Hippo (NYSE:HIPO) executives highlighted a year of premium growth, improving underwriting results, and a return to GAAP profitability during the company’s fourth quarter 2025 earnings call. Management said Hippo generated more than $1.1 billion of gross written premium (GWP) in 2025 for the first time, up 24% year-over-year, while improving its combined ratio by 25 percentage points and posting net income of $58 million for the year.
President and CEO Rick McCathron said the company entered 2026 with “positive momentum” and reiterated confidence in meeting or exceeding Hippo’s 2028 targets, which include more than $2 billion in GWP, $125 million of adjusted net income, and an 18% adjusted return on equity by the end of 2028.
2025 results: growth and underwriting improvement
Net written premium (NWP) grew 23% year-over-year in the fourth quarter to $97 million and increased 13% for the full year to $422 million, with Zeltser noting that the NWP base also became more diversified.
- Casualty: GWP grew 169% year-over-year in Q4 and 92% for the full year, representing 24% of 2025 GWP.
- Commercial multi-peril: GWP rose 58% year-over-year in Q4 and 75% for the full year, also representing 24% of 2025 GWP.
- Homeowners: GWP declined 5% year-over-year in Q4 and fell 10% for the full year, accounting for 34% of 2025 GWP versus 47% in 2024.
On underwriting, Zeltser reported the fourth-quarter net loss ratio improved 12 percentage points year-over-year to 46%, citing favorable trends in both catastrophe and non-catastrophe losses. Cat loss ratio improved seven points to -1% due to a “very low level” of cat losses during the quarter and positive development from earlier quarters in accident year 2025. Non-cat loss ratio improved five points to 47%, reflecting rate actions, refined policy terms and conditions, enhanced underwriting, and stronger claims outcomes.
Hippo’s fourth-quarter net expense ratio increased four points year-over-year to 53.5%, which Zeltser attributed entirely to the sale of the home builder distribution network in the third quarter of 2025; the prior-year quarter benefited from five points of profit from those agencies.
Overall, the fourth-quarter net combined ratio improved eight points to 99.4%.
For full-year 2025, the net loss ratio improved 17 points to 60%, including an 11-point improvement in non-cat loss ratio to 45% and a six-point improvement in the cat loss ratio to 15% compared to 2024. The full-year net expense ratio improved eight points to 53% due to platform scalability. Zeltser said these changes led to a full-year combined ratio of 113%, a 25-point improvement compared to 2024.
Profitability: GAAP net income and adjusted net income
Hippo reported fourth-quarter net income attributable to the company of $6 million, or $0.23 per diluted share, compared to $44 million, or $1.71 per diluted share, in the prior-year quarter. Zeltser said the year-over-year decline was primarily driven by a $46 million gain from the sale of the majority stake in First Connect in the prior-year period, which more than offset underwriting improvements.
Fourth-quarter adjusted net income increased 20% year-over-year to $18 million, or $0.67 per diluted share.
For the full year, net income attributable to Hippo was $58 million, or $2.22 per diluted share, representing a $98 million improvement year-over-year. Zeltser attributed the improvement to top-line growth, stronger underwriting performance, and an incremental $45 million net gain from asset sales in 2025 versus 2024. Full-year adjusted net income was $18 million, or $0.68 per diluted share, improving by $38 million year-over-year. Zeltser noted the net gain on sales is excluded from adjusted net income.
Total shareholders’ equity ended the quarter at $436 million, or $16.97 per share, up 17% from $362 million, or $14.56 per share, at year-end 2024. Zeltser said the increase was primarily driven by the gain on the sale of the home builder distribution network and better underwriting performance, which more than offset first-quarter operating losses from California wildfires and a third-quarter share repurchase.
Business mix: homeowners retooling and commercial program growth
McCathron emphasized three strategic pillars: diversification across personal and commercial lines, technology-driven market expansion, and risk management optimization. He said Hippo’s homeowners business produced $379 million of GWP in 2025, down about 10%, as the company prioritized profitability amid heightened competition in E&S. He said Hippo achieved an average renewal premium increase of about 15% in its HHIP business and now views the line as rate adequate.
McCathron said the homeowners business is expected to return to growth in 2026, citing two developments:
- Through Hippo’s Baldwin partnership, it is actively quoting business with more than 50 home builders nationwide, up from six prior to the sale of the home builder distribution network.
