Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 22, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-39711 | ||
Entity Registrant Name | HIPPO HOLDINGS INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 32-0662604 | ||
Entity Address, Address Line One | 150 Forest Avenue | ||
Entity Address, City or Town | Palo Alto | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94301 | ||
City Area Code | 650 | ||
Local Phone Number | 294-8463 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 314 | ||
Entity Common Stock, Shares Outstanding | 23,305,324 | ||
Documents Incorporated by Reference | Portions of the registrant's Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. Such proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant's fiscal year ended December 31, 2022. | ||
Entity Central Index Key | 0001828105 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Common Stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Common stock, $0.0001 par value per share | ||
Trading Symbol | HIPO | ||
Security Exchange Name | NYSE | ||
Warrants to purchase common stock | |||
Document Information [Line Items] | |||
Title of 12(b) Security | Warrants to purchase common stock | ||
Trading Symbol | HIPO.WS | ||
Security Exchange Name | NYSE |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2022 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Firm ID | 42 |
Auditor Location | San Francisco, California |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Investments: | ||
Fixed maturities available-for-sale, at fair value (amortized cost: $127.3 million and $55.6 million, respectively) | $ 121.1 | $ 54.9 |
Short-term investments | 324.8 | 9.1 |
Total investments | 445.9 | 64 |
Cash and cash equivalents | 194.5 | 775.6 |
Restricted cash | 50 | 43.1 |
Accounts receivable, net of allowance of $0.3 million and $0.4 million, respectively | 107.2 | 56.5 |
Reinsurance recoverable on paid and unpaid losses and LAE | 286.3 | 266.9 |
Prepaid reinsurance premiums | 309.9 | 231.6 |
Ceding commissions receivable | 45.8 | 41.6 |
Capitalized internal use software | 38.8 | 25.9 |
Goodwill | 0 | 53.5 |
Intangible assets | 26.9 | 32.2 |
Other assets | 63.6 | 51.8 |
Total assets | 1,568.9 | 1,642.7 |
Liabilities: | ||
Loss and loss adjustment expense reserve | 293.8 | 260.8 |
Unearned premiums | 341.3 | 253.1 |
Reinsurance premiums payable | 207.1 | 159.4 |
Provision for commission | 5 | 12.3 |
Accrued expenses and other liabilities | 128.2 | 95.4 |
Total liabilities | 975.4 | 781 |
Commitments and contingencies (Note 16) | ||
Stockholders’ equity (deficit) | ||
Common stock, $0.0001 par value per share; 80,000,000 and 80,000,000 shares authorized as of December 31, 2022 and December 31, 2021, respectively; 23,201,434 and 22,601,245 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | 0 | 0 |
Additional paid-in capital | 1,558 | 1,488.3 |
Accumulated other comprehensive loss | (7) | (0.7) |
Accumulated deficit | (961.1) | (628) |
Total Hippo stockholders' equity | 589.9 | 859.6 |
Noncontrolling interest | 3.6 | 2.1 |
Total stockholders’ equity | 593.5 | 861.7 |
Total liabilities and stockholders’ equity | $ 1,568.9 | $ 1,642.7 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Fixed maturities, available-for-sale, amortized cost | $ 127.3 | $ 55.6 |
Accounts receivable, allowance | $ 0.3 | $ 0.4 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common stock, shares issued (in shares) | 23,201,434 | 22,601,245 |
Common stock, shares outstanding (in shares) | 23,201,434 | 22,601,245 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue: | ||
Net earned premium | $ 42,500,000 | $ 38,900,000 |
Commission income, net | 54,300,000 | 37,500,000 |
Service and fee income | 13,900,000 | 14,500,000 |
Net investment income | 9,000,000 | 300,000 |
Total revenue | 119,700,000 | 91,200,000 |
Expenses: | ||
Losses and loss adjustment expenses | 101,400,000 | 84,400,000 |
Insurance related expenses | 59,900,000 | 41,700,000 |
Technology and development | 57,500,000 | 36,200,000 |
Sales and marketing | 101,800,000 | 95,000,000 |
General and administrative | 71,500,000 | 49,200,000 |
Impairment and restructuring charges | 55,300,000 | 0 |
Interest and other (income) expense, net | (2,500,000) | 198,900,000 |
Gain on extinguishment of debt | 0 | (47,000,000) |
Total expenses | 444,900,000 | 458,400,000 |
Loss before income taxes | (325,200,000) | (367,200,000) |
Income taxes expense | 1,300,000 | 700,000 |
Net loss | (326,500,000) | (367,900,000) |
Net income attributable to noncontrolling interests, net of tax | 6,900,000 | 3,500,000 |
Net loss attributable to Hippo | (333,400,000) | (371,400,000) |
Other comprehensive loss: | ||
Change in net unrealized gain or loss on investments, net of tax | (6,300,000) | (800,000) |
Comprehensive loss attributable to Hippo | (339,700,000) | (372,200,000) |
Per share data: | ||
Net loss attributable to Hippo - basic | (333,400,000) | (371,400,000) |
Net loss attributable to Hippo - diluted | $ (333,400,000) | $ (371,400,000) |
Weighted-average shares used in computing net loss per share attributable to Hippo - basic (in shares) | 22,747,101 | 10,886,757 |
Weighted-average shares used in computing net loss per share attributable to Hippo - diluted (in shares) | 22,747,101 | 10,886,757 |
Net loss per share attributable to Hippo - basic (in dollars per share) | $ (14.66) | $ (34.11) |
Net loss per share attributable to Hippo - diluted (in dollars per share) | $ (14.66) | $ (34.11) |
Consolidated Statements Stockho
Consolidated Statements Stockholders’ Equity - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total Hippo Stockholders' Equity | Non controlling Interests |
Beginning balance (in shares) at Dec. 31, 2020 | 12,235,498 | ||||||
Beginning balance at Dec. 31, 2020 | $ 344.8 | ||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Exercise of preferred stock warrant (in shares) | 693,796 | ||||||
Exercise of preferred stock warrant | $ 173.4 | ||||||
Convertible preferred stock conversion (in shares) | (12,929,294) | ||||||
Convertible preferred stock conversion | $ (518.2) | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 0 | ||||||
Ending balance at Dec. 31, 2021 | $ 0 | ||||||
Beginning balance (in shares) at Dec. 31, 2020 | 3,701,881 | ||||||
Beginning balance at Dec. 31, 2020 | (199.5) | $ 0 | $ 56.9 | $ 0.1 | $ (256.6) | $ (199.6) | $ 0.1 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | (367.9) | (371.4) | (371.4) | 3.5 | |||
Other comprehensive loss | (0.8) | (0.8) | (0.8) | ||||
Convertible preferred stock conversion (in shares) | 12,929,294 | ||||||
Convertible preferred stock conversion | 518.2 | 518.2 | 518.2 | ||||
Convertible debt conversion and other issuances (in shares) | 1,737,972 | ||||||
Convertible debt conversion and other issuances | 434.5 | 434.5 | 434.5 | ||||
Issuance of common stock in connection with the Business Combination, net (in shares) | 2,199,545 | ||||||
Issuance of common stock in connection with the Business Combination, net | 453.9 | 453.9 | 453.9 | ||||
Acquisition of Public and Private Placement Warrants | (14.6) | (14.6) | (14.6) | ||||
Issuance of common stock in an acquisition (in shares) | 48,000 | ||||||
Issuance of common stock in an acquisition | $ 6.2 | 6.2 | 6.2 | ||||
Issuance of common stock from stock plans and contingently issuable shares (in shares) | 913,892 | 897,319 | |||||
Issuance of common stock from stock plans and contingently issuable shares | $ 6 | 6 | 6 | ||||
Exercise of common stock warrants, net (in shares) | 1,088,103 | ||||||
Repurchase of common stock (in shares) | (869) | ||||||
Stock-based compensation expense | 27.2 | 27.2 | 27.2 | ||||
Other | $ (1.5) | (1.5) | |||||
Ending balance (in shares) at Dec. 31, 2021 | 22,601,245 | 22,601,245 | |||||
Ending balance at Dec. 31, 2021 | $ 861.7 | 1,488.3 | (0.7) | (628) | 859.6 | 2.1 | |
Ending balance (in shares) at Aug. 02, 2021 | 22,389,249 | ||||||
Ending balance (in shares) at Dec. 31, 2022 | 0 | ||||||
Ending balance at Dec. 31, 2022 | $ 0 | ||||||
Beginning balance (in shares) at Dec. 31, 2021 | 22,601,245 | 22,601,245 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net loss | $ (326.5) | (333.4) | (333.4) | 6.9 | |||
Other comprehensive loss | $ (6.3) | (6.3) | (6.3) | ||||
Issuance of common stock for earnout from acquisition (in shares) | 45,474 | ||||||
Issuance of common stock from stock plans and contingently issuable shares (in shares) | 145,525 | 558,314 | |||||
Issuance of common stock from stock plans and contingently issuable shares | $ 4.9 | 4.9 | 4.9 | ||||
Repurchase of common stock (in shares) | (3,599) | ||||||
Shares withheld related to net share settlement | (3.9) | (3.9) | (3.9) | ||||
Stock-based compensation expense | 68.7 | 68.7 | 68.7 | ||||
Other | $ (5.1) | 0.3 | 0.3 | (5.4) | |||
Ending balance (in shares) at Dec. 31, 2022 | 23,201,434 | 23,201,434 | |||||
Ending balance at Dec. 31, 2022 | $ 593.5 | $ 0 | $ 1,558 | $ (7) | $ (961.1) | $ 589.9 | $ 3.6 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (326,500,000) | $ (367,900,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 15,200,000 | 11,000,000 |
Stock–based compensation expense | 61,900,000 | 24,300,000 |
Change in fair value of preferred stock warrant liabilities | 0 | 121,600,000 |
Change in fair value of warrant liability | (4,000,000) | (10,300,000) |
Change in fair value of contingent consideration liability | 4,100,000 | 3,500,000 |
Impairment charges | 53,500,000 | 0 |
Change in fair value of derivative liability on notes | 0 | 61,400,000 |
Amortization of debt discount | 0 | 20,400,000 |
Gain on extinguishment of debt | 0 | (47,000,000) |
Non-cash interest expense | 0 | 5,700,000 |
Non-cash service expense | 0 | 7,000,000 |
Other non-cash items | (3,000,000) | 2,100,000 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (50,900,000) | (19,500,000) |
Reinsurance recoverable on paid and unpaid losses and LAE | (19,400,000) | (132,800,000) |
Ceding commissions receivable | (4,200,000) | (20,300,000) |
Prepaid reinsurance premiums | (78,300,000) | (102,200,000) |
Other assets | 8,900,000 | (32,800,000) |
Provision for commission | (7,300,000) | (15,900,000) |
Accrued expenses and other liabilities | 19,600,000 | 35,400,000 |
Loss and loss adjustment expense reserves | 33,000,000 | 155,700,000 |
Unearned premiums | 88,200,000 | 102,800,000 |
Reinsurance premiums payable | 47,700,000 | 73,300,000 |
Net cash used in operating activities | (161,500,000) | (124,500,000) |
Cash flows from investing activities: | ||
Capitalized internal use software costs | (14,800,000) | (13,300,000) |
Purchase of intangible assets | 0 | (3,300,000) |
Purchases of property and equipment | (4,900,000) | (800,000) |
Purchases of investments | (793,000,000) | (26,200,000) |
Maturities of investments | 401,600,000 | 5,800,000 |
Sales of investments | 7,200,000 | 10,700,000 |
Other | (2,000,000) | (2,900,000) |
Net cash used in investing activities | (405,900,000) | (30,000,000) |
Cash flows from financing activities: | ||
Taxes paid related to net share settlement of equity awards | (3,900,000) | 0 |
Proceeds from the exercise of preferred stock warrants | 0 | 29,000,000 |
Proceeds from reverse recapitalization, net of redemptions, secondaries and costs | 0 | 450,300,000 |
Proceeds from exercise of options | 4,100,000 | 5,500,000 |
Payments of contingent consideration | (1,700,000) | (2,400,000) |
Other | (5,300,000) | (1,600,000) |
Net cash (used in) provided by financing activities | (6,800,000) | 480,800,000 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (574,200,000) | 326,300,000 |
Cash, cash equivalents, and restricted cash at the beginning of the period | 818,700,000 | 492,400,000 |
Cash, cash equivalents, and restricted cash at the end of the period | 244,500,000 | 818,700,000 |
Supplemental disclosures of non-cash financing and investing activities: | ||
Conversion of preferred stock for common stock | 0 | 518,200,000 |
