Hippo (NYSE:HIPO) reported second-quarter 2026 net income of $10 million and adjusted net income of $21 million, extending its streak of profitability to five consecutive quarters on both a reported and adjusted basis, according to management.
Gross written premium rose 61% year over year to $482 million, while net written premium increased 71% to $183 million. President and Chief Executive Officer Rick McCathron said the results reflected growth alongside underwriting discipline, with expansion led by casualty and commercial multi-peril programs and a return to growth in homeowners insurance.
Underwriting and profitability improve
Hippo’s net combined ratio improved four percentage points from a year earlier to 95.8% in the second quarter. The company said its year-to-date combined ratio was 97.5%, representing a 31-point improvement from the first half of 2025.
The net loss ratio increased three points year over year to 50.4%, though the accident-year loss ratio excluding catastrophes improved to 45.8% from 46.4% a year earlier. Catastrophe losses accounted for 6.7% of the loss ratio, down one point year over year, while prior accident-year reserve development contributed 2%, compared with approximately 7% in the prior-year period.
The net expense ratio fell eight points year over year to 45.4%. McCathron said the company’s fixed expense ratio has declined by 39 points since the start of 2024 to 29%, as it has sought to build operating leverage through scale and technology.
Management highlighted the rollout of AI tools including Hannah, an AI service agent, and Clara, an AI first-notice-of-loss agent. Hippo also deployed Cognition’s Devin AI software engineer across its technology organization, which McCathron said encompasses nearly one-third of the company’s roughly 500 employees.
Casualty and commercial lines drive premium growth
Casualty was Hippo’s largest gross written premium line in the quarter, generating $180 million, or 37% of the total, compared with 22% a year earlier. Commercial multi-peril produced $138 million, up 65% year over year, while homeowners generated $107 million, up 7%.
On a net written premium basis, homeowners remained the largest line at $76 million, followed by commercial multi-peril at $51 million and casualty at $35 million. A program-specific reinsurance change added $27 million to total net written premium during the quarter, according to Chief Financial Officer Guy Zeltser.
McCathron said Hippo has expanded to more than 50 programs, roughly double the number it had in the first quarter of 2025. He said most of the growth has come from existing partners expanding their businesses with the company rather than from new partner additions.
During the call, McCathron said the company is seeking a diversified portfolio that can be adjusted based on market conditions. He acknowledged that the excess-and-surplus homeowners market has softened, while Hippo has continued to grow its admitted homeowners business through partnerships with Progressive and Westwood.
Zeltser said Hippo was live in eight states through Progressive at the time of the call and planned to triple that state footprint by year-end. He said the additional volume allows the company to remain selective about the policies it writes.
Reinsurance changes add flexibility
Hippo renewed its catastrophe bond and added wildfire as a named peril. The company also moved its catastrophic reinsurance purchasing to the corporate group level from a program-by-program approach. McCathron said the change reduced probable maximum losses by more than 30% across return periods most relevant to earnings volatility.
The company also introduced its first whole-account quota share arrangement. McCathron characterized the arrangement as a capability that provides an additional tool for managing risk as the business grows, rather than a transaction expected to materially affect current economics.
Management expects commercial multi-peril retention to return to the low-20% range for the full year following a second-quarter increase tied to the reinsurance change. Casualty retention is expected to settle in the mid-teens. For homeowners, management said attritional risk retention on its admitted business remains near 100%, though the mix of admitted growth could result in a modest increase in overall retention for the line.
Guidance and long-term targets raised
Hippo raised its 2026 outlook following the quarter. The company now expects:
- Gross written premium of $1.65 billion to $1.70 billion, up from prior guidance of $1.45 billion to $1.525 billion.
- Net written premium of $565 million to $580 million, compared with prior guidance of $520 million to $550 million.
- Revenue of $580 million to $585 million, up from $560 million to $570 million.
- A net combined ratio of 99% to 101%, including a 10% catastrophe loss ratio, compared with prior guidance of 103% to 105% including a 13% catastrophe loss ratio.
- Adjusted net income of $62 million to $70 million, up from $48 million to $56 million.
Total stockholders’ equity rose 4% sequentially to $466 million, while book value per share increased to $17.65 from $17.23 in the prior quarter.
McCathron said the company’s business partnerships have lifted expected 2027 premium above $2 billion, reaching a previous 2028 goal a year earlier. Hippo raised its 2028 targets to more than $2.5 billion in gross written premium and more than $140 million in adjusted net income.
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.
