Hippo Holdings
A small US insurance company that lends its licences and rating to agencies that sell their own policies, and runs its own home insurance on the side.
The scores
Growth3/4 ↑
Policies sold up 61% and revenue 23% in Q2, guidance raised twice; but most growth is passed to reinsurers, so what Hippo keeps grows slower.
Business quality2/4 ↑
Licences and a rating keep partners and programmes doubled, but Markel and others rent the same paper and fees are undisclosed.
Financial position3/4 ↑
About $410M of tangible equity, a small surplus note and reinsurance behind $1.7B of policies a year; reinsurers owe $450M.
Execution record3/4 ↑
Losses of $333M in 2022 turned to profit; 2026 guidance raised twice and expenses cut; one segment for under two years.
Per share capture3/4 →
Shares grew about 3% this year against sales up about half; stock pay near $29M a year and buybacks stopped.
Potential2/4 →
A $22.6B fronting market growing with MGAs, but the 2028 plan leans on one casualty programme and Accelerant, neither contracted.
Risk profile3/4 →
Catastrophe exposure in four states, reliance on reinsurers paying, and two partners carrying the growth; reinsurance limits the worst.
Valuation3/4 ↓
2.5 times tangible equity and about 10 times a 2028 reported profit near $100M: the plan roughly delivered, nothing beyond it.
Evidence quality3/4 →
Statements, reserves and capital are filed; the Accelerant volume, retention plans and 2028 targets rest on management's word.
The Verdict
We rate Hippo Neutral. The business is mixed: insurance sold on its paper grew 61% a year in the second quarter and costs fell fast, but Hippo keeps only about a third of what it writes, and most of its profit is the company's adjusted measure. The price is fair: at about 2.5 times what shareholders own after intangibles, it pays for management's 2028 plan being met, and little beyond it. The view hinges on whether reported profit catches up with adjusted profit and whether Accelerant, its biggest new partner, stays after being bought.
The long caseIf MGAs keep winning share and need rented paper, Hippo's carrier writes far more premium on the same capital and fees.
The evidence under this - 6 claims
Stock pay is a real cost but not cash, and the 2026 GAAP figure should still roughly double 2024's loss turned profit; the gap narrows if premium grows faster than the add-backs.
On adjusted figures the price is about 15 times the 2026 guide and 7 times the 2028 target, and the cohort's median is 3.3 times tangible book.
The 2028 premium plan includes the Accelerant programme, whose owner is being taken private, and 'organic growth at slightly lower pace than achieved historically'.
The agreement is not filed, its term is not disclosed, and Accelerant agreed in August to be taken private by Thoma Bravo (C14).
The company
Many insurance products are designed and sold by agencies called MGAs, which have the customers and the know-how but no insurance company of their own. They rent one: a licensed, rated carrier issues the policies under its name, a practice called fronting.
Hippo's carriers, led by Spinnaker, do that for dozens of agencies, from casualty to small-business cover. Hippo also sells its own home insurance. The alternatives for an agency are Markel's State National and other carriers, or building its own.
The evidence under this - 5 claims
How it makes money
Hippo earns three ways: what customers pay for the share of risk it keeps, a fee on the rest, which it passes to reinsurers, and interest on the money it holds before claims are paid. In the quarter to June 2026 it wrote $482.2M of policies and kept $183.2M of them. Casualty and small-business programmes were two-thirds of what it wrote, and they are the lines where it keeps the least.
The evidence under this - 4 claims
Guided net written premium of about $570M against $1.675B gross implies about 34% kept for the year, so most growth passes to reinsurers and earns Hippo a fee rather than underwriting profit.
Casualty net earned premium rose from $0.8M to $10.7M a year apart, so the low-retention lines are starting to add underwriting income, not only fees.
Where the money comes from, stream by stream
| Stream | Share of sales (Q2 2026) | How it earns it |
|---|---|---|
| Net earned premium | 82% | The premium Hippo keeps, earned over the policy term: homeowners, renters, commercial multi-peril and casualty. |
| Commission and fee income | 13% | Fronting fees on premium passed to reinsurers, and agency commissions on policies placed with other carriers. |
| Net investment income | 5% | Interest on the carriers' investments and cash. |
Who runs it
Rick McCathron has been president since 2017 and chief executive since 2022, and owns 2.17%; officers and directors own 4.48% between them. Talkot, an investment firm, holds 11.4% and the Lennar Foundation, tied to the homebuilder, 8.0%.
Bonuses pay on revenue, reported net income and operating goals, and a quarter of the chief executive's shares vest on how the stock does against other insurtechs over three years.