Conversion of convertible notes for common stock | 0 | 434,500,000 |
Acquisition of public and private placement warrants | 0 | 14,600,000 |
Convertible promissory notes issued for services | 0 | 7,000,000 |
Equity issued for acquisitions | $ 0 | $ 6,200,000 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Summary of Significant Accounting Policies | 1. Description of Business and Summary of Significant Accounting Policies Description of Business Hippo Holdings Inc., referred to herein as “Hippo” or the “Company” was originally incorporated under the name Reinvent Technology Partners Z (“RTPZ”), a Cayman Islands exempted company, on October 2, 2020 for the purpose of effecting a merger, capital stock-exchange, asset acquisition, share purchase, reorganization, or similar business combination. On August 2, 2021, RTPZ domesticated as a Delaware corporation and changed its name to “Hippo Holdings Inc.” (the “Domestication”) and consummated the merger (the “First Merger”) of RTPZ Merger Sub Inc. (“Merger Sub”), a Delaware corporation and subsidiary of RTPZ, with and into Hippo Enterprises Inc., a Delaware corporation (“Old Hippo”), with Old Hippo surviving the Merger as a wholly owned subsidiary of the Company immediately following the First Merger, Old Hippo (as the surviving corporation of the First Merger) was merged with and into the Company, with the Company surviving (the “Second Merger” and, together with the First Merger, the “Mergers” or the “Business Combination”). The Business Combination was completed pursuant to the terms of the Agreement and Plan of Merger, dated as of March 3, 2021, by and among RTPZ, Merger Sub and Old Hippo. For additional information on the Business Combination, refer to Note 2. The Company’s headquarters are located in Palo Alto, California. The Company’s subsidiary, Hippo Analytics Inc., is a licensed insurance agency that provides various insurance services, including some or all of the following services for affiliated and non-affiliated insurance carriers: soliciting, marketing, servicing, underwriting, or providing claims processing services for a variety of commercial and personal insurance products. The Company’s insurance company subsidiaries, Spinnaker Insurance Company (“Spinnaker”), an Illinois domiciled insurance company, Spinnaker Specialty Insurance Company ("SSIC”), a Texas domiciled authorized surplus lines insurance company, and Mainsail Insurance Company (“MIC”), a Texas domiciled insurance company, underwrite personal and commercial insurance products on a direct basis through licensed insurance agents and surplus lines brokers. The Company also owns RH Solutions Insurance (Cayman) Ltd. (“RHS”), a Cayman domiciled captive insurance company, which assumes insurance risk of policies from affiliated and non-affiliated insurance carriers, a majority of which is for business written through Hippo Analytics Inc. Through Spinnaker or RHS, the Company also retains approximately 10% of the proportional direct insurance risk for programs underwritten by third parties. Hippo Analytics Inc. offers its insurance products through licensed insurance agents, and direct-to-consumer channels. The insurance products offered through Hippo Analytics Inc. primarily include homeowners’ insurance policies that protect customers from the risks of fire, wind, and theft. Hippo Analytics Inc. is licensed as an insurance agency in 50 states and the District of Columbia and currently underwrites and distributes policies in 40 states as a managing general agent. The Company’s other non-insurance subsidiaries offer service contracts, home health check-ups, and home care advice. Basis of Presentation and Consolidation The consolidated financial statements and accompanying notes of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries where it has controlling financial interests, and any variable interest entities for which the Company is deemed to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. As a result of the Business Combination, which was completed on August 2, 2021, prior period share and per share amounts presented in the accompanying Consolidated Financial Statements and these related notes have been converted in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. Refer to Note 2 for additional information. Reverse Stock Split On September 29, 2022, the Company filed a Certificate of Amendment to its Certificate of Incorporation to effect a one-for-25 reverse stock split of the Company’s common stock and a corresponding adjustment to its authorized capital stock (the “Reverse Stock Split”), effective as of 11:59 p.m. Eastern Daylight Time on September 29, 2022 (the “Effective Time”). All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated. As a result of the Reverse Stock Split, every 25 shares of the Company’s issued and outstanding common stock were automatically converted into one share of issued and outstanding common stock. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders who otherwise would have been entitled to receive fractional shares of common stock were entitled to receive cash in an amount equal to the product obtained by multiplying (a) the closing price per share of the common stock as reported on the New York Stock Exchange as of the first trading day following the Effective Time, by (b) the fraction of one share owned by the stockholder. Proportionate adjustments were made to the number of shares issuable upon the exercise or vesting of all stock options, restricted stock, restricted stock units or other stock-based awards or rights (the “Stock-Based Awards”) and warrants outstanding at the Effective Time, as well as certain performance goals applicable to certain of Stock-Based Awards, which resulted in a proportional decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such Stock-Based Awards and warrants, and, in the case of stock options, purchase rights outstanding under the Company’s 2021 Employee Stock Purchase Plan and warrants, a proportional increase in the exercise price of such stock options, purchase rights and warrants. In addition, the number of shares reserved for issuance under the Company’s 2021 Incentive Award Plan and 2021 Employee Stock Purchase Plan were proportionately reduced. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, loss and loss adjustment expense (“LAE”) reserves, provision for commission slide and cancellations, reinsurance recoverable on paid and unpaid losses and LAE, the fair values of investments, stock-based awards, warrant liabilities, contingent consideration liabilities, acquired intangible assets and goodwill, deferred tax assets and uncertain tax positions, and revenue recognition. The Company evaluates these estimates on an ongoing basis. These estimates are informed by experience and other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ significantly from these estimates. Business Combinations The Company accounts for acquisitions of entities or asset groups that qualify as businesses using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Purchase consideration is allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date, which are measured in accordance with the principles outlined in ASC 820, Fair Value Measurement. The determination of fair value requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature. The excess of the total purchase consideration over the fair value of the identified net assets acquired is recognized as goodwill. The results of the acquired businesses are included in the results of operations beginning from the date of acquisition. Acquisition-related costs are expensed as incurred. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the allocation of purchase consideration and to the fair values of assets acquired and liabilities assumed to the extent that additional information becomes available. After this period, any subsequent adjustments are recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Business Combination on August 2, 2021 was accounted for as a reverse recapitalization. See Note 2 for additional information. Segment Information The Company’s chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company has a single operating and reportable segment structure. Primarily all the Company’s long-lived assets are in the United States. Cash, Cash Equivalents, and Restricted Cash Cash consists of cash on deposit. The Company considers all highly liquid securities readily convertible to cash, that mature within three months or less from the original date of purchase to be cash equivalents. The Company’s restricted cash relates to cash restricted to support issued letter of credits and collateral to insurers. The Company’s restricted cash also includes fiduciary assets. Fiduciary Assets and Liabilities In its capacity as an insurance agent and broker, the Company collects premiums from insureds and, after deducting its commission, remits the premiums to the respective insurers. The Company also processes claims on behalf of insurers and collects claims from insurers on behalf of insureds. Premiums collected from insureds but not yet remitted to insurance companies and claims collected from insurance companies but not yet remitted to insureds are fiduciary assets. Fiduciary assets are recorded within restricted cash in the Company’s consolidated balance sheets. Unremitted insurance premiums and claims held in a fiduciary capacity and the obligation to remit these funds is recorded as fiduciary liabilities within accrued expenses and other liabilities in the consolidated balance sheets. Investments The Company has categorized its investment portfolio as available-for-sale and has reported the portfolio at fair value, adjusted for other-than-temporary declines in fair value, with unrealized gains and losses, net of tax, reported as an amount in other comprehensive loss. Fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Amortization of premium and accretion of discount are computed using the scientific method (constant yield to worst). Realized gains and losses are determined using specific identification method and included in the determination of income. Net investment income includes interest and dividend income, amortization and accretion of investment premiums and discounts, respectively, realized gains and losses on sales of securities, and other-than-temporary declines in the fair value of securities, if any. The Company reviews all securities with unrealized losses on a quarterly basis to assess whether the decline in the securities fair value necessitates the recognition of an allowance for credit losses. Factors considered in the review include the extent to which the fair value has been less than amortized cost, and current market interest rates and whether the unrealized loss is credit-driven or a result of changes in market interest rates. The Company also considers factors specific to the issuer including the general financial condition of the issuer, the issuers industry and future business prospects, any past failure of issuer to make scheduled interest or principal payments, and the payment structure of the investment and the issuers ability to make contractual payments on the investment. The Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost. When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs, and potential sales of investments to capitalize on favorable pricing. For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, a credit-loss charge is recognized in net income based on the fair value of the security at the time of assessment. For fixed-maturity securities that the Company has the intent and ability to hold, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income. The Company did not identify any available-for-sale securities as of December 31, 2022 which presented a risk of loss due to credit deterioration of the security. Fair Value of Financial Instruments The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions, and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities that are publicly accessible at the measurement date. