litigation of various types arising in the normal course of our business 33 Table of Contents operations, including disputes relating to insurance claims under our policies, as well as other general commercial and corporate litigation.
These restrictions and other regulatory requirements would affect the ability of our insurance company subsidiaries to make dividend payments, and we may not receive dividends in the amounts necessary to meet our obligations. We do not currently expect to pay any cash dividends.
These restrictions and other regulatory requirements would affect the ability of our insurance company subsidiaries to make dividend payments, and we may not receive dividends in the amounts necessary to meet our obligations. 51 Table of Contents We do not currently expect to pay any cash dividends.
If we fail to maintain adequate systems and processes to prevent, monitor, and detect fraud, including employee fraud, agent fraud, fraudulent policy acquisitions, claim vendor fraud, third-party or fraudulent claims activity, or if inadvertent errors occur with such prevention, monitoring, and detection systems due to human or computer error, our business could be materially adversely impacted.
If we fail to maintain adequate systems and processes to prevent, monitor, and detect fraud, including employee fraud, agent fraud, fraudulent policy acquisitions, claim vendor fraud, third-party or fraudulent claims activity, or if inadvertent errors occur with such prevention, monitoring, and detection systems due to human or 26 Table of Contents computer error, our business could be materially adversely impacted.
If a third-party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology, which could require significant time (during which we would be unable to continue to offer our affected offerings), effort, and expense and may ultimately not be successful.
If a third-party does not offer us a license to its intellectual property on reasonable terms, or at all, we may be required to develop alternative, non-infringing technology, which could require significant time (during which we would be unable to continue to offer our affected 34 Table of Contents offerings), effort, and expense and may ultimately not be successful.
Going forward, we intend to evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our development efforts, business plans, operating performance, and the condition of the capital markets at the time we seek financing.
Going forward, we intend to evaluate financing opportunities from time to time, and our ability to obtain financing will depend, among other things, on our 23 Table of Contents development efforts, business plans, operating performance, and the condition of the capital markets at the time we seek financing.
The federal government also may regulate aspects of our businesses, such as the protection of consumer confidential information or the use of consumer insurance (credit) scores to underwrite and assess the risk of customers under the Fair Credit Reporting Act (“FCRA”).
The federal government also may 40 Table of Contents regulate aspects of our businesses, such as the protection of consumer confidential information or the use of consumer insurance (credit) scores to underwrite and assess the risk of customers under the Fair Credit Reporting Act (“FCRA”).
In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also require insurers to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge.
In addition, certain states have enacted laws that require an insurer conducting business in that state to participate in assigned risk plans, reinsurance facilities and joint underwriting associations. Certain states also 41 Table of Contents require insurers to offer coverage to all consumers, often restricting an insurer’s ability to charge the price it might otherwise charge.
It could also trigger claims by affected third parties. Further, even if we do not ourselves experience a cyber-incident, hacking against our competitors or other companies could create the perception among our customers or potential customers that our digital platform is not safe to use.
It could 25 Table of Contents also trigger claims by affected third parties. Further, even if we do not ourselves experience a cyber-incident, hacking against our competitors or other companies could create the perception among our customers or potential customers that our digital platform is not safe to use.
Moreover, if third parties that we work with violate applicable laws or our policies, such violations also may put personal information at risk, which may result in increased regulatory scrutiny and have a material adverse effect on our reputation, business, and operating results.
Moreover, if third parties that we work with violate applicable laws or our policies, such violations 28 Table of Contents also may put personal information at risk, which may result in increased regulatory scrutiny and have a material adverse effect on our reputation, business, and operating results.
Additionally, climate change may cause an impact on the demand, price and availability of homeowners insurance and reinsurance coverages, as well as the value of our investment portfolio. Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our business.
Additionally, climate change may cause an impact on the demand, price and availability of homeowners insurance and reinsurance coverages, as well as the value of our investment portfolio. Due to significant variability associated with future changing climate conditions, we are unable to predict the impact climate change will have on our business. We are subject to extensive insurance industry regulations.
Negative economic factors may also affect our ability to receive the appropriate rate for the risk we insure with our policyholders and may adversely affect the number of policies we can write and our opportunities to underwrite profitable business.
Negative economic factors may also affect our ability to receive the appropriate rate for the risk we insure with our policyholders and may adversely affect the number of 43 Table of Contents policies we can write and our opportunities to underwrite profitable business.
Further, the CCPA allows the California Attorney General to impose civil penalties for violations and provides a private right of action for certain data breaches that result in the loss of personal information. This private right of action has increased the likelihood of, and risks associated with, data breach litigation.
Further, the CCPA allows the regulator to impose civil penalties for violations and provides a private right of action for certain data breaches that result in the loss of personal information. This private right of action has increased the likelihood of, and risks associated with, data breach litigation.
Adverse economic factors, including recession, inflation, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in the frequency of claims and premium defaults, and even the falsification of claims, or a combination of these effects, which, in turn, could affect our growth and ability to achieve profitability.
Adverse economic factors, including recession, inflation, tariffs and trade wars, periods of high unemployment or lower economic activity could result in the sale of fewer policies than expected or an increase in the frequency of claims and premium defaults, and even the falsification of claims, or a combination of these effects, which, in turn, could affect our growth and ability to maintain profitability.
The obligations associated with being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors requires significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.
The obligations associated with being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors require significant attention from our senior management and could divert their attention away from the 52 Table of Contents day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.
Although our reinsurance counterparties are liable to us according to the terms of the reinsurance contracts, we remain primarily liable to our customers as the direct insurer on all risks reinsured.
Although our reinsurance counterparties are liable to us according to the terms of the reinsurance contracts, we remain primarily liable to our 16 Table of Contents customers as the direct insurer on all risks reinsured.
As we seek to expand, we may incur significant operating expenses, although our expansion may not be successful for a variety of reasons, including because of, among other things: • barriers to obtaining the required government approvals, licenses, or other authorizations, including seasoning or other limitations imposed by a state; • failures in identifying and entering into joint ventures with strategic partners or entering into joint ventures that do not produce the desired results; • challenges in, and the cost of, complying with various laws and regulatory standards, including with respect to the insurance business and insurance distribution, capital and outsourcing requirements, data privacy, tax and regulatory restrictions; • competition from incumbents that already own market share, better understand the market, may market and operate more effectively, and may enjoy greater affinity or awareness; and • differing demand dynamics, which may make our product offerings less successful.
As we seek to expand, we may incur significant operating expenses, although our expansion may not be successful for a variety of reasons, including because of, among other things: • barriers to obtaining the required government approvals, licenses, or other authorizations, including seasoning or other limitations imposed by a state; • failures in identifying and entering into joint ventures with strategic partners or entering into joint ventures that do not produce the desired results; • challenges in, and the cost of, complying with various laws and regulatory standards, including with respect to the insurance business and insurance distribution, capital and outsourcing requirements, data privacy, tax and regulatory restrictions; • competition from incumbents that already own market share, better understand the market, may market and operate more effectively, and may enjoy greater affinity or awareness; and • differing demand dynamics, which may make our product offerings less successful. 36 Table of Contents Expansion into new markets would require additional investments by us in both securing regulatory approvals and marketing.
In addition, we may not be able to obtain reinsurance coverage at reasonable rates and in amounts or with coverages adequate to mitigate the risks associated with severe weather conditions and other catastrophes.
In addition, we may not be able to obtain reinsurance coverage at reasonable rates and in amounts 39 Table of Contents or with coverages adequate to mitigate the risks associated with severe weather conditions and other catastrophes.
If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected.
If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting going forward, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected.
In addition, as Spinnaker is domiciled in Illinois, any adverse changes in the regulatory environment affecting property and casualty insurance in Illinois may also expose us to more significant risks.
In addition, as 32 Table of Contents Spinnaker is domiciled in Illinois, any adverse changes in the regulatory environment affecting property and casualty insurance in Illinois may also expose us to more significant risks.
See “Cautionary Note Regarding Forward-Looking Statements.” Risks Related to Our Business We have a history of net losses and we may not achieve or maintain profitability in the future. 12 We have incurred significant net losses on an annual basis since our incorporation in 2015, and we may continue to experience net losses in the future.
See “Cautionary Note Regarding Forward-Looking Statements.” Risks Related to Our Business We have a history of net losses and we may not maintain profitability in the future. Prior to 2025, we incurred significant net losses on an annual basis since our incorporation in 2015, and we may experience net losses in the future.