The evidence under this - 1 claim
Why it wins, and who could beat it
Why customers come back
An agency cannot write insurance without a licensed carrier, approved rates in each state and a rating brokers accept. Spinnaker has licences in every state and an A- rating, so agencies rent it, and once their policies sit on its paper, moving them means filing everything again.
The sign that partners stay: Hippo ran 52 programmes in mid-2026 against 26 five quarters earlier, most added by partners already there, and those existing programmes grew 79%.
The evidence under this - 5 claims
The 10-K names rivals with higher financial-strength ratings (C19); State National is rated A by AM Best on Markel's description.
Many carriers already rent paper: Conning counts $22.6B of fronting premium (C16) and Accelerant is moving toward outside carriers (C15), so licences alone are not scarce.
The programmes are not named and casualty growth rests mostly on one of them (C11), so the count overstates how spread the growth is.
The threat
Renting paper is not rare. Markel's State National fronts $1.9B a year, and larger home insurers with better ratings compete for Hippo's own customers. The sharpest risk is Accelerant: its new private owner could move its programme to its own or another carrier.
The evidence under this - 4 claims
The rivals: MKL, ARX, ALL, TRV, LMND, and 1 more that is private, in-house or listed abroad.
Who else does this, rival by rival
| Ticker | Rival | Where it competes | How far along | Priced against it |
|---|---|---|---|---|
| MKL | Markel's State NationalPriced against it: One segment only | Carrier platform: Spinnaker paper rented to outside MGAs and programme partners | On sale | One segment only |
| ARX | Accelerant's own carriersPriced against it: Not checked | Carrier platform: Spinnaker paper rented to outside MGAs and programme partners | On sale | Not checked |
| ALL · TRV | Allstate and Travelers homeowners policies, sold through agents and bundled with carPriced against it: Yes | Hippo Homeowners Insurance Program, Hippo's own MGA | On sale | Yes |
| Not listed | State Farm, Liberty Mutual and FarmersPriced against it: Not listed | Hippo Homeowners Insurance Program, Hippo's own MGA | On sale | Not listed |
| LMND | LemonadePriced against it: Yes | - | On sale | Yes |
How big it could get
How big this could get
Conning, an insurance research firm, counts about $128B of insurance sold by MGAs in the US in 2025, growing 12% a year, with about a fifth of it written on rented paper: roughly $22.6B to $25.6B a year. Hippo wrote about $1.1B in 2025, so it has at most about 5% of that market.
The evidence under this - 2 claims
Who has signed
Accelerant, an agency network, agreed to put more than $500M a year of policies on Hippo's paper from October 2026, on Hippo's statement; the agreement is not filed and its length is not disclosed. The other 52 programmes run on agreements that are not filed either.
The evidence under this - 3 claims
The agreement is not filed, its term is not disclosed, and Accelerant agreed in August to be taken private by Thoma Bravo (C14).
The programmes are not named and casualty growth rests mostly on one of them (C11), so the count overstates how spread the growth is.
The results
The numbers
Sales grew 21% over the twelve months to Sep 2026, slower than the 26% in the year to Dec 2025.
It keeps 5.9% of sales as profit, up from −130% in the year to Dec 2023.
Yearly sales growth has ranged from +26% to +77% over the last 5 years.
Shareholders' money earned 7.2% a year, up from −113% in the year to Dec 2021.
It turned 23% of sales into free cash, $127M over the last twelve months.
Free cash flow was 4.0 times net income.
The share count rose 148% in 4.8 years, and pay in shares costs 4.8% of sales.
All the numbers
Filed figures from the company's 10-K and 10-Q, read 2026-10-29. Fiscal years end in December.
| Dec 2021 | Dec 2022 | Dec 2023 | Dec 2024 | Dec 2025 | 12 mo to Sep 2026 | |
|---|---|---|---|---|---|---|
| Size and growth | ||||||
| Sales | $91.2M | $120M | $210M | $372M | $469M | $543M |
| Sales growth | +77% | +31% | +75% | +77% | +26% | +21% |
| Profit | ||||||
| Net margin | −407% | −279% | −130% | −11% | 12% | 5.9% |
| What growth costs, per sales dollar | ||||||
| Sales and marketing | 104% | 85% | 38% | 14% | 7.1% | 4.8% |
| General and admin | 54% | 60% | 38% | 19% | 14% | 13% |
| Pay in shares | 27% | 52% | 27% | 10% | 6.3% | 4.8% |
| Capital spending | 0.9% | 4.1% | 14% | 0.1% | 0.0% | 0.1% |
| Cash | ||||||
| Cash from operations | −$124M | −$162M | −$92.4M | $47.5M | $9.20M | $127M |
| Free cash flow | −$125M | −$166M | −$122M | $47.2M | $9.10M | $127M |
| Balance sheet | ||||||
| Cash and short-term investments | $785M | $519M | $329M | $198M | $218M | $312M |
| Returns and shares | ||||||
| Shares (diluted) | 10.9M | 22.7M | 23.6M | 24.7M | 26.0M | 27.0M |
What growth costs
Growth is getting cheaper. Costs fell from 53.3 to 45.4 cents per dollar customers pay over six quarters while policies written grew 61%. Reported profit still trails the adjusted measure by stock pay and amortisation of about $42M a year.