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company’s financial instruments include cash equivalents, restricted cash, fixed maturities, short-term investments, accounts receivable, accounts payable, assumed and ceded reinsurance contracts, preferred stock warrants and public and private warrants. Cash equivalents and restricted cash are principally stated at amortized cost, which approximates their fair value. Short-term investments and preferred stock warrants are reported at fair value. The recorded carrying amount of accounts receivable, assumed and ceded reinsurance contracts, and accounts payable approximates their fair value due to their short-term nature. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk are primarily comprised of cash and cash equivalents, short-term investments, fixed maturities available-for-sale, and reinsurance recoverables. Cash deposits may, at times, exceed amounts insured by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. However, its exposure to credit risk in the event of default by the financial institutions is limited to the extent of amounts recorded on the consolidated balance sheet. The Company performs evaluations of the relative credit standing of these financial institutions to limit the amount of credit exposure. The Company has not experienced any losses on its deposits of cash and cash equivalents to date. The Company limits its exposure to credit losses by investing in money market funds, U.S. government securities, or securities with average credit quality of AA- or better. Premium receivables are a mix of receivables due from policyholders, agents, and program administrators. The Company has no significant off-balance-sheet concentration of credit risks such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. The Company enters into quota share and excess of loss contracts which may be susceptible to catastrophe exposure. The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of the policy coverage, and therefore the Company will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance insolvencies, the Company evaluates the financial condition of its reinsurers, monitors concentrations of credit risk and, in certain circumstances, holds substantial collateral (in the form of funds withheld and letters of credit) as security under the reinsurance agreements. Accounts Receivable Accounts receivable consists of premium receivables and commission receivables and is reported net of an allowance for premium amounts or estimated uncollectible commission. Generally premiums and commissions are collected prior to providing coverage, minimizing the Company’s exposure to credit risk. Premiums and commissions receivable are short-term in nature and due within a year. The Company has established an allowance for uncollectible premiums and commissions related to credit risk, which it reviews on a quarterly basis. In its review, the Company considers length of collection periods, the creditworthiness of the insured, economic environment, specific regulatory developments and other relevant factors. Amounts deemed to be uncollectible are written off against the allowance. Write-offs of receivables have not been material to the Company during the years ended December 31, 2022 and 2021. Reinsurance Reinsurance recoverable, including amounts related to incurred but not reported claims (“IBNR”), represent paid losses and LAE and reserves for unpaid losses and LAE ceded to reinsurers that are subject to reimbursement under reinsurance treaties. To minimize exposure to losses related to a reinsurer’s inability to pay, the financial condition of such reinsurer is evaluated initially upon placement of the reinsurance and periodically thereafter. In addition to considering the financial condition of a reinsurer, the collectability of the reinsurance recoverable is evaluated based upon a number of other factors. Such factors include the amounts outstanding, length of collection periods, disputes, any collateral or letters of credit held and other relevant factors. Historically, the Company has not experienced any credit losses from reinsurance recoverables as of December 31, 2022 and 2021 respectively. The Company evaluates its reinsurance recoverables on a quarterly basis for risk of loss due to credit deterioration, including evaluating historical collection trends, reinsurer credit ratings, and other economic factors that may affect collectability of its reinsurance receivables due to credit deterioration To the extent that an allowance for uncollectible reinsurance recoverable is established, amounts deemed to be uncollectible would be written off against the allowance for estimated uncollectible reinsurance recoverable. The Company currently has no material allowance for uncollectible reinsurance recoverable. Ceded premium written is recorded in accordance with the applicable terms of the reinsurance contracts and ceded premium earned is charged against revenue over the period of the reinsurance contracts. Ceded losses incurred reduce net loss and LAE incurred over the applicable periods of the reinsurance contracts with third-party reinsurers. Loss participation features in the reinsurance agreements are estimated at each reporting period and recorded as an adjustment to loss and LAE. Commission slide features in the reinsurance agreements are estimated at each reporting period and recorded as an adjustment to commission income, net. For ceded reinsurance, risk transfer requirements must be met for reinsurance accounting to apply. If risk transfer requirements are not met, the contract is accounted for as a deposit, resulting in the recognition of cash flows under the contract through a deposit asset or liability and not as revenue or expense. To meet risk transfer requirements, a reinsurance contract must include both insurance risk, consisting of both underwriting and timing risk, and a reasonable possibility of a significant loss for the assuming entity. Similar risk transfer criteria are used to determine whether directly written insurance contracts should be accounted for as insurance or as a deposit. Prepaid reinsurance premiums represents the unearned portion of premiums ceded to reinsurers. Amounts recoverable from reinsurers are estimated in a manner consistent with the liability associated with the reinsured business and consistent with the terms of the underlying contract. Deferred Policy Acquisition Costs, net of Ceding Commissions Incremental direct costs of acquiring insurance contracts and certain costs related directly to the acquisition process are deferred within other assets on the consolidated balance sheets and amortized over the term of the policies or reinsurance treaties to which they relate. Those costs include commissions, premium taxes, and board and bureau fees. Ceding commissions relating to reinsurance agreements are recorded as a reimbursement for both deferrable and non-deferrable acquisition costs. The portion of the ceding commission that is equal to the pro-rata share of acquisition costs based on quota share percentage is recorded as an offset to the direct deferred acquisition costs. Any portion of the ceding commission that exceeds the deferrable acquisition costs of the business ceded is recorded as a deferred liability and amortized over the same period in which the related premiums are earned. The amortization of deferred policy acquisition costs is included in insurance related expenses on the consolidated statements of operations and comprehensive loss. The Company amortized deferred policy acquisition costs of $17.8 million and $13.9 million for the years ended December 31, 2022 and 2021, respectively. Premium Deficiency A premium deficiency is recognized if the sum of expected losses and LAE, unamortized acquisition costs, and policy maintenance costs exceeds the remaining unearned premiums. A premium deficiency would first be recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. If the premium deficiency was greater than unamortized acquisition costs, a liability would be accrued for the excess deficiency. The Company considers anticipated investment income when determining if a premium deficiency exists. The Company recognized a nil and $0.3 million premium deficiency at December 31, 2022 and 2021, respectively. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation and is reflected within other assets on the consolidated balance sheets. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful life of three years for furniture, fixtures, and equipment and two years for computer equipment. Leasehold improvements are also depreciated using the straight-line method and are amortized over the shorter of the remaining term of the lease or the useful life of the improvement. Depreciation expense totaled $0.9 million and $0.4 million for the years ended December 31, 2022 and 2021, respectively. Expenditures for improvements are capitalized, and expenditures for maintenance and repairs are expensed as incurred. Upon sale or retirement, the cost and related accumulated depreciation is removed from the related accounts, and the resulting gain or loss, if any, is reflected in interest and other expense in the consolidated statements of operations and comprehensive loss. Leases Leases arise from contractual obligations that convey the right to control the use of an identified property, plant or equipment for a stated time period in exchange for consideration. The Company determines if an arrangement is, or contains a lease at contract inception. Lease classification is determined at the lease commencement date, on which the leased assets are available for the Company’s use. The Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability at commencement date for operating leases. ROU assets are presented under other assets accrued expenses and other liabilities ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make payments during the lease term. ROU assets are recognized at the lease commencement date for the lease liability amount, adjusted for initial direct costs incurred and lease incentives received. Lease liabilities are recognized at commencement based on the present value of the future lease payments over the lease term. Lease terms may include options to extend or terminate the lease when the Company believes it is reasonably certain that the Company will exercise such options. Since the implicit discount rate for operating leases is not readily determinable, the Company uses an estimate of its incremental borrowing rate (“IBR”) on the lease commencement date in determining the present value of lease payments. IBR is determined based on information available at lease commencement including interest rates, credit ratings, credit spreads, and lease term. Operating lease expense is recognized on a straight-line basis over the lease term. The Company accounts for lease and non-lease components as a single lease component. Accordingly, the Company includes fixed non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities. Non-lease components that are not fixed are expensed as incurred as variable lease payments. The Company does not record leases on the balance sheet that have a term of 12 months or less at the lease commencement date. Capitalized Internal Use Software The Company capitalizes the costs to develop its internal use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed, and the software will be used as intended. Such costs are amortized on a straight-line basis over the estimated useful life of five years. Costs incurred prior to meeting these criteria, in addition to costs incurred for training and maintenance, are expensed as incurred. Goodwill and Intangible Assets The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recorded at their fair values as of the acquisition date on the consolidated balance sheets. Any excess of purchase price over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires the Company to make significant estimates and assumptions. Transaction costs associated with business combinations are expensed as they are incurred. Included in the purchase price of an acquisition may be an estimation of the fair value of liabilities associated with contingent consideration. The fair value of contingent consideration is based upon the present value of the expected future payments to be made to the sellers of an acquired business in accordance with the provisions contained in the respective purchase agreements. Subsequent changes in the fair value of contingent consideration are recorded in the consolidated statements of operations and comprehensive loss. When the Company determines net assets acquired does not meet the definition of a business combination under the acquisition method of accounting, the transaction is accounted for as an acquisition of assets and, therefore, no goodwill is recorded. Amortization and Impairment Intangible assets with finite useful lives are amortized over their estimated useful lives in the consolidated statements of operations and comprehensive loss. Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment annually, or more frequently if necessary. The goodwill impairment test is performed at the reporting unit level. To review for impairment the Company first assess qualitative factors to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. After assessing the totality of events and circumstances, if the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further assessment is performed. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company calculates the fair value of that reporting unit and compares the fair value to the reporting unit’s net book value. If the fair value of the reporting unit is greater than its net book value, there is no impairment. If the net book value exceeds the reporting unit’s fair value, an impairment loss is recognized, with the loss not exceeding the total amount of goodwill allocated to that reporting unit. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Indefinite-lived intangible assets are tested for impairment by comparing the estimated fair value of the asset to the asset’s carrying value. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized, and the asset is written down to its estimated fair value. There were no material impairment losses recognized on indefinite-lived intangible assets during the years ended December 31, 2022 and 2021. Refer to Note 6 for impairment charges related to goodwill. The Company evaluates the recoverability of long-lived assets, excluding goodwill and indefinite-lived intangible assets, whenever events or changes in circumstances indicate the carrying value of such asset may not be recoverable. Should there be an indication of impairment, the Company tests for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss. There were no material impairment losses recognized on long-lived assets during the years ended Decembe |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | 2. Business Combinations Business Combination - Reverse Recapitalization On August 2, 2021, the Company completed the Business Combination (the “Closing”). The Business Combination was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. Under this method of accounting, RTPZ was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the reverse recapitalization was treated as the equivalent of Old Hippo issuing stock for the net assets of RTPZ, accompanied by a recapitalization. Operations prior to the reverse recapitalization were those of Old Hippo. In connection with the Business Combination: • Certain accredited investors (the “PIPE Investors”) entered into subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors agreed to purchase 2,200,000 shares (the “PIPE Shares”) of the Company’s common stock at a purchase price per share of $250.00 and an aggregate purchase price of $550.0 million (the “PIPE Investment”). The PIPE Investment was consummated concurrently with the Closing. • Hippo used $95.0 million to reacquire 380,000 shares of common stock from certain stockholders of Old Hippo prior to the Business Combination. • Prior to the Business Combination, RTPZ issued an aggregate of 230,000 shares of Class B common stock (the “Founder Shares”) to Reinvent Sponsor Z LLC, a Cayman Islands limited liability company (the “Sponsor”) for an aggregate purchase price of $25,000 in cash. All outstanding Founder Shares were automatically converted into shares of the Company’s common stock on a one-for-one basis at the Closing and will continue to be subject to the transfer restrictions applicable to such Founder Shares. • Prior to the Closing, holders of 770,455 shares of Class A common stock of RTPZ exercised their rights to redeem those shares for cash at an approximate price of $250.00 per share, for an aggregate of approximately $192.6 million which was paid to such holders at Closing. The remaining Class A common stock of RTPZ converted into shares of the Company’s common stock on a one-for-one basis at the Closing. • Immediately after giving effect to the Merger and the PIPE Investment, there we re 22,389,249 shares of Hippo common stock outstanding. The aggregate gross cash consideration received by the Company in connection with the Business Combination and the PIPE investment was $587.7 million, which consisted of proceeds of $550.0 million from the PIPE Investment, plus approximately $37.7 million of cash from the Company’s trust account that held the proceeds from RTPZ’s initial public offering (the “Trust Account”) post-redemption of shares of RTPZ’s Class A common stock from RTPZ’s Class A stockholders. The aggregate cash consideration received was reduced by $95.0 million for the repurchase of common stock and reduced by $42.4 million for the payment of direct transaction costs incurred by Old Hippo and the Company which were reflected as a reduction of proceeds. The remaining consideration consisted of 19,809,704 new ly issued shares of the Company’s common stock. The following table reconciles th e elements of the Business Combination and the PIPE investment to the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2022 : in millions Recapitalization Cash in trust, net of redemptions $ 37.7 Cash - PIPE 550.0 Less: Cash used for repurchase of common stock (95.0) Less: transaction costs and advisory fees (42.4) Net cash received from the Business Combination and PIPE investment $ 450.3 Net assets acquired from the Business Combination 3.6 Total $ 453.9 The number of shares of common stock issued immediately following the consummation of the Business Combination and the PIPE Investment: Number of Shares Class A common stock outstanding prior to Business Combination 920,000 Less: Redemption of RTPZ Class A common stock (770,455) Class A common stock of RTPZ 149,545 RTPZ Founder shares – Class B 230,000 PIPE Shares 2,200,000 Business Combination and PIPE shares which converted to Hippo common stock 2,579,545 Old Hippo shares, net of repurchase (1) 19,809,704 Total shares of common stock outstanding immediately after Business Combination and PIPE investment 22,389,249 (1) The number of Old Hippo shares was determined based on Old Hippo common stock outstanding immediately prior to the closing of the Business Combination multiplied by the Exchange Ratio of 6.95433 adjusted for buyback of 380,000 shares of common stock. For further details, refer to Note 19, Stockholders’ Equity. In connection with the Business Combination, preferred stock warrants were exercised for cash proceeds of $29.0 million. See also Note 14, Convertible Promissory Notes and Derivative Liability, Note 15, Public Warrants and Private Placement Warrants, Note 18, Convertible Preferred Stock, and Note 19, Stockholders’ Equity for additional information regarding changes to the instruments as a result of the Business Combination. |
Investments
Investments | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 3. Investments The amortized cost and fair value of fixed maturities securities and short-term investments are as follows (in millions): December 31, 2022 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Fixed maturities available-for-sale: U.S. government and agencies $ 21.6 $ — $ (0.5) $ 21.1 States and other territories 8.9 — (0.6) 8.3 Corporate securities 54.8 0.1 (2.4) 52.5 Foreign securities 0.9 — (0.1) 0.8 Residential mortgage-backed securities 20.4 0.1 (1.6) 18.9 Commercial mortgage-backed securities 6.5 — (0.7) 5.8 Asset backed securities 14.2 — (0.5) 13.7 Total fixed maturities available-for-sale 127.3 0.2 (6.4) 121.1 Short-term investments: U.S. government and agencies 129.1 — (0.2) 128.9 Commercial paper 147.1 — (0.6) 146.5 Corporate securities 49.4 — — 49.4 Total short-term investments 325.6 — (0.8) 324.8 Total $ 452.9 $ 0.2 $ (7.2) $ 445.9 December 31, 2021 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Fixed maturities available-for-sale: U.S. government and agencies $ 9.3 $ — $ — $ 9.3 States and other territories 5.8 — (0.1) 5.7 Corporate securities 17.3 — (0.2) 17.1 Foreign securities 0.9 — — 0.9 Residential mortgage-backed securities 10.8 — (0.2) 10.6 Commercial mortgage-backed securities 4.8 — (0.1) 4.7 Asset backed securities 6.7 — (0.1) 6.6 Total fixed maturities available-for-sale $ 55.6 $ — $ (0.7) $ 54.9 Short-term investments: U.S. government and agencies $ 9.1 $ — $ — $ 9.1 Total $ 64.7 $ — $ (0.7) $ 64.0 The following tables present the gross unrealized losses and related fair values for the Company’s investments in available-for-sale debt securities, grouped by duration of time in a continuous unrealized loss position as of December 31, 2022, and December 31, 2021 (in millions): December 31, 2022 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities available-for-sale: U.S. government and agencies $ 17.9 $ (0.4) $ 1.1 $ (0.1) $ 19.0 $ (0.5) States and other territories 3.6 (0.1) 4.6 (0.5) 8.2 (0.6) Corporate securities 30.5 (1.5) 11.1 (0.9) 41.6 (2.4) Foreign securities — — 0.8 (0.1) 0.8 (0.1) Residential mortgage-backed securities 6.3 (0.3) 7.6 (1.3) 13.9 (1.6) Commercial mortgage-backed securities 1.9 — 3.9 (0.7) 5.8 (0.7) Asset backed securities 5.5 (0.2) 3.7 (0.3) 9.2 (0.5) Short-term investments: U.S. government and agencies 129.1 (0.2) — — 129.1 (0.2) Commercial paper 147.1 (0.6) — — 147.1 (0.6) Total $ 341.9 $ (3.3) $ 32.8 $ (3.9) $ 374.7 $ (7.2) December 31, 2021 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities available-for-sale: Municipal securities $ 4.9 $ (0.1) $ 0.3 $ — $ 5.2 $ (0.1) Corporate securities 14.6 (0.2) 1.3 — 15.9 (0.2) Residential mortgage-backed securities 10.3 (0.1) 0.2 (0.1) 10.5 (0.2) Commercial mortgage-backed securities 4.7 (0.1) — — 4.7 (0.1) Asset backed securities 5.4 (0.1) — — 5.4 (0.1) Total $ 39.9 $ (0.6) $ 1.8 $ (0.1) $ 41.7 $ (0.7) The Company has determined that unrealized losses as of December 31, 2022 and December 31, 2021 resulted from the interest rate environment, rather than a deterioration of the creditworthiness of the issuers. Therefore, an allowance for credit losses was not necessary as it is more likely than not that the Company will not be required to sell the investments before the recovery of the amortized cost basis or until maturity. The amortized cost and fair value of fixed maturities securities by contractual maturity are as follows (in millions): December 31, 2022 Amortized Cost Fair Value Due to mature: One year or less $ 10.6 $ 10.4 After one year through five years 67.0 64.0 After five years 8.6 8.3 Residential mortgage-backed securities 20.4 18.9 Commercial mortgage-backed securities 6.5 5.8 Asset backed securities 14.2 13.7 Total fixed maturities available-for-sale $ 127.3 $ 121.1 Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Net