If we are not able to integrate these new team members or if they do not perform adequately, our business may be harmed. We face significant competition for personnel, particularly in California and Texas, the states where the majority of our employees are located.
Furthermore, several members of our management team were hired relatively recently. If we are not able to integrate these new team members or if they do not perform adequately, our business may be harmed. We face significant competition for personnel, particularly in California and Texas, the states where the majority of our employees are located.
The impact of further escalation of geopolitical tensions related to these conflicts, including increased trade barriers or restrictions on global trade, is unknown and could result in, among other things, heightened cybersecurity threats, protracted or further increased inflation, lower consumer demand, fluctuations in interest and foreign exchange rates and increased volatility in financial markets, any of which could adversely affect our businesses, results of operations and financial condition.
The potential impacts of escalation of geopolitical tensions, including trade barriers or restrictions on global trade, are unknown and could result in, among other things, heightened cybersecurity threats, protracted or further increased inflation, lower consumer demand, fluctuations in interest and foreign exchange rates and increased volatility in financial markets, any of which could adversely affect our businesses, results of operations and financial condition.
California also enacted 17 new laws in 2024 that further regulate use of AI Systems and provide consumers with additional protections around companies’ use of AI Systems, such as requiring companies to disclose certain uses of generative AI.
California has enacted new laws and amendments to such laws that further regulate use of AI Systems and provide consumers with additional protections around companies’ use of AI Systems, such as requiring companies to disclose certain uses of generative AI.
Any failure by our insurance company subsidiaries to meet the applicable risk-based capital or minimum statutory capital requirements or the writings ratio limitations regulators customarily use where we currently or may in the future conduct business could subject us to further examination or corrective action imposed by state regulators, including limitations on our writing of additional business, state supervision or liquidation. 43 Any changes in existing risk-based capital requirements, minimum statutory capital requirements, or customary writings ratios may require us to increase our statutory capital levels, which we may be unable to do.
Any failure by our insurance company subsidiaries to meet the applicable risk-based capital or minimum statutory capital requirements or the writings ratio limitations regulators customarily use where we currently or may in the future conduct business could subject us to further examination or corrective action imposed by state regulators, including limitations on our writing of additional business, state supervision or liquidation.
Certain arrangements with joint development partners may limit our ability to protect, maintain, enforce, or commercialize such intellectual property rights, including requiring agreement with or payment to our joint development partners before protecting, maintaining, licensing, or initiating enforcement of such intellectual property rights, and may allow such joint development partners to register, maintain, enforce, or license such intellectual property rights in a manner that may affect the value of the jointly-owned intellectual property or our ability to compete in the market.
Certain arrangements with joint development partners may limit our ability to protect, maintain, enforce, or commercialize such intellectual property rights, including requiring agreement with or payment to our joint development partners before protecting, maintaining, licensing, or initiating enforcement of such intellectual property rights, and may allow such joint development partners to register, maintain, enforce, or license such intellectual property rights in a manner that may affect the value of the jointly-owned intellectual property or our ability to compete in the market. 29 Table of Contents We have filed, and may continue in the future to file, trademark and patent applications to protect certain of our inventions and intellectual property.
In order to accurately price our policies, we must, among other factors: • collect and properly and accurately analyze a substantial volume of data from our customers; • develop, test, and apply appropriate actuarial projections and rating formulas; • review and evaluate competitive product offerings and pricing dynamics; • closely monitor and timely recognize changes in trends; and • project both frequency and severity of our customers’ losses with reasonable accuracy.
In order to accurately price our policies, we must, among other factors: • collect and properly and accurately analyze a substantial volume of data from our customers; • develop, test, and apply appropriate actuarial projections and rating formulas; • review and evaluate competitive product offerings and pricing dynamics; • closely monitor and timely recognize changes in trends; and • project both frequency and severity of our customers’ losses with reasonable accuracy. 18 Table of Contents There are no assurances that we will have success in implementing our pricing methodology accurately in accordance with our assumptions.
For instance, we may quote certain homeowners higher premiums than our competitors if our pricing model determines that the customer is higher risk even though their higher-risk classification has not resulted in a claim on an individual basis. Such perception of unfairness could negatively impact our brand and reputation.
For instance, we may quote certain homeowners higher premiums than our competitors if our pricing model determines that the customer is higher risk even though their higher-risk classification has not resulted in a claim on an individual basis.
Investors seeking cash dividends in the foreseeable future should not purchase our common stock. 51 The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, and the listing standards of NYSE, may strain our resources, increase our costs, and divert management’s attention, and we may be unable to comply with these requirements in a timely or cost-effective manner.
The requirements of being a public company, including compliance with the reporting requirements of the Exchange Act, the requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, and the listing standards of NYSE, may strain our resources, increase our costs, and divert management’s attention, and we may be unable to comply with these requirements in a timely or cost-effective manner.
We are subject to extensive insurance industry regulations. 38 Currently, Spinnaker is licensed to write limited lines of business in 50 states and the District of Columbia, and Hippo Analytics Inc. is licensed as an insurance agency in 50 states and the District of Columbia.
Currently, Spinnaker is licensed to write limited lines of business in 50 states and the District of Columbia, and Hippo Analytics Inc. is licensed as an insurance agency in 50 states and the District of Columbia.
Rating agencies could downgrade or change the outlook on ratings due to: • changes in the financial profile of one of our insurance companies; • changes in a rating agency’s determination of the amount of capital required to maintain a particular rating; • increases in the perceived risk of our investment portfolio, a reduced confidence in management or our business strategy, or other considerations that may or may not be under our control; or • AM Best evaluation of the financial health of the holding company and its impact on the balance sheet strength of our rated insurance companies. 17 A downgrade in our insurance company subsidiaries’ financial strength ratings could have a material effect on our sales, competitiveness, customer retention, the marketability of our product offerings, liquidity, access to and cost of borrowing, results of operations, and financial condition.
Rating agencies could downgrade or change the outlook on ratings due to: • changes in the financial profile of one of our insurance companies; • changes in a rating agency’s determination of the amount of capital required to maintain a particular rating; • increases in the perceived risk of our investment portfolio, a reduced confidence in management or our business strategy, or other considerations that may or may not be under our control; or • AM Best evaluation of the financial health of the holding company and its impact on the balance sheet strength of our rated insurance companies.
Complaints or negative publicity about our business practices, our marketing and advertising campaigns, our compliance with applicable laws and regulations, the integrity of the data that we provide to consumers or business partners, data privacy and security issues, and other aspects of our business, whether valid or not, could diminish confidence in our brand, which could adversely affect our reputation and business.
We may not be able to build brand awareness, and our efforts at building, maintaining, and enhancing our reputation could fail. 14 Table of Contents Complaints or negative publicity about our business practices, our marketing and advertising campaigns, our compliance with applicable laws and regulations, the integrity of the data that we provide to consumers or business partners, data privacy and security issues, and other aspects of our business, whether valid or not, could diminish confidence in our brand, which could adversely affect our reputation and business.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTal Hornstein, our Chief Information Officer and Chief Information Security Officer (“CISO”), leads our cybersecurity program and oversees teams supporting security functions across the company. Mr. Hornstein holds a CISSP certification from ISC2 and has over 20 years of experience in multiple cybersecurity and technology-related roles.
Biggest changeOur Chief Information Security Officer (“CISO”) has 15 years of experience in technology, engineering and building cybersecurity programs and leads our cybersecurity program, overseeing teams supporting security functions across the company.
We regularly conduct an internal risk assessment to evaluate the effectiveness of the security of our systems and of our processes, identify areas for remediation, and explore opportunities for enhancement, such as cloud and endpoint security enhancements, application programming interface (“API”) security, and contractor access management.
We regularly conduct an internal risk assessment to evaluate the effectiveness of the security of our systems and our processes, identify areas for remediation, and explore opportunities for enhancement, such as cloud and endpoint security enhancements, application programming interface (“API”) security, and contractor access management.
Impact of cybersecurity risks on business strategy, results of operations or financial condition 53 As of the date of this Annual Report, we have not identified any cybersecurity threats materially affecting, or reasonably likely to materially affect, our business strategy, results of operations, or financial situation.
Impact of cybersecurity risks on business strategy, results of operations or financial condition As of the date of this Annual Report, we have not identified any cybersecurity threats materially affecting, or reasonably likely to materially affect, our business strategy, results of operations, or financial situation.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy 52 Cybersecurity risk management is a key component of our overarching risk management strategy. Given the susceptibility of our industry to cyber threats and attacks, we regularly encounter attempted attacks of varying types.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy Cybersecurity risk management is a key component of our overarching risk management strategy. Given the susceptibility of our industry to cyber threats and attacks, we regularly encounter attempted attacks of varying types.