The evidence under this - 3 claims
Q2 2025's 100.1% leaned on 7.4 points of favourable prior-year development, so the underlying improvement is larger than the headline in that quarter and smaller in others.
Stock pay is a real cost but not cash, and the 2026 GAAP figure should still roughly double 2024's loss turned profit; the gap narrows if premium grows faster than the add-backs.
The last report (30 Jul)
Quarter ended June 2026, filed figures.
In the quarter to June 2026 Hippo wrote $482.2M of policies, 61% more than a year earlier, and revenue rose 23% to $144.7M. Claims and costs took 95.8 cents of each dollar customers paid, its best quarter, helped by 2.1 points released from earlier years' reserves.
Reported net income was $10.1M against $21.0M on the company's adjusted measure, which leaves out stock pay. Management raised its 2026 forecast again, to $62M to $70M of adjusted profit.
What it did to the thesisIt supported the growth half of the case and showed costs falling. It left the profit question open: most growth is passed to reinsurers, reported profit stayed well below adjusted, and the quarter came before the storm season.
The quarter in detail
Sales growth from the previous quarter, filed figures.
Earnings per share $0.79 against $-0.17 expected; $0.38 as filed, the gap being what the company adds back.
The evidence under this - 4 claims
2.1 points came from earlier years, including a $2.6M commutation benefit, so the current year's own loss ratio was 52.5%, and Q2 sits before the hurricane season.
The first half ran at a 97.5% combined ratio, so the full-year range implies a second half near 101% to 105% as hurricanes and fires land.
Guided net written premium of about $570M against $1.675B gross implies about 34% kept for the year, so most growth passes to reinsurers and earns Hippo a fee rather than underwriting profit.
What management did with the money
In 2025 Hippo sold the network that sold its policies through homebuilders, for a $95.0M gain. It bought back about $30M of stock across 2024 and 2025 and has bought none in 2026.
Insiders in 2026Q3: 1 purchases and 10 sales, from their Form 4 filings.
The evidence under this - 2 claims
The price, and where we disagree
In short. Fair. The price pays for management's 2028 plan met, measured on reported profit rather than the adjusted figure, and little beyond it.
The shares fell to $24.09 in June after an unprofitable forecast, then rose to $38.58 by 22 October as management raised its outlook twice in eight weeks.
Third-quarter results on 29 October are the first test of hurricane season and of Accelerant's first policies, and Accelerant's sale to Thoma Bravo, due to close in the first half of 2027, decides whether that programme stays.
The evidence under this - 4 claims
The first half ran at a 97.5% combined ratio, so the full-year range implies a second half near 101% to 105% as hurricanes and fires land.
The agreement is not filed, its term is not disclosed, and Accelerant agreed in August to be taken private by Thoma Bravo (C14).
How we read the multiple
Over the past year Hippo earned about 6% on what shareholders own after intangibles, on reported profit without the one-off gain.
- Shareholders own $410.6M after intangibles, and the market values Hippo at about 2.5 times that.
- Management targets more than $140M of adjusted profit in 2028.
- Take out about $42M a year of stock pay and amortisation, and reported profit would be near $100M.
- The market value is about 10 times that, a normal price for an insurer meeting its plan.
Against its own history. Buyers pay far more than in the company's own past, mostly loss-making years, so the price counts on the turnaround lasting.
The evidence under this - 5 claims
On adjusted figures the price is about 15 times the 2026 guide and 7 times the 2028 target, and the cohort's median is 3.3 times tangible book.
Stock pay is a real cost but not cash, and the 2026 GAAP figure should still roughly double 2024's loss turned profit; the gap narrows if premium grows faster than the add-backs.
The 2028 premium plan includes the Accelerant programme, whose owner is being taken private, and 'organic growth at slightly lower pace than achieved historically'.