- The company completed improvements to its homeowners product outside the builder channel, including an advanced rate filing process, revised terms and conditions, and improved claims handling, and has relaunched traditional new policy writing with selected partners.
In renters, management reported 2025 GWP of $175 million, up 19% year-over-year, describing the program as one of Hippo’s “most seasoned” and continuing to grow while maintaining attractive profitability.
In commercial lines, McCathron highlighted significant growth in commercial multi-peril (up 75% year-over-year to $265 million of GWP) and in casualty (up 92% to $264 million of GWP). He said growth came primarily from established programs with track records of attractive underwriting results. He also provided detail on risk controls in the partner program platform, including underwriting guidelines, exception processes, and claims oversight. McCathron said Hippo’s claims team reviews more than 800 files per month and that quote exceptions currently represent “well under 1%” of quotes. He added that programs that underperform can be placed into runoff.
McCathron cited a 54% gross loss ratio in 2025, which he said included the impact of severe California wildfires in early 2025.
Key Q&A: homeowners relaunch, casualty exposure, and reserve development
During the Q&A, McCathron said Hippo has spent the past two years “retooling” traditional homeowners, including taking rate increases, improving terms and conditions, and changing coverage language related to deductibles and roof schedules. He said the relaunch is occurring “in a thoughtful way” with a limited number of strategic partners in selected states, with plans to expand throughout the year, including some direct-to-consumer efforts.
On casualty, McCathron said the portfolio includes cyber insurance, commercial general liability (primarily small business and construction projects), and some commercial auto. He reiterated that Hippo retained about 3% of exposure in 2025, with an average exposure per account of $300,000 and an expected claim settlement time of “two years or less,” which he characterized as short-tail. He said retention could rise over 2026 and beyond on a selective, partner-by-partner basis, and noted reinsurance can be used to protect against tail risk or larger limits exposure.
Asked about reserve development, Zeltser said fourth-quarter development was mostly driven by one large homeowners liability claim. He added that on a full-year basis the company released about $10 million and that, even focusing on the fourth quarter, Hippo saw about three points of positive development from earlier quarters in accident year 2025. Zeltser said management felt “pretty good” about reserve positioning entering 2026.
On homeowners renewal pricing, Zeltser said the company does not expect another year of 15% renewal premium increases, but still expects premiums to rise in 2026 due to rates and inflation. He also said Hippo expects premium increases to remain ahead of loss cost, supporting management’s confidence in profitability as the company grows outside the builder channel. McCathron added that Hippo is limiting quotes to risks it expects to be profitable, stating that partners will not see quotes for business the company does not want to write.
2026 outlook: premium growth and improving combined ratio
For 2026, Zeltser guided to GWP growth of 27% to 36% to a range of $1.4 billion to $1.5 billion, reflecting expectations for continued growth in newer lines and a return to homeowners growth. Net written premium is expected to rise 19% to 28% to $500 million to $540 million.
Hippo expects its net combined ratio to improve by 8 to 10 percentage points to 103% to 105%, driven “mostly by the operating leverage and scalability” of the platform. The outlook assumes a 13% cat loss ratio, slightly below the 15% reported in 2025, which included the Los Angeles wildfires; Zeltser said the reduction is supported by diversification into less cat-exposed lines.
The company guided to adjusted net income of $45 million to $55 million for 2026, compared with $18 million in 2025. Zeltser added that Hippo is no longer providing net income guidance and is instead guiding to stock-based compensation and depreciation and amortization expense, expected to total about $41 million in 2026, down from $50 million in 2025.
About Hippo (NYSE:HIPO)
Hippo Enterprises Inc is a technology-driven home insurance company that offers modernized homeowners insurance products through a digital-first platform. Leveraging data analytics, artificial intelligence and smart home devices, the company designs tailored coverage plans intended to streamline the underwriting process and deliver more comprehensive protection for homeowners. Hippo’s policies typically include standard dwelling coverage, personal property protection and liability insurance, along with optional add-ons such as water backup, home computer systems and equipment breakdown coverage.
Through its online portal and partner network of licensed insurance agents, Hippo provides policyholders with a range of services aimed at minimizing risk and preventing losses before they occur.