Under this program, we gather information from relevant third parties to assess potential risks associated with their security controls. Cybersecurity Governance Our board of directors oversees our strategic and business risk management, with cybersecurity risk management oversight delegated to the Audit, Risk, and Compliance Committee (the “Committee”).
Under this program, we gather information from relevant third parties to assess potential risks associated with their security controls. 53 Table of Contents Cybersecurity Governance Our board of directors oversees our strategic and business risk management, with cybersecurity risk management oversight delegated to the Audit, Risk, and Compliance Committee (the “Committee”).
We utilize third-party security experts and consultants on an annual basis to assess and improve our cybersecurity risk management tools and processes and to benchmark against industry standards. Additionally, we maintain a privacy risk management program to evaluate risks associated with the collection, usage, sharing, and storage of customer data.
We periodically utilize third-party security experts and consultants to assess and improve our cybersecurity risk management tools and processes and to benchmark them against industry standards. Additionally, we maintain a privacy risk management program to evaluate risks associated with the collection, usage, sharing, and storage of customer data.
He joined Hippo in late 2021 and has been instrumental in designing and executing our entire cybersecurity stack. Our cybersecurity team monitors prevention, detection, mitigation, and remediation of cybersecurity incidents through technical and operational measures, regularly reporting to the CISO.
Our cybersecurity team includes individuals with cybersecurity-related certifications such as CISSP, CISM and MS Cybersecurity Architect and monitors prevention, detection, mitigation, and remediation of cybersecurity incidents through technical and operational measures, regularly reporting to the CISO.
An independent third-party assesses our privacy risk management program, to evaluate efficacy and to benchmark against industry standards. On an annual basis we obtain an independent assessment and evaluation of the operation of our cybersecurity and privacy programs, as well as the supporting control frameworks.
An independent third-party assesses our privacy risk management program, to evaluate efficacy and to benchmark against industry standards. On an annual basis, we engage an independent third-party to perform a SOC 2 Type II examination of certain systems and controls within a defined scope. This examination assesses the design and operating effectiveness of specified controls over a defined review period.
The findings of these independent assessments facilitate our risk-based decision-making, prioritization of cybersecurity countermeasures, and risk mitigation strategies. Our risk mitigation strategies encompass an array of technical and operational measures, complemented by annual cybersecurity and privacy training for all employees. Additionally, we have specific policies and practices governing third-party security risks, including our third-party risk management (“TPRM”) program.
Additionally, we have specific policies and practices governing third-party security risks, including our third-party risk management (“TPRM”) program.
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The results of this assessment are one of several inputs used to inform our risk management processes and ongoing enhancement of our cybersecurity controls. Our risk mitigation efforts include a range of technical and operational safeguards, supplemented by annual cybersecurity and privacy training for employees.
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As a key member of the senior management team, the CISO provides updates to the Committee on the company’s cybersecurity program, including risks, incidents, and mitigation strategies. Our cybersecurity team monitors prevention, detection, mitigation, and remediation of cybersecurity incidents through technical and operational measures, regularly reporting to the CISO.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in Palo Alto, California. We own and occupy an office building in Austin, Texas and also lease facilities under operating leases with various expiration dates in Austin, Texas; Palo Alto, California; Dallas, Texas; Bedminster, New Jersey; and Warsaw, Poland. We believe that our facilities are adequate to meet our current needs.
Biggest changeITEM 2. PROPERTIES We lease our corporate headquarters located in San Jose, California. We own and occupy an office building in Austin, Texas and also lease facilities under operating leases with various expiration dates in Austin, Texas; San Jose, California; Dallas, Texas; Bedminster, New Jersey; and Warsaw, Poland. We believe that our facilities are adequate to meet our current needs.
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ITEM 3. LEGAL PROCEEDINGS See Note 13 to the Consolidated Financial Statements under “Legal Proceedings” for description of legal proceedings affecting the Company. ITEM 4. MINE SAFETY DISCLOSURES Not Applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock trades on the New York Stock Exchange under the symbols “HIPO”. Holders As of February 20, 2025, there were approximately 49 holders of record of the Company’s common stock.
Biggest changeITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock trades on the New York Stock Exchange under the symbol “HIPO”.
Performance Graph The following graph shows a comparison of cumulative total return for our common stock, the Russell 2000 Stock Index (the “Russell 2000 Index”) and the Hudson Structured Capital Management Ltd Public InsurTech Index (the “HSCM Public InsurTech Index”) for the four fiscal years ended December 31, 2024.
Performance Graph The following graph shows a comparison of cumulative total return for our common stock, the Russell 2000 Stock Index (the “Russell 2000 Index”) and the Hudson Structured Capital Management Ltd Public InsurTech Index (the “HSCM Public InsurTech Index”) for the five fiscal years ended December 31, 2025.
The total return 55 graph and table assume that $100 was invested on August 2, 2021, the date of our merger with RTPZ, in each of Hippo Holdings Inc. common stock, the Russell 2000 Index and the HSCM Public InsurTech Index and assume that all dividends are reinvested. Indexes are calculated on a month-end basis.
The total return graph and table assume that $100 was invested on August 2, 2021, the date of our merger with RTPZ, in each of Hippo Holdings Inc. common stock, the Russell 2000 Index and the HSCM Public InsurTech Index and assume that all dividends are reinvested.
Dividends We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future.
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Recent Sales of Unregistered Securities There were no unregistered sales of equity securities in fiscal year 2024. Issuer Purchases of Equity Securities In March 2023, the Company’s board of directors authorized the repurchase of up to $50.0 million of its common stock.
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Holders As of February 24, 2026, there were approximately 37 holders of record of the Company’s common stock, although there is a significantly larger number of beneficial owners of our common stock. 54 Table of Contents Dividends We have never declared or paid any cash dividends on our capital stock.
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The share repurchase program, which does not have a specific expiration date, authorizes repurchases in the open market or in private transactions.
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Recent Sales of Unregistered Securities There were no unregistered sales of equity securities in fiscal year 2025. Issuer Purchases of Equity Securities There were no purchases of our common stock by the Company or any “affiliated purchaser” as defined in Rule 10b-18(a)(3) under the Exchange Act, during the three months ended December 31, 2025.
Removed
The following table sets forth certain information with respect to repurchases of our common stock during the quarter ended December 31, 2024 (in thousands, except per share values): Period Total Number of Shares Purchased (1) Average Price Paid per Share (2) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions, except share and per share data) October 1 through October 31, 2024 957,242 $ 16.28 957,242 November 1 through November 30, 2024 — $ — — December 1 through December 31, 2024 — $ — — Total 957,242 $ 32.6 (1) On October 30, 2024, the Company entered into a Share Repurchase Agreement with an existing unaffiliated shareholder to purchase 957,242 shares of the Company’s common stock at a purchase price of $16.28 per share pursuant to the Company’s share repurchase program (the “Share Repurchase”).
Removed
The Share Repurchase was substantially completed on October 30, 2024. The Company used available cash resources of approximately $15.6 million to complete this transaction. As of December 31, 2024, the Company had $32.6 million remaining under the share repurchase authorization.