Priced against its rivals
The competitors its own annual report names, each confirmed against the rival's filing. Measured on price for each $1 of net worth excluding goodwill, cheapest first:
| Ticker | Company | price for each $1 of net worth excluding goodwill |
|---|---|---|
| ALL | The Allstate | 2.1× |
| HIPO | Hippo Holdings | 2.5× |
| TRV | The Travelers Companies | 3.3× |
| LMND | Lemonade | 7.4× |
The middle of the other 3 is 3.3. Hippo Holdings Inc. is 2nd cheapest of 4.
Rivals' figures come from a data provider, so read the spread of the group rather than any single pair.
Hippo sits in the middle of the home insurers it names, so its price is neither cheaper nor dearer than the group.
Private or foreign rivals that cannot be priced: State Farm, Liberty Mutual, Farmers Insurance.
Where we disagree with the market
A home insurtech turned profitable and growing fast, rated a buy by four of six analysts.
A real, growing platform at a price that already pays for its 2028 plan, with profit still mostly on the company's adjusted measure.
Analysts see a home insurtech that has turned profitable and is growing fast. But the growth is mostly policies Hippo fronts for others and keeps little of, and on reported figures it earned about 6% on what shareholders own.
We would be wrong if reported profit passes $25M a quarter while Hippo keeps a third or more of what it writes.
What analysts say, and the evidence
The evidence under this - 6 claims
Casualty net earned premium rose from $0.8M to $10.7M a year apart, so the low-retention lines are starting to add underwriting income, not only fees.
Stock pay is a real cost but not cash, and the 2026 GAAP figure should still roughly double 2024's loss turned profit; the gap narrows if premium grows faster than the add-backs.
On adjusted figures the price is about 15 times the 2026 guide and 7 times the 2028 target, and the cohort's median is 3.3 times tangible book.
Guided net written premium of about $570M against $1.675B gross implies about 34% kept for the year, so most growth passes to reinsurers and earns Hippo a fee rather than underwriting profit.
What could go wrong, and how we would know
The risks
- Accelerant could leave. Its biggest new partner, worth more than $500M a year of policies, is being bought by Thoma Bravo, and the agreement is not filed.
- One programme drives casualty. Most casualty growth comes from one long-standing programme, so its loss would cut the fastest-growing line.
- Storms and fires. Policies are concentrated in California, Texas, New York and Florida, and a bad season can wipe out a year of profit.
- Fees could fall. Markel and others rent paper too, and Hippo does not disclose what fee it earns or whether it is holding.
- Adjusted is not reported. Adjusted profit leaves out about $42M a year of stock pay and amortisation, which owners bear.
The evidence under this - 8 claims
The agreement is not filed, its term is not disclosed, and Accelerant agreed in August to be taken private by Thoma Bravo (C14).
Guided net written premium of about $570M against $1.675B gross implies about 34% kept for the year, so most growth passes to reinsurers and earns Hippo a fee rather than underwriting profit.
Q2 2025's 100.1% leaned on 7.4 points of favourable prior-year development, so the underlying improvement is larger than the headline in that quarter and smaller in others.
Conning counts $22.6B of fronting premium written by many carriers (C16), and Markel's State National alone fronts $1.9B (C17).
Stock pay is a real cost but not cash, and the 2026 GAAP figure should still roughly double 2024's loss turned profit; the gap narrows if premium grows faster than the add-backs.
What we still do not know
- How long the Accelerant agreement runs, and whether its new owner can end it.
- What fee Hippo earns on the policies it fronts, and whether it is falling.
- How much of casualty growth comes from the one long-standing programme.
The evidence under this - 3 claims
The agreement is not filed, its term is not disclosed, and Accelerant agreed in August to be taken private by Thoma Bravo (C14).
Conning counts $22.6B of fronting premium written by many carriers (C16), and Markel's State National alone fronts $1.9B (C17).
Guided net written premium of about $570M against $1.675B gross implies about 34% kept for the year, so most growth passes to reinsurers and earns Hippo a fee rather than underwriting profit.
What would change our view
- Neutral→AttractiveA cheaper price on an unchanged business
It needs:
- ○The market value falls to 1.8 times what shareholders own after intangibles, from 2.5, with the business unchanged.about $27.76 today, 28% below the last close
- Neutral→AttractiveReported profit catches up with adjusted
It needs all of:
- ○Reported net income reaches $25M in a quarter, up from $10.1M in the second quarter of 2026.checked at the next results, due by 29 Oct
- ○In the same quarter Hippo keeps a third or more of the policies it writes.checked at the next results, due by 29 Oct
- Neutral→UnattractiveThe platform stalls
It needs any of:
- ○Policies written grow less than 20% a year in a quarter.checked at the next results, due by 29 Oct
- ○Claims and costs pass $1.05 per dollar customers pay in a quarter without a major storm.checked at the next results, due by 29 Oct
We would also be wrong if
- Accelerant moves its programme off Hippo's paper after its sale.