realized gains on fixed maturity securities were insignificant for the years ended December 31, 2022 and 2021, respectively. The Company’s net investment income is comprised of the following (in millions): Years Ended December 31, 2022 2021 Interest on cash and cash equivalents $ 2.4 $ — Fixed maturities income 2.9 0.4 Short-term investment income 3.9 — Total investment income 9.2 0.4 Investment expenses (0.2) (0.1) Net investment income $ 9.0 $ 0.3 Pursuant to certain regulatory requirements, the Company is required to hold assets on deposit with various state insurance departments for the benefit of policyholders. These special deposits are included in cash and cash equivalents or fixed maturities available-for-sale on the consolidated balance sheet s. The carrying value of securities on deposit with state regulatory authorities tot al $12.6 million and $8.6 million as o f December 31, 2022 and 2021, respectively. |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Restricted Cash | 4. Cash, Cash Equivalents, and Restricted Cash The following table sets forth the cash, cash equivalents, and restricted cash (in millions): December 31 2022 2021 Cash and cash equivalents: Cash $ 65.7 $ 219.2 Money market funds 87.1 556.4 Commercial paper 26.8 — U.S. government and agencies 14.9 — Total cash and cash equivalents 194.5 775.6 Restricted cash: Fiduciary assets 30.6 25.0 Letters of credit and cash on deposit 19.4 18.1 Total restricted cash 50.0 43.1 Total cash, cash equivalents, and restricted cash $ 244.5 $ 818.7 |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 5. Fair Value Measurement The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis (in millions): December 31, 2022 Level 1 Level 2 Level 3 Total Financial assets: Cash, cash equivalents, and restricted cash $ 244.5 $ — $ — $ 244.5 Fixed maturities available-for-sale: U.S. government and agencies 21.1 — — 21.1 States and other territories — 8.3 — 8.3 Corporate securities — 52.5 — 52.5 Foreign securities — 0.8 — 0.8 Residential mortgage-backed securities — 18.9 — 18.9 Commercial mortgage-backed securities — 5.8 — 5.8 Asset backed securities — 13.7 — 13.7 Total fixed maturities available-for-sale 21.1 100.0 — 121.1 Short-term investments U.S. government and agencies 128.9 — — 128.9 Commercial paper — 146.5 — 146.5 Corporate securities — 49.4 — 49.4 Total short-term investments 128.9 195.9 — 324.8 Total financial assets $ 394.5 $ 295.9 $ — $ 690.4 Financial liabilities: Contingent consideration liability $ — $ — $ 11.9 $ 11.9 Public warrants 0.2 — — 0.2 Private placement warrants — 0.1 — 0.1 Total financial liabilities $ 0.2 $ 0.1 $ 11.9 $ 12.2 December 31, 2021 Level 1 Level 2 Level 3 Total Financial assets: Cash, cash equivalents, and restricted cash $ 818.7 $ — $ — $ 818.7 Fixed maturities available-for-sale: U.S. government and agencies 9.3 — — 9.3 States and other territories — 5.7 — 5.7 Corporate securities — 17.1 — 17.1 Foreign securities — 0.9 — 0.9 Residential mortgage-backed securities — 10.6 — 10.6 Commercial mortgage-backed securities — 4.7 — 4.7 Asset backed securities — 6.6 — 6.6 Total fixed maturities available-for-sale 9.3 45.6 — 54.9 Short-term investments U.S. government and agencies — 9.1 — 9.1 Total financial assets $ 828.0 $ 54.7 $ — $ 882.7 Financial liabilities: Contingent consideration liability $ — $ — $ 11.6 $ 11.6 Public warrants 2.2 — — 2.2 Private placement warrants — 2.1 — 2.1 Total financial liabilities $ 2.2 $ 2.1 $ 11.6 $ 15.9 The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels at the end of each reporting period. Other than the Private Warrant Liability noted below there were no transfers between levels in the fair value hierarchy during the years ended December 31, 2022 and December 31, 2021. Contingent Consideration The contingent consideration, relating to the Company’s 2019 acquisition of North American Advantage Insurance Services, LLC is re-valued to fair value at the end of each reporting period using the present value of future payments based on an estimate of revenue and customer renewals of the acquiree. North American Advantage Insurance Services, LLC’s ultimate parent company was Lennar Corporation, a related party of the Company. There is no limit to the maximum potential contingent consideration as the consideration is based on acquired customer retention. The table below presents the changes in the contingent consideration liability valued using Level 3 inputs (in millions): 2022 2021 Balance as of January 1, $ 11.6 $ 12.0 Payments of contingent consideration (3.8) (3.9) Changes in fair value 4.1 3.5 Balance as of December 31, $ 11.9 $ 11.6 Preferred Stock Warrant Liabilities The preferred stock warrants were issued through the issuance of Series A-2 and Series C-1 Preferred Stock in March 2017 and October 2018, respectively. The warrants were vested immediately. Prior to the Business Combination on August 2, 2021, the holders exercised their warrants for 0.1 million shares of Old Hippo preferred stock in exchange for 0.7 million shares of the Company’s common stock. The warrants were classified as a liability as the underlying redeemable convertible preferred stock was not considered redeemable and would have required us to transfer assets upon exercise. Prior to the Business Combination on August 2, 2021, the aggregate fair value of the preferred stock warrant liability was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company used the fair value of its common share per the Business Combination to mark to market the value of the warrants upon exercise immediately prior to the Business Combination. The table below presents changes in the preferred stock warrant liability (in millions): 2021 Balance as of January 1, $ 22.9 Changes in fair value 121.6 Settlement of preferred stock warrants (144.5) Balance as of December 31, $ — Derivative Liability on Notes The embedded derivative liabilities on the previously issued and outstanding convertible promissory notes were re-valued to the then current fair value at the end of the reporting period using the income-based approach with or without a 10% discount. As of August 2, 2021, the expected time to conversion used in the final mark to market valuation was 0.0-2.6 years. The table below presents the changes in derivative liability on convertible promissory notes valued using Level 3 inputs (in millions): 2021 Balance as of January 1, $ 113.3 Initial measurement of new derivative 2.8 Changes in fair value 61.4 Settlement of derivative liability (177.5) Balance as of December 31, $ — Warrant Liability The public and private warrants (as noted in Note 15) were acquired as part of the Business Combination and are measured at fair value on a recurring basis at the end of each reporting period within accrued expenses and other liabilities in the consolidated balance sheet. The Public Warrant Liability is classified as a Level 1 fair value measurement due to the use of an observable market quote in an active market. The Company reclassified the Private Placement Warrants from Level 3 to Level 2 as of December 31, 2021, as the Company considers the fair value of each Private Placement Warrant to be equivalent to that of each Public Warrant, with an immaterial adjustment for short-term marketability restrictions. The following table presents the changes in the fair value of the warrant liability (Public Warrants and Private Placement Warrants) (in millions): 2022 2021 Balance as of January 1, $ 4.3 $ — Initial measurement of warrants — 14.6 Changes in fair value (4.0) (10.3) December 31, $ 0.3 $ 4.3 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 6. Goodwill The following table represents the changes in goodwill (in millions): Balance at January 1, 2021 $ 47.8 Additions from acquisitions 5.2 Other adjustments $ 0.5 Balance at December 31, 2021 $ 53.5 Impairment charges (53.5) Balance at December 31, 2022 $ — The Company reviews goodwill for impairment annually on October 1 and more frequently if events or changes in circumstances indicate that an impairment may exist (“a triggering event”). During the third quarter of 2022, management identified quantitative and qualitative factors that indicated a triggering event, mainly due to the sustained decrease in stock price and continued deterioration of general macroeconomic conditions. The Company performed a valuation at the reporting unit level using an income-based approach. These forecasts and assumptions are highly subjective. Given the results of the Company’s quantitative assessment, the Company determined that all the reporting units’ goodwill was impaired and the Company recorded impairment charges of $53.5 million, which are included in impairment and restructuring charges in the accompanying consolidated statements of operations and comprehensive loss. See Note 22 for additional information regarding the Company’s acquisitions including recognition of goodwill. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 7. Intangible Assets December 31, 2022 2021 Weighted- Average Useful Life Remaining (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) (in millions) Agency and carrier relationships 6.0 $ 13.5 $ (3.4) $ 10.1 $ 13.5 $ (1.7) $ 11.8 State licenses and domain name Indefinite 10.5 — 10.5 10.5 — 10.5 Customer relationships 2.3 13.7 (8.5) 5.2 13.7 (6.0) 7.7 Developed technology — — — — 3.6 (2.7) 0.9 Value of business acquired — — — — 0.1 (0.1) — Other 6.1 1.7 (0.6) 1.1 2.0 (0.7) 1.3 Total intangible assets, net $ 39.4 $ (12.5) $ 26.9 $ 43.4 $ (11.2) $ 32.2 Amortization expense related to intangible assets for the years ended December 31, 2022 and 2021 was $5.3 million and $5.7 million, respectively. The amortization expense is included in technology and development expenses for developed technology, sales and marketing expenses for customer relationships, agency relationships, carrier relationships and other. As of December 31, 2022, the projected annual amortization expense for the Company’s intangible assets for the next five years is as follows (in millions): Years Ending December 31, 2023 $ 4.3 2024 4.1 2025 2.5 2026 1.8 2027 1.8 Thereafter 1.9 Total $ 16.4 |
Capitalized Internal Use Softwa
Capitalized Internal Use Software | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
Capitalized Internal Use Software | 8. Capitalized Internal Use Software December 31, 2022 2021 (in millions) Capitalized internal use software $ 56.4 $ 34.5 Less: accumulated amortization (17.6) (8.6) Total capitalized internal use software $ 38.8 $ 25.9 Amortization expense related to capitalized internal use software for the years ended December 31, 2022 and 2021 was $9.0 million and $4.9 million, respectively. |
Other Assets
Other Assets | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | 9. Other Assets December 31, 2022 2021 (in millions) Prepaid expenses $ 17.4 $ 21.2 Claims receivable 9.0 24.4 Lease right-of-use assets 27.6 — Property and equipment 5.4 1.1 Other 4.2 5.1 Total other assets $ 63.6 $ 51.8 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | 10. Accrued Expenses and Other Liabilities December 31, 2022 2021 (in millions) Claim payments outstanding $ 27.7 $ 23.2 Lease liability 28.9 — Advances from customers 10.2 8.7 Deferred revenue 11.0 11.2 Employee related accruals 6.2 8.5 Premium refund liability 8.2 4.8 Fiduciary liability 6.6 3.7 Contingent consideration liability 11.9 11.6 Other 17.5 23.7 Total accrued expenses and other liabilities $ 128.2 $ 95.4 |
Loss and Loss Adjustment Expens