Removed
August 2, 2021 December 31, 2021 December 30, 2022 December 29, 2023 December 31, 2024 Hippo Holdings Inc. $ 100.0 $ 28.9 $ 5.6 $ 3.7 $ 10.9 Russell 2000 Index $ 100.0 $ 114.8 $ 91.4 $ 106.8 $ 119.2 HSCM Public InsurTech Index $ 100.0 $ 72.6 $ 24.9 $ 41.9 $ 71.9

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

51 edited+80 added−147 removed28 unchanged
Biggest changeWe expect continued improvement as these actions have more time to impact our financial results. 69 Results of Operations The following table sets forth our consolidated results of operations data for the periods indicated (dollars in millions): Year Ended December 31, Change % Change 2024 2023 2024 vs. 2023 2024 vs. 2023 Revenue: Net earned premium $ 272.5 $ 107.5 $ 165.0 153 % Commission income, net 63.6 63.4 0.2 — % Service and fee income 11.6 15.7 (4.1) (26) % Net investment income 24.4 23.1 1.3 6 % Total revenue 372.1 209.7 162.4 77 % Expenses: Losses and loss adjustment expenses 209.0 181.7 27.3 15 % Insurance related expenses 88.8 79.1 9.7 12 % Technology and development 30.7 47.0 (16.3) (35) % Sales and marketing 51.2 80.1 (28.9) (36) % General and administrative 70.7 79.6 (8.9) (11) % Impairment and restructuring 3.6 5.5 (1.9) (35) % Gain on sale of business (54.4) — (54.4) — % Other income, net (0.1) (0.8) 0.7 (88) % Total expenses 399.5 472.2 (72.7) (15) % Loss before income taxes (27.4) (262.5) 235.1 (90) % Income taxes expense 1.2 0.5 0.7 140 % Net loss (28.6) (263.0) 234.4 (89) % Net income attributable to noncontrolling interests, net of tax 11.9 10.1 1.8 18 % Net loss attributable to Hippo $ (40.5) $ (273.1) $ 232.6 (85) % Other comprehensive income (loss): Change in net unrealized gain on available-for-sale securities, net of tax 0.2 4.1 (3.9) (95) % Comprehensive loss attributable to Hippo $ (40.3) $ (269.0) $ 228.7 (85) % 70 Comparison of the Year Ended December 31, 2024 and 2023 Net Revenue The following table set forth net revenue by segment for the periods presented: Year Ended December 31, $ Change % Change 2024 2023 2024 vs. 2023 Services $ 48.2 $ 44.3 $ 3.9 9 % Insurance-as-a-Service 99.5 70.7 28.8 41 % Hippo Home Insurance Program 236.4 102.1 134.3 132 % Intersegment elimination $ (12.0) $ (7.4) (4.6) 62 % Total net revenue $ 372.1 $ 209.7 $ 162.4 77 % Net Earned Premium For the year ended December 31, 2024, net earned premium was $272.5 million, an increase of $165.0 million compared to $107.5 million for the year ended December 31, 2023.
Biggest changeThe catastrophe bonds issued through Mountain Re Ltd. provide multi-year per occurrence coverage for a range of perils for business written through our MGA. 57 Table of Contents Results of Operations of the Year Ended December 31, 2025, 2024, and 2023 The following table sets forth our consolidated results of operations data for the periods presented: Years Ended December 31, Change % Change 2025 2024 2023 2025 vs. 2024 (in millions) Revenue: Net earned premium $ 380.1 $ 272.5 $ 107.5 $ 107.6 39 % Commission income, net 51.3 63.6 63.4 (12.3) (19) % Service and fee income 11.8 11.6 15.7 0.2 2 % Net investment income 25.4 24.4 23.1 1.0 4 % Total revenue $ 468.6 $ 372.1 $ 209.7 $ 96.5 26 % Expenses: Losses and loss adjustment expenses 229.9 209.0 181.7 20.9 10 % Insurance related expenses 131.3 88.8 79.1 42.5 48 % Technology and development expenses 32.5 30.7 47.0 1.8 6 % Sales and marketing expenses 33.5 51.2 80.1 (17.7) (35) % General and administrative expenses 67.1 70.7 79.6 (3.6) (5) % Impairment and restructuring charges 5.0 3.6 5.5 1.4 39 % Gain on sale of business (95.0) (54.4) — (40.6) 75 % Interest and other expense (income), net 1.0 (0.1) (0.8) 1.1 1100 % Total expenses 405.3 399.5 472.2 5.8 1 % Income (loss) before income taxes 63.3 (27.4) (262.5) 90.7 331 % Income tax expense 0.7 1.2 0.5 (0.5) (42) % Net income (loss) 62.6 (28.6) (263.0) 91.2 319 % Net income attributable to noncontrolling interests, net of tax 4.9 11.9 10.1 (7.0) (59) % Net income (loss) attributable to Hippo $ 57.7 $ (40.5) $ (273.1) $ 98.2 242 % The following discussion describes the material drivers of these changes for the year ended December 31, 2025 compared to 2024 and should be read together with the key operating and financial metrics discussed below.
Ceded Written Premium Ceded written premium is the amount of gross written premium written or assumed by us and our affiliates as a carrier that we cede to reinsurers. We enter into reinsurance contracts to limit our exposure to losses, as well as to provide additional capacity for growth.
Ceded Written Premium Ceded written premium (“CWP”) is the amount of gross written premium written or assumed by us and our affiliates as a carrier that we cede to reinsurers. We enter into reinsurance contracts to limit our exposure to losses, as well as to provide additional capacity for growth.
Critical Accounting Estimates We prepared our consolidated financial statements in accordance with GAAP, which requires the use of estimates and assumptions. Our consolidated financial statements include amounts that, either by their nature or due to requirements of GAAP, are determined using best estimates and assumptions.
Critical Accounting Policies and Estimates We prepared our consolidated financial statements in accordance with GAAP, which requires the use of estimates and assumptions. Our consolidated financial statements include amounts that, either by their nature or due to requirements of GAAP, are determined using best estimates and assumptions.
In addition, IBNR reserves are established by the Company based on reported loss and loss 74 adjustment expenses and estimates of ultimate loss and loss adjustment expenses based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and qualitative factors as appropriate.
In addition, IBNR reserves are established by the Company based on reported loss and loss adjustment expenses and estimates of ultimate loss and loss adjustment expenses based on generally accepted actuarial reserving techniques that consider quantitative loss experience data and qualitative factors as appropriate.
Investing Activities Cash provided by investing activities was $30.3 million for the year ended December 31, 2024, due primarily to the maturities of investment securities and proceeds from the sale of business, partially offset by purchases of investment securities.
Cash provided by investing activities was $30.3 million for the year ended December 31, 2024, due primarily to the maturities of investment securities and proceeds from the sale of a business, partially offset by purchases of investment securities.
The Company’s loss and loss adjustment expense reserves are continually reviewed, and adjustments, if any, are reflected in current operations in the consolidated statements of operations and comprehensive loss in the period in which they become known.
The Company’s loss and loss adjustment expense reserves are continually reviewed, and adjustments, if any, are reflected in current operations in the consolidated statements of operations and comprehensive income (loss) in the period in which they become known.
Significant Assumptions Employed in the Recording of the Loss and Loss Adjustment Expense Reserve The most significant assumptions used in the determination of the recorded reserve for loss and loss adjustment expenses as of December 31, 2024 are historical aggregate claim reporting and payment patterns, which is assumed to be indicative of future loss development and trends.
Significant Assumptions Employed in the Recording of the Loss and Loss Adjustment Expense Reserve The most significant assumptions used in the determination of the recorded reserve for loss and loss adjustment expenses as of December 31, 2025 are historical aggregate claim reporting and payment patterns, which are assumed to be indicative of future loss development and trends.
This includes internal and external loss and claim count emergence patterns, pricing change information, internal and external loss and exposure trend information, as well as underwriting process changes. In addition, we use commercially available risk analysis models, and overall market share assumptions to estimate our loss and loss adjustment expense reserves related to specific loss events.
This includes internal and external loss 70 Table of Contents and claim count emergence patterns, pricing change information, internal and external loss and exposure trend information, as well as underwriting process changes. In addition, we use commercially available risk analysis models, and overall market share assumptions to estimate our loss and loss adjustment expense reserves related to specific loss events.
The volume of our gross written premium in any given period is generally influenced by: • New business submissions; • Binding of new business submissions into policies; 61 • Bound policies going effective; • Renewals of existing policies; and • Average size and premium rate of bound policies.
The volume of our gross written premium in any given period is generally influenced by: 62 Table of Contents • New business submissions; • Binding of new business submissions into policies; • Bound policies going effective; • Renewals of existing policies; and • Average size and premium rate of bound policies.
For additional information refer to Note 17, Income Taxes, to the audited consolidated financial statements.
For additional information refer to Note 16, Income Taxes, to the audited consolidated financial statements. For additional information refer to Note 16, Income Taxes, to the audited consolidated financial statements.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “our,” “Hippo” and “the Company” refer to the business and operations of Hippo Holdings Inc. and its consolidated subsidiaries.
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we,” “our,” “Hippo” and “the Company” refer to Hippo Holdings Inc. and its consolidated subsidiaries.
Ceded written premium is treated as a reduction from gross written premium. The volume of our ceded written premium is impacted by the level of our gross written premium and decisions we make to increase or decrease retention levels.
Ceded written premium is treated as a reduction from gross written premium. The volume of our ceded written premium is impacted by the level of our gross written premium and decisions we make to increase or decrease retention levels. Net Written Premium Net written premium (“NWP”) is calculated as the amount of gross written premium written less ceded written premium.