- Policies written in 2027 are forecast below $1.8B in February.
What is coming
- 29 October 2026 Q3 2026 results: Whether the combined ratio held through the hurricane quarter and the first Accelerant premium arrived.
Every dated event ahead
- 29 October 2026 Q3 2026 results: Whether the combined ratio held through the hurricane quarter and the first Accelerant premium arrived.
- 26 February 2027 Q4 2026 results and 2027 guidance: Whether 2027 premium is guided above $2B and how Accelerant's take-private changes it.
- 30 June 2027 Accelerant take-private closes: Whether the new owner keeps its programme on Spinnaker paper.
Since we wrote this
- 29 OctEarningsHippo grew premium 60%, held a 98.4% combined ratio and raised its year guide. View heldQ3 2026 results.
- 26 OctThesis writtenNeutral, medium convictionWritten three days before Q3 results, after the shares rose 60% from June on two guidance raises.
Sources 16
Sources - 16
Every claim above cites one of these, or states the reasoning that derived it. The quote is frozen at the date it was read: a link can rot, and an agent fetch returns a reading of a page rather than the page. Backs counts the whole claim ledger, so it can name a claim this page does not surface.
- S01primarycompany filing2026-03-05the carriers and their licences, the move to one segment, staff, the named competitors, the 2022 to 2025 statements and the sale of the homebuilder distribution networkbacksC01C05C19C25C30
- S02primarycompany release2026-02-252025 premium by line, the year's results and the definition of adjusted net incomebacksC05C07
- S03primarycompany release2026-07-30the quarter's premium, revenue, net and adjusted income, combined ratio and the raised 2026 guidancebacksC02C04C07C09
- S04primarycompany release2026-07-30premium by line, programme count, retention, the six-quarter ratio series, book value per share, the 2028 targets and the long-term loss-ratio targetbacksC02C03C04C06C07C08C10C11C12C28C29C31
- S05primarycompany filing2026-07-30the balance sheet, reserves, reinsurance recoverables, the surplus note, share count, buybacks and premium by statebacksC01C08C22C25C26C28C30
- S06primarytranscript2026-07-30Hippo Q2 2026 earnings call transcript (FMP), held 30 July 2026retention by line, where casualty growth comes from, fronting pricing, the softening home market, Progressive's footprint and the 2027 premium expectation
despite what I think a lot of people believe, the fronting business is not a commodity business
backsC09C10C11C20C21C29 - S07primarycompany filing2026-04-22officers' tenure, share ownership, the large holders, bonus and equity design and the Lennar related-party paymentsbacksC23
- S08primarycompany release2026-06-30the Accelerant fronting volume and dates; Business Wire's own copy refused
Effective July 1, 2026, with the full program commencing October 1, 2026, Hippo will serve as a fronting carrier for more than $500 million in annual gross written premiums
backsC13 - S09primarycompany release2026-08-27the homeowners programme's expansion beyond new-built homes
increasing the number of states where the program is available from 8 to 22 states in the fourth quarter
backsC21 - S10primaryindustry data2026-07-28the size and growth of US MGA premium and of fronting-carrier premium, and the share of MGA premium written through fronting
The study also highlights the expanding role of fronting carriers, which generated an estimated $22.6 billion in gross premium during 2025.
backsC16 - S11primarycompany filing2026-02-24State National's fronting premium and what fronting is, in a rival's wordsbacksC17C30
- S12primarycompany filing2026-03-10the share of Accelerant's exchange premium written through third-party carriersbacksC15
- S13primarycompany filing2026-08-13the take-private of Hippo's largest new fronting partner and its expected timingbacksC14
- S14secondaryvendor data2026-10-26Research pack (FMP market tier, FINRA short interest, filed-competitor cohort), fetched 26 October 2026price, market value, the 52-week range, analyst split, short interest, the cohort's multiples and the insider windowbacksC26C27C28
- S15primarycompany filing2026-10-16who sold, how much and whether under a Rule 10b5-1 planbacksC24
- S16primarycompany release2026-10-26the carrier's AM Best rating and history; AM Best's own page sits behind a captcha
Spinnaker Insurance Company and its subsidiaries are rated A- (Excellent) by AM Best, effective January 28, 2026.
backsC18C30