Hippo completes 2024 reinsurance renewals with success
Hippo completes 2024 reinsurance renewals with success | Insurance Business New Zealand
Reinsurance
Hippo completes 2024 reinsurance renewals with success
The company shares some of the changes in its program
Reinsurance
By
Jonalyn Cueto
Hippo has announced the successful placement of its 2024 reinsurance program.
“Our reinsurance partners have demonstrated their unwavering confidence in our enterprise by offering improved terms for the second consecutive year,” said Rick McCathron, CEO and president of Hippo. “Our persistent efforts to mitigate weather-related risks, coupled with our proactive stance on home protection, have consistently driven significant enhancements in our loss ratio. This has notably enhanced the appeal of the Hippo Home Insurance Program to reinsurers, many of whom have maintained longstanding partnerships with us.”
CFO Stewart Ellis attributed the success of the placement to the values of the company.
“The accomplishment of placing our 2024 reinsurance program, along with our decision to retain a larger portion of the non-PCS exposure and corresponding premium on our balance sheet, reflects our escalating confidence in the profitability and predictability of our underwriting outcomes,” Ellis said.
Among the highlights of the implementation shared in a Press release include the following:
There was a strategic shift in the approach to reinsurance by the company regarding Proportional Reinsurance Treaties (Hippo) and Non-Proportional Reinsurance (Hippo). The decision to reduce the reliance on proportional reinsurance for the Hippo Home Insurance Program and to increase the retention of premiums and associated non-catastrophe attritional losses on the balance sheet was made in anticipation of ongoing improvements in the attritional loss ratio. This decision also reflects the proactive measures undertaken by Hippo to mitigate volatility.
The reduction in proportional reinsurance for the Hippo Home Insurance Program is expected to mitigate the impact of loss participation features compared to previous agreements. Concurrently, there was an increase in the purchases of non-proportional Excess-of-Loss (XOL) reinsurance. This involved elevating the per occurrence XOL limit by 11% and broadening the participation to include 19 reinsurers, up from the previous 14. This placement, combined with existing catastrophe protections, extends coverage to the upper layers of risk, safeguarding against events up to a 1-in-250-year occurrence.
Further insights into the reinsurance strategies for the Hippo program will be unveiled during the 4Q23 earnings report scheduled for March 2024 and detailed in the 2023 Annual Report on Form 10K to be filed with the SEC.
Hippo is a home insurance group that is focused on proactive home protection.
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