As of December 31, 2024, we had $232.8 million of cash and restricted cash and $373.3 million of available-for-sale fixed income securities and short-term investments. In addition, we are a member of the Federal Home Loan Bank (“FHLB”) of New York, which provides secured borrowing capacity.
As of December 31, 2025, we had $218.3 million of cash, $31.8 million of restricted cash, and $445.9 million of available-for-sale fixed income securities and short-term investments. In addition, we are a member of the Federal Home Loan Bank (FHLB) of New York, which provides secured borrowing capacity.
Components of Results of Operations Revenue Gross Written Premium Gross written premium is the amount received or to be received for insurance policies written or assumed by us and our affiliates as a carrier or captive reinsurer, without reduction for policy acquisition costs, reinsurance costs, or other deductions.
Growth and mix metrics Gross Written Premium Gross written premium (“GWP”) is the amount received or to be received for insurance policies written or assumed by us and our affiliates as a carrier or captive reinsurer, without reduction for policy acquisition costs, reinsurance costs, or other deductions.
Gain on Sale of Business For the year ended December 31, 2024 we recognized a gain on sale of $8.2 million related to our subsidiary, Mainsail, and a gain on sale of $46.1 million related to our sale of First Connect. There was no gain on sale of business for the year ended December 31, 2023.
For the year ended December 31, 2024, we recognized gains on sale of $46.1 million related to our sale of First Connect, and $8.2 million related to the sale of our subsidiary, Mainsail.
As of December 31, 2024, we have U.S. federal and state NOL carryforwards of $707.5 million and $428.7 million, respectively. We have $166.0 million of Dual Consolidated Losses in a 953(d) company, RH Solutions Insurance (Cayman) Ltd.
As of December 31, 2025, we have U.S. federal and state NOL carryforwards of $718.9 million and $488.8 million, respectively. We have $166.0 million of dual consolidated losses in a 953(d) company, RH Solutions Insurance (Cayman) Ltd.
The provisions of the Tax Cuts and Jobs Act of 2017 eliminated the 20-year carryforward period so that federal NOLs generated in tax years after December 31, 2017 do not expire. For such amounts generated prior to 2018, the 20-year carryforward periods continue to apply. For additional information refer to Note 17, Income Taxes, to the audited consolidated financial statements.
The provisions of the Tax Cuts and Jobs Act of 2017 eliminated the 20-year carryforward period so that federal NOLs generated in tax years after December 31, 2017 do not expire. For such 72 Table of Contents amounts generated prior to 2018, the 20-year carryforward periods continue to apply.
Cash Flow Summary The following table summarizes our cash flows for the periods presented (in millions): Year Ended December 31, Change 2024 2023 2024 vs. 2023 Net cash provided by (used in): Operating activities $ 47.5 $ (92.4) $ 139.9 Investing activities $ 30.3 $ 57.6 $ (27.3) Financing activities $ (40.1) $ (14.6) $ (25.5) Operating Activities Cash provided in operating activities was $47.5 million for the year ended December 31, 2024, an increase of $139.9 million from cash used in operating activities of $92.4 million for the year ended December 31, 2023.
Cash Flows The following table summarizes our cash flows for the periods presented (in millions): Years Ended December 31, 2025 2024 2023 Change (in millions) Net cash provided by (used in): Operating activities $ 9.2 $ 47.5 $ (92.4) $ (38.3) Investing activities $ (11.2) $ 30.3 $ 57.6 $ (41.5) Financing activities $ 19.3 $ (40.1) $ (14.6) $ 59.4 Operating Activities Cash provided by operating activities was $9.2 million for the year ended December 31, 2025, a decrease of $38.3 million, from cash provided by operating activities of $47.5 million for the year ended December 31, 2024.
General and Administrative Expenses For the year ended December 31, 2024, general and administrative expenses were $70.7 million, a decrease of $8.9 million, or 11%, compared to $79.6 million for the year ended December 31, 2023.
General and Administrative Expenses For the year ended December 31, 2025, general and administrative expenses were $67.1 million, a decrease of $3.6 million, or 5%, compared to $70.7 million for the year ended December 31, 2024.
Income Taxes For the year ended December 31, 2024, income tax expense was $1.2 million, an increase of $0.7 million, compared to $0.5 million for the year ended December 31, 2023.
Income Taxes For the year ended December 31, 2025, income tax expense was $0.7 million, a decrease of $0.5 million compared to an expense of $1.2 million for the year ended December 31, 2024. The decrease was due primarily to a reduction in current expense for state income taxes.
Impairment and Restructuring Charges For the year ended December 31, 2024, impairment and restructuring charges were $3.6 million, a decrease of $1.9 million, or 35%, compared to $5.5 million for the year ended December 31, 2023.
Impairment and Restructuring Charges For the year ended December 31, 2025, impairment and restructuring charges were $5.0 million, compared to $3.6 million for the year ended December 31, 2024.
Losses and Loss Adjustment Expenses For the year ended December 31, 2024, loss and loss adjustment expenses were $209.0 million, an increase of $27.3 million, or 15%, compared to $181.7 million for the year ended December 31, 2023.
Loss and Loss Adjustment Expenses For the year ended December 31, 2025, loss and loss adjustment expenses were $229.9 million, an increase of $20.9 million, or 10%, compared to $209.0 million for the year ended December 31, 2024.
Sales and Marketing Expenses For the year ended December 31, 2024, sales and marketing expenses were $51.2 million, a decrease of $28.9 million, or 36%, compared to $80.1 million for the year ended December 31, 2023.
Sales and Marketing Expenses For the year ended December 31, 2025, sales and marketing expenses were $33.5 million, a decrease of $17.7 million, or 35%, compared to $51.2 million for the year ended December 31, 2024.
Net Loss Ratio Net loss ratio expressed as a percentage, is the ratio of the net losses and LAE, to the net earned premium (in millions).
Underwriting performance metrics Net Loss and Loss Adjustment Expense ratios Catastrophe loss ratio, expressed as a percentage, is the ratio of catastrophe losses and LAE to the net earned premium. Non-catastrophe loss ratio, expressed as a percentage, is the ratio of the net non-catastrophe losses and LAE to the net earned premium.
While there can be no assurance that any of the above assumptions as utilized will prove to be correct, we believe that these assumptions represent a realistic and appropriate basis for estimating the reserve for loss and loss adjustment expense reserves. 75 The following table summarizes gross and net reserves for unpaid loss and LAE as of December 31, (in millions): 2024 2023 Gross Net Gross Net Loss and loss adjustment reserves IBNR $ 227.3 $ 75.2 $ 217.2 $ 72.5 Case reserves 122.7 44.9 105.3 28.6 Total reserves $ 350.0 $ 120.1 $ 322.5 $ 101.1 Sensitivity Analysis The table below shows the impact on the loss and loss adjustment expense reserve based on reasonably likely changes to our held unpaid amounts after consideration of our proportional and non-proportional reinsurance as of December 31, 2024 (in millions). 10% increase in ultimate loss and loss adjustment expenses 10% decrease in ultimate loss and loss adjustment expenses Impact on: Loss and loss adjustment expense reserves, net $ 13.2 $ (10.9) For additional information refer to Note 11, Reinsurance, of the audited consolidated financial statements.
The following table summarizes gross and net reserves for unpaid losses and LAE as of December 31, 2025 and 2024: December 31, 2025 2024 Gross Net Gross Net (in millions) Losses and loss adjustment reserves IBNR $ 255.9 $ 76.1 $ 227.3 $ 75.2 Case reserves 164.5 55.3 122.7 44.9 Total reserves $ 420.4 $ 131.4 $ 350.0 $ 120.1 71 Table of Contents Sensitivity Analysis The table below shows the impact on the loss and loss adjustment expense reserve based on reasonably likely changes to our held unpaid amounts after consideration of our proportional and non-proportional reinsurance as of December 31, 2025 (in millions). 10% increase in ultimate loss and loss adjustment expenses 10% decrease in ultimate loss and loss adjustment expenses Impact on: Loss and loss adjustment expense reserves, net $ 14.2 $ (14.4) For additional information refer to Note 9, Losses and Loss Adjustment Expense Reserves of the audited consolidated financial statements.
The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed. 76 We consider a number of factors to reliably estimate future taxable income so we can determine the extent of our ability to realize net operating loss (“NOL”), foreign tax credits, realized capital loss and other carryforwards.