Loss and Loss Adjustment Expense Reserves | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Loss and Loss Adjustment Expense Reserves | 11. Loss and Loss Adjustment Expense Reserves The reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance is summarized as follows for the years ended December 31, (in millions): 2022 2021 Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE as of beginning of the period $ 260.8 $ 105.1 Reinsurance recoverables on unpaid losses and LAE (216.8) (92.1) Reserve for losses and LAE, net of reinsurance recoverables as of beginning of the period 44.0 13.0 Add: Incurred losses and LAE, net of reinsurance, related to: Current year 113.2 85.0 Prior years (11.8) (0.6) Total incurred 101.4 84.4 Deduct: Loss and LAE payments, net of reinsurance, related to: Current year 56.7 43.6 Prior year 23.7 9.8 Total paid 80.4 53.4 Reserve for losses and LAE, net of reinsurance recoverables at end of period 65.0 44.0 Add: Reinsurance recoverables on unpaid losses and LAE at end of period 228.8 216.8 Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE as of end of the period $ 293.8 $ 260.8 Loss development occurs when actual losses incurred vary from the Company’s previously developed estimates, which are established through the Company’s loss and LAE reserve estimate processes. Net incurred losses and LAE experienced favorable development of $11.8 million and $0.6 million for the years ended December 31, 2022 and 2021, respectively. The prior period development of $11.8 million was driven primarily by favorable net loss development relating to the 2021 accident year, resulting in a net release of $5.8 million from attritional reserves and $6.0 million from catastrophe reserves. These changes are primarily a result of ongoing analysis of claims emergence patterns and loss trends. Incurred Loss and LAE, Net of Reinsurance The following tables present information about incurred and paid loss development as of December 31, 2022, net of reinsurance, as well as cumulative claim frequency and the total of IBNR reserves. For the purpose of defining claims frequency, the number of reported claims is by loss occurrence and does not include claims that do not result in indemnification of loss. The information about incurred and paid claims development for the years ended prior to December 31, 2021 is presented as unaudited supplementary information. In addition, the following table shows incurred loss and LAE by accident year in aggregate as the Company has one single operating and reportable segment (in millions, except for number of claims): December 31, December 31, 2022 2016* 2017* 2018* 2019* 2020* 2021 2022 IBNR Cumulative Number of Reported Claims Accident Year 2016 $ 2.5 $ 1.9 $ 1.9 $ 1.8 $ 1.8 $ 1.8 $ 1.8 $ — 711 2017 5.2 5.4 4.0 4.0 4.1 4.0 — 3,071 2018 7.8 7.2 7.2 7.2 6.8 0.1 5,927 2019 4.8 4.8 4.7 4.8 — 14,943 2020 28.6 28.1 29.9 0.8 30,235 2021 76.7 63.5 4.6 40,878 2022 94.3 41.8 40,213 Total incurred Loss and Loss Adjustment Expenses, net $ 205.1 $ 47.3 135,978 * Presented as unaudited required supplementary information Cumulative Paid Loss and LAE, Net of Reinsurance December 31, 2016* 2017* 2018* 2019* 2020* 2021 2022 Accident Year 2016 $ 1.2 $ 1.8 $ 1.9 $ 1.8 $ 1.8 $ 1.8 $ 1.8 2017 3.0 4.0 4.0 4.0 4.0 4.0 2018 5.3 5.7 5.7 5.8 6.7 2019 3.2 4.4 4.6 4.7 2020 1.8 26.8 28.8 2021 35.3 55.8 2022 38.3 Total paid losses and LAE, net $ 140.1 Total unpaid loss and LAE reserves, net 65.0 Ceded unpaid loss and LAE $ 228.8 Gross unpaid loss and LAE $ 293.8 * Presented as unaudited required supplementary information Average Annual Percentage Payout of Incurred Loss By Age, Net of Reinsurance (Unaudited Supplementary Information) The following table presents the average annual percentage payout of incurred losses by age, net of reinsurance as of December 31, 2022: Years 1 2 3 4 5 Property and Casualty 56% 35% 3% 1% 5% The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and development tables with respect to the current accident year is as follows (in millions): 2022 Current Accident Year 2021 Current Accident Year Incurred Paid Incurred Paid Development table $ 94.3 $ 38.3 $ 76.7 $ 35.3 Unallocated loss adjustment expense 18.9 18.9 8.3 8.3 Other — (0.5) — — Rollforward table $ 113.2 $ 56.7 $ 85.0 $ 43.6 |
Reinsurance
Reinsurance | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Reinsurance | 12. Reinsurance The Company purchases reinsurance to help manage exposure to property and casualty insurance risks, including attritional and catastrophic risks. The Company’s insurance company subsidiaries have entered into proportional and non-proportional reinsurance treaties, under which a significant portion of the liabilities have been ceded to third-party reinsurers. The Company also assumes risk from non-affiliated insurance carriers. Proportional Reinsurance Treaties — Hippo Excellent or better by AM Best, or the reinsurance is collateralized. In 2022 the Company retained approximately 10% of the premium through the Company’s insurance company subsidiaries, including the Company’s captive reinsurance company, RHS. Additionally, the reinsurance contracts are subject to variable commission adjustments and loss participation features, including loss ratio caps and loss corridors, which align the Company’s interests with those of its reinsurers. Similar to the prior year, the Company saw increased use of loss participation features in the 2022 reinsurance agreements, which may increase the amount of losses retained by its insurance company subsidiaries in excess of the Company’s pro rata participation. The Company also seeks to further reduce its risk retention through purchases of non-proportional reinsurance described below in the section titled “Non-Proportional Reinsurance.” For the Company’s primary homeowners reinsurance treaty that commenced in 2021, the Company secured proportional reinsurance from a diverse panel of nine third-party reinsurers with AM Best ratings of “A-” or better. A total of approximately 12% of the premium was retained either by Spinnaker or RHS, which aligns interests with third-party reinsurers. Two of the reinsurers, representing approximately one-third of the programs, provided three-year agreements. Non-Proportional Reinsurance — Hippo The Company also purchases non-proportional XOL reinsurance. Through the Company’s insurance company subsidiaries, the Company is exposed to the risk of natural catastrophe events that could occur on the risks arising from policies underwritten by the Company. Other Reinsurance Spinnaker purchases reinsurance for programs written by MGAs other than Hippo. The reinsurance treaties are a mix of proportional and XOL in which approximately 75% to 100% of the risk is ceded. The reinsurance contracts are subject to variable commission adjustments and loss participation features, including loss caps, and may increase the amount of losses retained by the Company in excess of the Company’s pro-rata participation. Such provisions are recognized in the period based on the experience to date under the agreement. Spinnaker also purchases a corporate catastrophe XOL program that attaches above the reinsurance programs protecting the business written by Hippo as well as the other MGAs. This treaty has a floating retention and attaches at the exhaustion point of the underlying programs’ specific reinsurance. This program provides protection to the Company from catastrophes that could impact a large number of insurance policies underwritten by the Company or other MGAs. The Company buys XOL so that the probability of losses from a single occurrence exceeding the protection purchased is no more than 0.4%, or equivalent to a 1 in 250 year return period. This reinsurance protects us from all but the most severe catastrophic events. With all reinsurance programs, the Company’s wholly owned insurance carriers are not relieved of their primary obligations to policyholders in the event of a default or the insolvency of its reinsurers. As a result, a credit exposure exists to the extent that any reinsurer fails to meet its obligations assumed in the reinsurance agreements. To mitigate this exposure to reinsurance insolvencies, the Company evaluates the financial condition of its reinsurers and, in certain circumstances, hold substantial collateral (in the form of funds withheld, qualified trusts, and letters of credit) as security under the reinsurance agreements. No allowance has been recorded in the years ended December 31, 2022 and 2021 for amounts anticipated to be uncollectible or for the anticipated failure of a reinsurer to meet its obligations under the contracts. The following table reflects amounts affecting the consolidated statements of operations and comprehensive loss for ceded reinsurance (in millions): For the Years Ended December 31, 2022 2021 Written Premiums Earned Premiums Loss and LAE Incurred Written Premiums Earned Premiums Loss and LAE Incurred Direct $ 628.3 $ 541.1 $ 409.6 $ 474.0 $ 364.7 $ 498.5 Assumed 1.6 0.4 0.1 3.3 9.8 16.9 Gross 629.9 541.5 409.7 477.3 374.5 515.4 Ceded (580.3) (499.0) (308.3) (434.8) (335.6) (431.0) Net $ 49.6 $ 42.5 $ 101.4 $ 42.5 $ 38.9 $ 84.4 As of December 31, 2022 and December 31, 2021, a provision for sliding scale commissions of $3.5 million and $8.6 million, respectively, is included in provision for commission on the consolidated balance sheets. As of December 31, 2022 and December 31, 2021, a receivable for sliding scale commissions of $4.5 million and $2.7 million, respectively, is included in ceding commissions receivable on the consolidated balance sheets. As of December 31, 2022 and December 31, 2021, a provision for loss participation features of $51.3 million and $8.3 million, respectively, was recorded as a contra-asset in reinsurance recoverable on the consolidated balance sheets. Amounts recoverable from reinsurers are recognized in a manner consistent with the claims liabilities associated with the reinsurance placement and presented on the balance sheet as reinsurance recoverable on paid and unpaid losses and LAE. Such balance is presented in the table below (in millions). December 31, 2022 2021 Reinsurance recoverable on paid loss $ 57.5 $ 50.1 Ceded unpaid loss and LAE 228.8 216.8 Total reinsurance recoverable $ 286.3 $ 266.9 To reduce credit exposure to reinsurance recoverable and prepaid reinsurance premium balances, the Company evaluates the financial condition of its reinsurers and, in certain circumstances holds collateral in the form of funds withheld and letters of credit as security under the terms of its reinsurance contracts. The Company has the following unsecured reinsurance recoverable and prepaid reinsurance premium balances from reinsurers (in millions): December 31, AM Best Rating Reinsurer 2022 2021 A+ Everest Insurance Company $ 55.3 $ 65.7 A+ Hannover Rück SE 49.9 — A Validus Reinsurance (Switzerland) Ltd. 42.2 57.5 A+ Munich Reinsurance America, Inc. 34.3 18.3 A+ Digital Advantage Insurance Company 19.4 — A+ Partner Reinsurance Company Ltd. 18.7 — A+ Partner Reinsurance Company of the U.S. 15.0 — $ 234.8 $ 141.5 Other reinsurers 121.2 179.6 $ 356.0 $ 321.1 |
Geographical Breakdown of Gross
Geographical Breakdown of Gross Written Premium | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Geographical Breakdown of Gross Written Premium | 13. Geographical Breakdown of Gross Written Premium Gross written premium by state is as follows (in millions): Years Ended December 31, 2022 2021 Amount % of GWP Amount % of GWP State Texas $ 155.6 24.7 % $ 139.2 29.2 % California 116.3 18.5 % 85.2 17.9 % Florida 55.4 8.8 % 26.8 5.6 % Georgia 29.3 4.7 % 22.0 4.6 % Illinois 22.7 3.6 % 19.1 4.0 % Colorado 19.3 3.1 % 13.6 2.8 % Missouri 15.0 2.4 % 13.0 2.7 % Arizona 14.3 2.3 % 11.4 2.4 % Ohio 13.8 2.2 % 10.5 2.2 % New Jersey 14.0 2.2 % 10.4 2.2 % Other 174.2 27.7 % 126.1 26.4 % Total $ 629.9 100 % $ 477.3 100 % |
Convertible Promissory Notes an