We consider a number of factors to reliably estimate future taxable income so we can determine the extent of our ability to realize net operating loss (“NOL”), R&D tax credits, realized capital loss and other carryforwards.
Other Income, net For the year ended December 31, 2024, other income was $0.1 million, a decrease of $0.7 million compared to $0.8 million for the year ended December 31, 2023.
Net Income Attributable to Noncontrolling Interest, net of tax For the year ended December 31, 2025, net income attributable to noncontrolling interest, net of tax was $4.9 million, a decrease of $7.0 million compared to $11.9 million for the year ended December 31, 2024.
Overview Hippo is an insurance holding company with subsidiaries that provide property and casualty insurance products to both individuals and business customers. We conduct our operations through three reportable segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program. We offer our services primarily in the United States.
Overview Hippo is an insurance holding company with subsidiaries that provide property and casualty insurance products to both individuals and business customers primarily in the United States. We conduct insurance underwriting through our regulated carrier subsidiaries and generate revenue from a combination of insurance underwriting activities and fee- and commission-based services.
Financing Activities Cash used in financing activities was $40.1 million for the year ended December 31, 2024, primarily driven by cash paid for share repurchase, distributions to noncontrolling interests and change in fiduciary liabilities, and taxes paid related to net share settlement of RSUs, partially offset by proceeds from common stock issuances. 73 Cash used in financing activities was $14.6 million for the year ended December 31, 2023, due primarily to distributions to noncontrolling interests, taxes paid related to net share settlement of equity awards, and acquisitions of noncontrolling interests.
Financing Activities Cash provided by financing activities was $19.3 million for the year ended December 31, 2025, primarily driven by proceeds from the surplus note partially offset by share repurchases under our program, taxes paid related to net share settlement of RSUs, distributions to noncontrolling interests, and changes in fiduciary liabilities. 68 Table of Contents Cash used in financing activities was $40.1 million for the year ended December 31, 2024, primarily driven by cash paid for share repurchases, distributions to noncontrolling interests, changes in fiduciary liabilities, and taxes paid related to net share settlement of RSUs.
The increase was due primarily to an increase in yields and diversification. We are mainly invested in money market accounts, securities issued by the U.S. government and agencies, high-grade corporate securities, residential and commercial mortgage-backed securities, and other governmental related securities.
The Company’s investment portfolio is primarily comprised of securities issued by the U.S. government and agencies, money market accounts, high-grade corporate securities, residential and commercial mortgage-backed securities, and other governmental related securities.
For additional information refer to Note 12, Geographical Breakdown of Gross Written Premium, to the audited consolidated financial statements.
For additional information refer to Note 10, Reinsurance, to the audited consolidated financial statements.
The charges for the year ended December 31, 2024 consisted of $3.6 million which primarily related to the impairment of a lease right-of-use asset due to abandonment of leased office space.
The charges in 2024 primarily related to the impairment of a lease right-of-use asset from the abandonment of leased office space. Gain on Sale of Business For the year ended December 31, 2025, we recognized a gain on sale of $95.0 million related to the sale of our homebuilder distribution network.
Cash provided by investing activities was $57.6 million for the year ended December 31, 2023, due primarily to proceeds from the maturities and sales of investments, partially offset by purchases of investments and the purchase of an office building.
Investing Activities Cash used in investing activities was $11.2 million for the year ended December 31, 2025, due primarily to purchases of investment securities, partially offset by maturities of investment securities and the proceeds from the sale of business, net of cash disposed.
The weight given to the evidence is commensurate with the extent to which it can be objectively verified.
The weight given to the evidence is commensurate with the extent to which it can be objectively verified. The more negative evidence that exists, the more positive evidence is necessary and the more difficult it is to support a conclusion that a valuation allowance is not needed.
Material Cash Requirements Our material cash requirements from known contractual and other obligations primarily relate to unpaid loss and loss adjustment expense, purchase commitments, and lease payments.
This was partially offset by proceeds from common stock issuances. Contractual Obligations and Commitments Our material cash requirements from known contractual and other obligations primarily relate to purchase commitments, lease payments, our surplus note, and unpaid loss and loss adjustment expense. The estimation of the unpaid losses and loss adjustment expenses is based on various complex and subjective judgments.
The decrease was due primarily to a decrease in employee-related costs of $13.1 million, including a decrease in stock-based compensation of $6.5 million, driven by a decrease in headcount.
The decrease was primarily driven by lower employee-related costs of $10.2 million, including a decrease in stock-based compensation of $4.4 million, reflecting a decrease in headcount due primarily to the sale of our homebuilder distribution network in the third quarter of 2025 and the sale of First Connect in the fourth quarter of 2024.
The following table provides a reconciliation of net loss attributable to Hippo to adjusted EBITDA for the periods presented (in millions): Years Ended December 31, Change 2024 2023 2024 vs. 2023 Net loss attributable to Hippo $ (40.5) $ (273.1) $ 232.6 Adjustments: Net investment income (24.4) (23.1) (1.3) Depreciation and amortization 23.2 19.8 3.4 Stock-based compensation 38.2 57.5 (19.3) Fair value adjustments 1.7 4.5 (2.8) Other one-off transactions 7.9 7.8 0.1 Income taxes expense 1.2 0.5 0.7 Gain on sale of business (54.4) — (54.4) Impairment and restructuring charges 3.6 5.5 (1.9) Adjusted EBITDA $ (43.5) $ (200.6) $ 157.1 Gross Loss Ratio Gross Loss Ratio, expressed as a percentage, is the ratio of the Gross Losses and LAE to the Gross Earned Premium (in millions).
Adjusted net income (loss) does not reflect the overall profitability of our business. 65 Table of Contents Shown below is the adjusted net income (loss) for the following periods and a reconciliation of this measure of performance to net income (loss) as presented in the consolidated statements of operations and comprehensive income (loss): Years Ended December 31, 2025 2024 2023 (in millions) Net income (loss) attributable to Hippo $ 57.7 $ (40.5) $ (273.1) Adjustments: Depreciation and amortization 20.4 23.2 $ 19.8 Stock-based compensation 29.3 38.2 57.5 Fair value adjustments (0.6) 1.7 4.5 Other one-off transactions 1.0 7.9 7.8 Impairment and restructuring charges 5.0 3.6 5.5 Gain on sale of a business (95.0) (54.4) — Adjusted net income (loss) $ 17.8 $ (20.3) $ (178.0) Diluted Adjusted Earnings (Loss) per Share Diluted Adjusted Earnings (Loss) per Share is a non‑GAAP financial measure defined as adjusted net income (loss) divided by the weighted average common shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method.
The decrease was due primarily to a decrease in non-inspection policy fees from our HHIP segment. Net Investment Income For the year ended December 31, 2024, net investment income was $24.4 million, an increase of $1.3 million, or 6%, compared to $23.1 million for the year ended December 31, 2023.
Net Investment Income For the year ended December 31, 2025, net investment income was $25.4 million, an increase of $1.0 million, or 4%, compared to $24.4 million for the year ended December 31, 2024. The increase was primarily driven by higher average balance of assets under management in the investment portfolio during the period.
Years Ended December 31, Change 2024 2023 2024 vs. 2023 PCS losses 9 % 20 % (11) % Non-PCS losses 44 % 51 % (7) % Gross loss ratio 53 % 71 % (18) % For the year ended December 31, 2024, our Gross Loss Ratio was 53% net of a prior year favorable development of 2 percentage points relating to non-PCS events and 2 percentage points relating to PCS events, compared with 71% net of a prior year favorable development of 1 percentage point relating to non-PCS events and 2 percentage points relating to PCS events for the year ended December 31, 2023.
Included in our non-catastrophe loss ratio for the years ended December 31, 2025 and 2024 is a benefit of 2 percentage points and 1 percentage point related to prior year favorable developments, respectively.
This was offset by a decrease in ceding commission due to an increase in our premium retention, compared to the prior year. Service and Fee Income For the year ended December 31, 2024, service and fee income was $11.6 million, a decrease of $4.1 million, or 26%, compared to $15.7 million for the year ended December 31, 2023.
Service and Fee Income For the year ended December 31, 2025, service and fee income was $11.8 million, an increase of $0.2 million, or 2%, compared to $11.6 million for the year ended December 31, 2024. Service and fee income is primarily comprised of policy fees sourced through our owned MGA.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
Technology and Development Expenses For the year ended December 31, 2024, technology and development expenses were $30.7 million, a decrease of $16.3 million, or 35%, compared to $47.0 million for the year ended December 31, 2023.
Commission Income, Net For the year ended December 31, 2025, commission income was $51.3 million, a decrease of $12.3 million, or 19%, compared to $63.6 million for the year ended December 31, 2024.
We consider all available evidence, both positive and negative, including historical levels of income, expectations, and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. 64 Key Operating and Financial Metrics and Non-GAAP Measures We regularly review the following key operating and financial metrics in order to evaluate our business, measure our performance, identify trends in our business, prepare financial projections, and make strategic decisions.
Key Operating and Financial Metrics and Non-GAAP Measures We regularly review the following operating and financial metrics to evaluate our business, measure our performance, identify trends in our business, prepare forecasts, and make capital allocation and strategic decisions. Certain metrics discussed below are non-GAAP financial measures.
The increase was due primarily to an increase in our total book of business and higher premium retention rates, as well as an increase in PCS catastrophic weather and other weather loss experience.
The increase was due primarily to the earning of increased gross written premiums and increased retention in our Renters and Commercial Multi-Peril lines of business as well as an increase in retention in our Homeowners line.
Our borrowing capacity as of December 31, 2024, is $17.4 million, and there were no outstanding amounts under this agreement. To date, we have funded operations primarily with issuances of convertible preferred stock, convertible promissory notes, and from net proceeds from a private placement transaction in connection with the Business Combination, the Business Combination, and revenue.
To date, we have funded operations primarily with issuances of convertible preferred stock, convertible promissory notes, common stock and a surplus note, as well as from asset and business dispositions and revenue.
For the years ended December 31, 2024 and 2023, $60.2 million and $53.9 million, respectively, was offset against earned premium for XOL. Commission Income, Net For the year ended December 31, 2024, commission income was $63.6 million, an increase of $0.2 million, compared to $63.4 million for the year ended December 31, 2023.
For the year ended December 31, 2024, net earned premium was $272.5 million, an increase of $165.0 million, or 153% compared to $107.5 million for the year ended December 31, 2023. The increase was due primarily to increased retention in our Homeowners line of business.
The following table presents Total Generated Premium for the years ended December 31, 2024 and 2023 (in millions): 65 Change 2024 2023 2024 vs. 2023 Gross Written Premium $ 892.4 $ 847.3 $ 45.1 Gross Placed Premium 443.7 287.0 156.7 Total Generated Premium $ 1,336.1 $ 1,134.3 $ 201.8 Adjusted EBITDA We define adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (“adjusted EBITDA”), a Non-GAAP financial measure, as net loss attributable to Hippo excluding interest expense, income tax expense, depreciation, amortization, stock-based compensation, net investment income, restructuring charges, impairment expense, other non-cash fair market value adjustments, contingent consideration for one of our acquisitions, and other transactions, which may include certain legal fees and settlement costs, that we consider to be unique in nature.
We define Adjusted Net Income (Loss) as net income (loss) adjusted for, as applicable, (i) depreciation and amortization, (ii) stock-based compensation expense, (iii) the impact of other non-cash fair market value adjustments, (iv) impairment and restructuring related expenses, (v) gain or loss on the sale of a business, and (vi) other one-off transactions, which primarily include certain legal fees and settlement costs, that we consider to be unique in nature, net of tax impact.
For the year ended December 31, 2024, we recorded a net reserve release of $6.1 million related to prior accident years, compared with $2.0 million for the year ended December 31, 2023. 71 Insurance-Related Expenses For the year ended December 31, 2024, insurance-related expenses were $88.8 million, an increase of $9.7 million, or 12%, compared to $79.1 million for the year ended December 31, 2023.
Technology and Development Expenses For the year ended December 31, 2025, technology and development expenses were $32.5 million, an increase of $1.8 million, or 6%, compared to $30.7 million for the year ended December 31, 2024. The increase was due primarily to higher employee-related costs of $1.2 million, reflecting an increase in headcount during the period.
For the year ended December 31, 2024, adjusted EBITDA loss was $43.5 million, a decrease of $157.1 million compared to a loss of $200.6 million for the year ended December 31, 2023, the decrease was due primarily to a growth in revenue reflecting an increase in premiums earned mainly due to higher premium retention as a result of the 2023 and 2024 reinsurance treaties compared to prior periods, partially offset by an increase in loss and loss adjustment expenses and insurance-related expenses.
Insurance Related Expenses For the year ended December 31, 2025, insurance related expenses were $131.3 million, an increase of $42.5 million, or 48%, compared to $88.8 million for the year ended December 31, 2024. The increase was due primarily to an increase in net acquisition expenses of $41.3 million due to increased premium retention and higher volume.
Years Ended December 31, 2024 2023 Net Losses and LAE $ 209.0 $ 181.7 Net Earned Premium 272.5 107.5 Net Loss Ratio 77 % 169 % For the year ended December 31, 2024, our Net Loss Ratio was 77% net of a prior year favorable development of 1 percentage point relating to PCS events and 1 percentage point relating to non-PCS events, compared with 169% net of a prior year favorable development of 2 percentage points relating to PCS events for the year ended December 31, 2023.
Included in our catastrophe loss ratio for the years ended December 31, 2025 and 2024 is a benefit of 1 percentage point related to prior year favorable developments in both years.
The decrease was due primarily to a decrease in stock-based compensation of $8.0 million, partially driven by a charge due to the repricing of options during the first quarter of 2023, and facilities costs of $3.3 million, partially offset by an increase in legal costs of $2.8 million.
The decrease was due 60 Table of Contents primarily to lower legal costs of $4.9 million, partially offset by higher consultant costs of $1.2 million and increased employee related costs of $0.8 million.
Removed
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Added
Certain statements included in this section constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s current expectations and beliefs concerning future developments and their potential effects on Hippo Holdings Inc. and its subsidiaries.
Removed
In the third quarter of 2023 we began taking several actions to lower the volatility of our Hippo Homeowners Insurance Program portfolio in light of the significant catastrophe losses we experienced in the second quarter, including raising rates on a portion of our renewal business, increasing deductibles for wind and hail perils, selectively non-renewing policies in certain regions, and instituting a nationwide pause on underwriting new premiums for our HO3 business as we examined our risk appetite.
Added
Actual results may differ materially from those expressed or implied by such forward-looking statements. Important factors that could cause actual results to differ materially are described in the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” sections included elsewhere in this Annual Report on Form 10-K.
Removed
We also launched an expense reduction initiative across the Company, including a reduction in staff which we announced in October 2023.
Added
Our operations include providing insurance capacity and related services for our owned MGA and in partnership with third-party MGAs and fee-based and commission-based services that support the placement and servicing of insurance policies.
Removed
Further information on our business and reportable segments is presented in Part I, Item 1, “Business” and in Note 22 of the Notes to the Consolidated Financial Statements included in Part II, Item 8, “Financial Statements and Supplementary Data.” Reinsurance We reinsure a portion of the risks we underwrite in order to reduce the volatility of our earnings, and to protect our capital management.
Added
We continue to execute actions to support balanced diversified growth, leveraging both third-party MGAs and our owned MGA to source and underwrite a diversified portfolio of risk across personal and commercial lines. We participate in MGA programs when they align with our risk appetite, and assess performance through disciplined underwriting, selective risk retention, reinsurance, and ongoing portfolio management.
Removed
As an MGA, we underwrite homeowners insurance policies on behalf of our insurance company subsidiaries (Spinnaker and Spinnaker Specialty Insurance Company (“SSIC”)) and other non-affiliated third-party insurance carriers. These carriers cede to reinsurers a portion of these risks and pay a premium based upon the risk and exposure of the policies subject to such reinsurance.
Added
Over time, the mix of our written premium base has evolved, and we expect it may continue to evolve, with a lower proportion attributable to homeowners insurance as we further diversify our portfolio across less catastrophe exposed lines of business.
Removed
The Company utilizes a variety of reinsurance structures to manage its exposure to large property losses, including non-proportional catastrophe excess of loss (“XOL”) and, to a lesser extent, proportional quota share reinsurance. Without reinsurance protection, the carriers would shoulder all the insurance risk themselves and would need incremental capital to satisfy regulators and rating agency requirements.
Added
Our 2025 financial results reflect the business mix and portfolio composition during the period, as well as broader market conditions affecting the property and casualty insurance industry.
Removed
Reinsurance allows a carrier to reduce its balance sheet exposure and volatility of earnings. Proportional Reinsurance Treaties — Hippo Home Insurance Program For our Hippo primary homeowners’ reinsurance program for policies with effective dates in 2024, we elected not to purchase proportional reinsurance.
Added
Segment structure Beginning in the third quarter of 2025, we changed our reportable segment structure from three segments to one reportable segment to reflect the manner in which our chief operating decision maker evaluates financial performance and allocates resources. Prior-period segment information has been recast and is presented on a consistent basis in the notes to our consolidated financial statements.
Removed
Based on our growing confidence in the profitability and predictability of our underwriting results, we decided to retain more of the exposure and associated premium.
Added
This change affects how segment information is presented but does not impact our consolidated results of operations, financial condition, or cash flows. Accordingly, the discussion below focuses on our consolidated results. See Note 19 to the consolidated financial statements for additional information on Segments.
Removed
For business produced through our builder channel for policies with effective dates in 2024, we purchased proportional reinsurance from one third-party reinsurer and expect to retain approximately 85% of the premium and associated risk, before purchasing catastrophe protection. All reinsurance obligations are appropriately collateralized.
Added
Line of business disclosure During 2025, we expanded our presentation of operating information by line of business to provide additional transparency into the composition and diversification of our premium base. These lines of business reflect the primary categories of insurance products offered by our insurance subsidiaries, including Homeowners, Renters, Commercial Multi-Peril, Casualty, and other programs.
Removed
The reinsurance contracts are subject to contingent commission adjustments and a loss occurrence limit, which aligns our interests with that of the reinsurer. 57 Effective January 1, 2024, we also elected to cut off 25% of the reinsurer’s participation on the 2023 proportional reinsurance treaty and retain the remaining exposure and related premiums.
Added
Line-of-business information represents supplemental premium-related information and is not presented as separate reportable segments.
Removed
In 2024, we continued to further protect our balance sheet through the purchase of non-proportional reinsurance described below in the section titled “Non-Proportional Reinsurance.” For our primary homeowners’ reinsurance program for policies with effective dates in 2023, we secured proportional reinsurance from a diverse panel of third-party reinsurers.
Added
For comparability, certain line-of-business information is presented for all periods shown, including periods prior to the initial introduction of this presentation in our disclosures. 56 Table of Contents The lines-of-business information presented in this section reflects how the Company presents gross written, net written and net earned premium by product category.
Removed
All reinsurers are either rated “A-” Excellent or better by AM Best, or the reinsurance is appropriately collateralized. In 2023, we retained approximately 40% of the premium through our insurance company subsidiaries or our captive reinsurance company, RHS, before purchasing catastrophe protection.
Added
Reserve development disclosures in Note 9 to the consolidated financial statements are disaggregated based on claim duration characteristics for financial reporting purposes. Emerging Growth Company Status We previously qualified as an emerging growth company (“EGC”) under the Jumpstart Our Business Startups Act of 2012.
Removed
Additionally, the reinsurance contracts are subject to contingent commission adjustments and loss participation features, which align our interests with those of our reinsurers. Loss participation features may increase the amount of losses retained by our insurance company subsidiaries in excess of our pro rata participation.
Added
During fiscal year 2025, we ceased to qualify as an emerging growth company and are no longer eligible for the reduced reporting and disclosure requirements available to emerging growth companies.
Removed
For business produced through our builder channel for policies with effective dates in 2023, we purchased proportional reinsurance from three third-party reinsurers. All reinsurers are rated “A-” Excellent or better by AM Best, or the reinsurance is appropriately collateralized. In 2023, we retained approximately 58% of the premium produced through our insurance company subsidiaries or RHS, before purchasing catastrophe protection.
Added
As a result, beginning with this Annual Report on Form 10-K, we are subject to additional reporting and compliance requirements applicable to accelerated filers that are not emerging growth companies, including the requirement that our independent registered public accounting firm provide an attestation report on the effectiveness of our internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act.
Removed
The reinsurance contract is subject to contingent commission adjustments and limited loss participation features, which align our interests with those of the reinsurers. For our primary homeowners reinsurance program for policies with effective dates in 2022, we secured proportional reinsurance from a diverse panel of third-party reinsurers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks related to interest rate changes and the corresponding changes in the market values of our investments. Interest Rate Risk Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates. We are primarily exposed to market risk through our fixed maturities, short-term investments, and cash and cash equivalents.
Our investments are exposed to market risk due to the fluctuation of prevailing interest rates that may reduce the yield on our investments or their fair value. Management does not expect our results of operations or cash flows to be materially affected by a sudden change in market interest rates.
We do not enter into investments for trading or speculative purposes. Our investments are exposed to market risk due to the fluctuation of prevailing interest rates that may reduce the yield on our investments or their fair value.
Our current investment strategy seeks first to preserve principal, second to provide liquidity for our operating and capital needs, and third to maximize yield without putting principal at risk. We do not enter into investments for trading or speculative purposes.
We invest our excess cash primarily in money market accounts, corporate and foreign securities, residential and commercial mortgage-backed securities, and other governmental related securities. Our current investment strategy seeks first to preserve principal, second to provide liquidity for our operating and capital needs, and third to maximize yield without putting principal at risk.
Removed
We are primarily exposed to market risk through our fixed maturities, short-term investments, and cash and cash equivalents. We invest our excess cash primarily in money market accounts, corporate and foreign securities, residential and commercial mortgage-backed securities, and other governmental related securities.
Added
Management does not expect our results of operations or cash flows to be materially affected by a sudden change in market interest rates. The Company does not have material exposure to equity price risk and commodity price risk. There were no invested assets denominated in foreign currencies.
Removed
In addition, if a 10% change in interest rates were to have immediately occurred on December 31, 2024, this change would not have a material effect on the fair value of our investments as of that date. 77
Added
We are also exposed to credit risk on our investment portfolio and reinsurance recoverable. Credit risk results from uncertainty in a counterparty’s ability to meet its obligations. We monitor our investment portfolio to ensure that credit risk does not exceed prudent levels. We manage the exposure to credit risk in our U.S.
Added
Treasury securities, municipal securities, corporate debt securities, and asset-backed securities portfolio by investing in high credit quality, investment grade securities and diversifying our holdings. As of December 31, 2025 and 2024, none of our fixed maturity securities were unrated or rated below investment grade.
Added
We manage the exposure to credit risk in our reinsurance contracts by obtaining reinsurance from a diverse group of reinsurers and monitoring concentration as well as financial strength ratings of the reinsurers to minimize counterparty credit risk.
Added
To further reduce credit exposure, we obtain letters of credit from certain reinsurers that are not authorized as reinsurers under U.S. state insurance regulations. The Company also has reinsurance recoverable balances from reinsurers with a majority of the reinsurers having an A.M. Best rating of A (Excellent) or better.
Added
For certain reinsurance partners who are not rated, we require adequate levels of collateral or letters of credit to be available to us in the event of downside scenarios.
Added
Interest Rate Risk Interest rate risk is the risk that the Company will incur a loss due to adverse changes in interest rates relative to the interest rate characteristics of interest bearing assets and liabilities. Our fixed maturities portfolio, including cash and cash equivalents, is exposed to interest rate risk.
Added
Changes in interest rates have a direct impact on the market valuation of these securities. As of December 31, 2025 and 2024, the estimated fair value of our fixed maturities and short-term investments was $445.9 million and $373.3 million, respectively.
Added
We estimate that a 10% increase in interest rates would cause a decline in the estimated fair value of our fixed maturities portfolio by 15.8% at December 31, 2025 and 14.0% at December 31, 2024, while a 10% decrease in interest rates would cause an increase in the estimated fair value of that portfolio by 15.8% at December 31, 2025 and 13.9% at December 31, 2024.
Added
The selected scenarios are not predictions of future events, but rather illustrate the effect that such events may have on the fair value of our fixed maturities portfolio. Inflation We attempt to anticipate the potential impact of inflation in our pricing and our establishing of reserves for losses and loss adjustment expenses.
Added
Inflation in excess of the levels we have assumed could cause losses and loss 73 Table of Contents adjustment expenses to be higher than we anticipated and impact our reinsurance costs and the amount of reinsurance we must purchase to meet certain thresholds and higher inflation assumptions cause our reinsurance costs to increase.
Added
Substantial future increases in inflation could also result in future increases in interest rates, which in turn are likely to result in a decline in the market value of the investment portfolio and cause unrealized losses or reductions in total stockholders’ equity. 74 Table of Contents

Other HIPO 10-K year-over-year comparisons