Convertible Promissory Notes and Derivative Liability | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Convertible Promissory Notes and Derivative Liability | 14. Convertible Promissory Notes and Derivative Liability In November 2020, and December 2020, Old Hippo issued convertible promissory notes totaling $377.5 million that mature in November 2023, and December 2023. In February 2021, Old Hippo issued an additional convertible promissory note of $7.0 million that mature in February 2024 for management services provided. The convertible promissory notes bore interest at 2.5% compounded semi-annually. If a conversion event had not occurred, the annual interest rate would have automatically increased by 2.5% up to 7.5% after certain periods specified in the Purchase Agreement. After 15 months from issuance, if a conversion event had not occurred, interest would accrue at 5% per annum, compounding semi-annually, unless the Company filed an S-1 or signed a letter of intent or definitive agreements with respect to a qualified private round or public issuer merger, in which case the interest rate would have increased to 5% to apply after 21 months from issuance, provided a conversion on event had not occurred. With a prior written consent from the investor, the Company had the ability to repay the convertible promissory notes and interest, in whole or in part, any time in cash before the maturity date without a prepayment penalty. The convertible promissory notes contained an embedded derivative. The fair value of the embedded derivatives upon issuance of the notes was $110.0 million. Interest expense was accreted on the convertible promissory notes between issuance and maturity dates with the expectation that principal and interest are likely to be settled in shares of common stock of the Company at a variable conversion price calculated at 90% of the price of the common stock of the Company. For additional information on derivative liability, refer to Note 5, Fair Value Measurement of these consolidated financial statements. In connection with the Closing of the Business Combination on August 2, 2021, the convertible promissory notes converted into 1.8 million shares of the Company’s common stock. The carrying value of the convertible promissory notes at the conversion date was $304.0 million, net of $86.9 million of the deferred discount and issuance costs, and the carrying value of the derivative liability of $177.5 million after the final fair value adjustment on the conversion date were recorded to equity. A gain of $47.0 million was recognized upon the extinguishment of the debt and related derivative liability as the carrying amounts exceeded the value of the shares issued. |
Public Warrants and Private Pla
Public Warrants and Private Placement Warrants | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Public Warrants and Private Placement Warrants | 15. Public Warrants and Private Placement Warrants In November 2020, in connection with the RTPZ IPO, RTPZ issued 4.6 million warrants (the “Public Warrants”) to purchase its Class A ordinary shares at $287.50 per share. Concurrently, RTPZ also issued 4.4 million warrants (the “Private Placement Warrants” and, together with the Public Warrants, the “Public and Private Placement Warrants”) to its Sponsor to purchase its Class A ordinary shares at $287.50 per share. In connection with the Business Combination, the Public and Private Placement warrants converted, on a one-for-one basis, into warrants to purchase Company common stock. All of the Public and Private Placement Warrants were outstanding as of December 31, 2022. The Company classified the Public and Private Placement Warrants as other liabilities on its consolidated balance sheets as these instruments are precluded from being indexed to the Company’s own stock. In certain events outside of the Company’s control, the Public Warrant and Private Placement Warrant holders are entitled to receive cash, while in certain scenarios, the holders of the common stock are not entitled to receive cash or may receive less than 100% of any proceeds in cash, which precludes these instruments from being classified within equity. The Public and Private Placement Warrants were initially recorded at fair value on the date of the Business Combination and are subsequently adjusted to fair value at each subsequent reporting date. Changes in the fair value of these instruments are recognized within interest and other (income) expense, net in the Consolidated Statements of Operations and Comprehensive Loss. See Note 5, Fair Value Measurement for additional information on valuation. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies Purchase Commitments As of December 31, 2022, the Company has total minimum purchase commitments, which must be made during the next three years, of $11.4 million. Legal Proceedings From time to time, the Company may become involved in litigation or other legal proceedings. The Company is routinely named in litigation involving claims from policyholders. Legal proceedings relating to claims are reserved in the normal course of business. The Company does not believe it is a party to any pending litigation or other legal proceedings that is likely to have a material adverse effect on the Company’s business, financial condition or results of operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. On November 19, 2021, Hippo and Assaf Wand were named in a civil action in San Francisco Superior Court brought by Eyal Navon. Mr. Navon brings six causes of action against Mr. Wand for breach of fiduciary duty, breach of contract, promissory estoppel, fraud, negligent misrepresentation, and constructive fraud surrounding a loan and call option entered into between Innovius Capital Canopus I, L.P. (“Innovius”) and Mr. Navon, as well as alleged promises made by Mr. Wand to Mr. Navon while Mr. Navon was an employee of Hippo. Mr. Navon brings two causes of action against Hippo – he repeats the fraud claim that is alleged against the Mr. Wand, and also alleges a claim for declaratory judgment, requesting that the Court declare that Mr. Navon properly revoked the call option he entered into with Innovius. Hippo has engaged counsel to defend both Hippo and Mr. Wand. On January 20, 2022, Hippo filed a demurrer moving to dismiss the claims alleged in the complaint against Hippo, which the Court sustained with leave to amend on March 8, 2022. On May 2, 2022, Mr. Navon amended his complaint, naming Hippo in his breach of contract, promissory estoppel, negligent misrepresentation, and constructive fraud causes of action (in addition to re-pleading the declaratory relief and fraud causes of action). Hippo filed a second demurrer in response to the amended complaint, which the Court denied on July 22, 2022. The Company’s Directors & Officers insurance carrier has been notified of this result. On August 9, 2022, Hippo filed an answer to the claims contained in the amended complaint. The parties are engaged in fact discovery, and a trial date is set for November 6, 2023. Hippo intends to move for summary judgment against the claims alleged in the amended complaint. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 17. Leases Operating Leases The Company leases office space under non-cancelable operating leases with various expiration dates through 2030, some of which include options to extend the leases for up to 5 years. The Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably certain. The Company recognized operating lease expense of $5.2 million for the year ended December 31, 2022. Under ASC 840, the operating lease expense was $3.1 million for the year ended December 31, 2021. The weighted average remaining lease term and the weighted average discount rate for operating leases as of December 31, 2022 were: Weighted average remaining lease term 5.05 Weighted average discount rate 4.9% Maturities of operating lease liabilities by fiscal year as of December 31, 2022 are (in millions): Years Ending December 31, 2023 $ 6.7 2024 7.2 2025 6.7 2026 5.4 2027 2.4 Thereafter 4.6 Total undiscounted lease payments $ 33.0 Less: Imputed interest $ (4.1) Present value of lease payments $ 28.9 Supplemental cash flow information about the Company’s operating leases (in millions): For the Year Ended December 31, 2022 Cash paid for operating lease liabilities $ (4.4) Right-of-use assets obtained in exchange for new operating liabilities 15.0 |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Convertible Preferred Stock | 18. Convertible Preferred Stock Prior to December 31, 2021, Old Hippo issued Series A-1, A-2, B, C, D, and E convertible preferred stock. There were no new issuances of preferred stock during the year ended December 31, 2022, other than the exercise of preferred stock warrants noted below. Upon the Closing of the Business Combination, after the exercise of preferred stock warrants, all outstanding shares of Old Hippo’s preferred stock automatically converted into 12.9 million shares of the Company’s common stock after giving effect to the Exchange Ratio. See Note 2, Business Combinations for additional information on the Business Combination. Preferred Stock Warrant Liabilities In connection with obtaining a line of credit in March 2017, Old Hippo issued 1.1 thousand warrants to purchase Series A-2 Preferred Stock. The warrants vested immediately and were exercisable up to March 13, 2027. In connection with the issuance of Series C Preferred Stock, in October 2018, Old Hippo issued to an investor 0.1 million warrants to purchase Series C-1 Preferred Stock. The warrants are exercisable upon vesting. In April 2020, the warrants were fully vested. The warrants will expire at the earliest of a deemed liquidation event, stock sale, or October 25, 2022. In August 2021, prior to the Business Combination, the holders exercised their warrants for 0.1 million shares of Old Hippo preferred stock. After giving effect to the Exchange Ratio upon the Closing of the Business Combination, the 0.1 million shares of Old Hippo preferred stock converted into 0.7 million shares of the Company’s common stock. Warrants to purchase shares of redeemable convertible preferred stock were classified as a liability as the underlying redeemable convertible preferred stock was not considered redeemable and would have required us to transfer assets upon exercise. The warrants were recorded at fair value upon issuance and are subject to remeasurement to fair value at each subsequent balance sheet date. Prior to the Business Combination on August 2, 2021, the aggregate fair value of the preferred stock warrant liability was determined based on significant inputs not observable in the market, which represented a Level 3 measurement within the fair value hierarchy. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders’ Equity | 19. Stockholders’ Equity Common Stock On August 2, 2021, the Company’s common stock and warrants began trading on the New York Stock Exchange (“NYSE”) under the ticker symbols “HIPO” and “HIPO.WS”, respectively. Pursuant to Certificate of Incorporation, the Company is authorized to issue 80 million shares of common stock, with a par value of $0.0001 per share. Each share of common stock is entitled to one vote. The holders of the common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors. No dividends have been declared or paid since inception. As described in Note 2, Business Combinations, the Company issued 19.8 million shares of the Company’s common stock in the Business Combination. The below table shows the conversion of Old Hippo’s outstanding instruments on the date of the Closing that were converted, exercised, or issued as stock consideration. Description Balance outstanding prior to the Business Combination Exchange Ratio Post Conversion Balances Old Hippo common stock 637,636 6.95433 4,434,337 Old Hippo convertible preferred stock 1,759,407 6.95433 12,235,497 Old Hippo convertible promissory notes 249,912 6.95433 1,737,972 Old Hippo preferred stock warrants 99,764 6.95433 693,796 Old Hippo common stock warrants 156,463 6.95433 1,088,102 20,189,704 Less: Repurchase of common stock (380,000) Net Old Hippo shares consideration 19,809,704 In connection with the Closing of the Business Combination on August 2, 2021, the Company issued 2,200,000 shares of Common Stock in the PIPE Investment to certain qualified institutional buyers and accredited investors that agreed to purchase such shares, for aggregate consideration of $550.0 million. Refer to Note 2, Business Combinations for more information. Common Stock Warrants In December 2017, the Company issued 0.2 million warrants for common stock to one of its investors. The warrants were subject to performance vesting and are accounted for as stock-based compensation expense when it is probable that the awards will vest. In October 2018 in connection with the issuance of Series C Preferred Stock, these warrants were amended to eliminate the performance vesting conditions and replace it with a time-based condition. Up until the amended date, none of the warrants were probable of being vested and no expense had been recorded. The fair value of the warrant upon the amendment was allocated to additional paid-in capital as part of the issuance of Series C Preferred Stock, net of issuance costs and preferred stock warrants. In February 2018, the Company issued 0.2 million warrants for common stock to one of its investors. The warrants are subject to performance vesting and is accounted for as stock-based compensation expense when it is probable that the awards will vest. In December 2020, these warrants were amended, and 2.5 thousand warrants were vested. As a result of the modification, the Company recorded a stock-based compensation charge of $1.0 million to reflect the acceleration of 2.5 thousand shares that would otherwise not have vested. Up until the amended date, none of the remaining warrants were probable of being vested and no expense had been recorded. On August 2, 2021, 0.2 million warrants were exercised for shares of Old Hippo common stock and the remaining 0.2 million warrants were cancelled. After giving effect to the Exchange Ratio and upon the Closing of the Business Combination, the exercised warrants converted into 1.1 million shares of Hippo Holdings Inc. common stock. Stock-Based Compensation Plans 2019 Stock Option and Grant Plan Adopted in 2019, the 2019 Stock Option and Grant Plan (“the 2019 Stock Plan”) provides for the direct award or sale of shares, the grant of options to purchase shares, and the grant of restricted stock units (“RSUs”) to employees, consultants, and outside directors of the Company. Stock options under the plan may be either incentive stock options (“ISOs”) or non-qualified stock options (“NSOs”), with an exercise price of not less than 100% of fair market value on the grant date, with a term less than or equal to ten years. The vesting period of each option and RSU shall be as determined by a committee of the Company’s board of directors but is generally over four years. Upon the closing of the Business Combination, the remaining unallocated share reserve under the 2019 Plan was cancelled and no new awards will be granted under such plan. Awards outstanding under the 2019 Plan were assumed by the Company upon the Closing and continue to be governed by the terms of the 2019 Plan. 2021 Incentive Award Plan In connection with the Closing of the Business Combination, on August 2, 2021, the Company adopted the 2021 Incentive Award Plan (the “2021 Plan”), which authorized for issuance 3.1 million shares of common stock. The 2021 Plan provides for the issuance of a variety of stock-based compensation awards, including stock options, stock appreciation rights (“SARs”), restricted stock awards, restricted stock unit awards, performance bonus awards, performance stock unit awards, dividend equivalents, or other stock or cash-based awards. The vesting period of each option and award shall be as determined by a committee of the Company’s board of directors but is generally over two This reserve increases on January 1 of each year through 2031, by an amount equal to the smaller of: (i) 5% of the number of shares of common stock issued and outstanding on the last day of the immediately preceding fiscal year, or (ii) an amount determined by the board of directors. Stock Options The following table summarizes option activity under the plans: Options Outstanding Weighted-Average Remaining Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Contract Term Outstanding as of January 1, 2021 2,888,211 $ 18.76 8.9 $ 108.9 Granted 387,421 120.37 — — Exercised (913,892) 12.10 — 38.9 Cancelled/Expired (460,576) 51.24 — 13.9 Outstanding as of December 31, 2021 1,901,163 $ 33.05 8.3 $ 84.8 Granted 625,578 45.07 — — Exercised (145,525) 13.80 — 3.7 Cancelled/Expired (394,238) 41.61 — 2.2 Outstanding as of December 31, 2022 1,986,978 $ 36.54 7.8 $ 1.3 Vested and exercisable as of December 31, 2022 1,060,363 $ 30.34 7.4 $ 1.2 The aggregate intrinsic value of options exercised during the years ended December 31, 2022 and 2021 was $3.7 million and $38.9 million, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date. The weighted-average grant date fair value of options granted during the years ended December 31, 2022 and 2021 was $15.24 and $56.00 per share, respectively. Total unrecognized compensation cost of $18.5 million as of December 31, 2022 is expected to be recognized over a weighted-average period of 1.5 years. Valuation Assumptions of Stock Options The fair value of granted stock options was estimated as of the date of grant using the Black-Scholes-Merton option-pricing model, based on the following inputs: December 31, 2022 2021 Expected term (in years) 5.0 - 6.7 5.4 - 6.5 Expected volatility 29.6% - 30.9% 29.6% - 30.1% Risk-free interest rate 2.7% - 3.0% 0.6% - 1.4% Expected dividend yield — % — % Expected Term – The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. The Company has opted to use the simplified method for estimating the expected term of options. Accordingly, the expected term equals the arithmetic average of the vesting term and the original contractual term of the option (generally 10 years). Expected Volatility – Due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of peer companies that are publicly traded. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the stock-based awards. Risk-Free Interest Rate – The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the grant’s expected term. Expected Dividend Yield – The Company has never paid dividends and does not currently expect to pay dividends. Fair value of common stock – Prior to contemplating a public market transaction, the Company established the fair value of common stock by using the option pricing model (Black-Scholes Model based) via the back-solve method and through placing weight on previously redeemable preferred stock transactions. On ce the Company made intentional progress toward pursuing a public market transaction, it began applying the probability-weighted expected return method to determine the fair value of its common stock. The probability weightings assigned to certain potential exit scenarios were based on management’s expected near-term and long-term funding requirements and assessment of the most attractive liquidation possibilities at the time of the valuation. Subsequent to the Business Combination, the Company determined the value of its common stock based on the observable daily closing price of its common stock (ticker symbol “HIPO”). Early Exercises of Stock Options In 2019, certain employees early exercised stock options in exchange for promissory notes. The Company accounted for the promissory notes as nonrecourse in their entirety because the promissory notes are not aligned with a corresponding percentage of the underlying shares. The early exercises of options were not deemed to be substantive exercises for accounting purposes. Each of these loans and all interest accrued thereon was forgiven upon the consummation of the Business Combination. The forgiveness of the promissory notes were deemed to be exercises of the 0.4 million stock options with an intrinsic value of $94.0 million on the date of forgiveness. The Company accounted for the forgiveness as a modification to the options granted and incurred an immediate incremental stock-based compensation charge of $2.1 million duri ng the year ended December 31, 2021. The unvested shares subject to repurchase fully vest in 2023. In 2020 and 2021, certain employees early exercised stock options with cash. On December 31, 2022 and December 31, 2021, the Company had $1.4 million and $2.2 million, respectively, recorded in accrued expenses and other liabilities related to early exercises of the stock options, and the related number of unvested shares subject to repurchase was 0.1 million and 0.1 million, respectively. On March 1, 2023, the Board approved a one-time repricing of certain stock option awards that had been granted to date. The repricing will impact out-of-the-money stock options held by all employees who remain employed through March 6, 2023 (the “Repricing Date”), including our executive officers. Each stock option will be repriced to have a per share exercise price equal to the closing price of the Company’s Common Stock on the Repricing Date. There were no changes to the number of shares, the vesting schedule or the expiration date of the repriced stock options, except for the exercise price premium for the Company’s executive officers as described further below. For our C-level employees, each such employee who had their stock options repriced in accordance with the above will have a premium on the exercise price of their options in effect until the first anniversary of the Repricing Date (the “Premium End Date”), whereby in in the event the applicable employees (i) exercises his/her stock options prior to the Premium End Date or (ii) does not provide services to the Company as an employee or as a consultant through the Premium End Date, the exercise price applicable to the Premium Shares will be two times the closing price of the Company’s Common Stock on the Repricing Date. Restricted Stock Units and Performance Restricted Stock Units The Company grants service based RSUs and performance based RSUs (“PRSUs”) as part of the Company’s equity compensation plans. The Company measures RSU and PRSU expense for awards granted based on the estimated fair value of those awards at grant date. To estimate the fair value of PRSUs containing a market condition, the Company uses the Monte Carlo valuation model. The fair value of all other awards is based on the closing price of the Company’s common stock as reported on the NYSE on the date of grant. The RSUs generally vest over a period of two one Stock-based compensation expense for RSUs are recognized based on the straight-line basis over the employee requisite service period. Stock-based compensation expense for PRSUs are recognized on a graded accelerated basis over the employee requisite service period. The Company accounts for forfeitures as they occur. During the year ended December 31, 2022, the Company granted 1.1 million PRSUs. Half of the PRSUs granted are subject to the achievement of market-based performance goals and the remaining PRSUs subject to vesting pursuant to internal financial measures. The actual number of units that ultimately vest will range from 0% to 100% of the granted amount, based on the level of achievement of the performance goals and continued employment with the Company. The following table presents the assumptions utilized in the Monte Carlo valuation model for market-based awards for the period indicated: December 31, 2022 Expected term (in years) 4.1 Expected volatility 95.0 % Risk-free interest rate 2.9 % Expected dividend yield — % The following table summarizes the RSU and PRSU activity for the year ended December 31, 2022: Number of Shares Weighted Average Grant-Date Fair Value per Share Unvested and outstanding as of December 31, 2020 — $ — Granted 1,208,279 99.83 Vested (7,505) 100.01 Canceled and forfeited (35,203) 99.19 Unvested and outstanding as of December 31, 2021 1,165,571 $ 99.85 Granted 2,829,774 30.49 Vested (444,105) 87.10 Canceled and forfeited (669,256) 67.89 Unvested and outstanding as of December 31, 2022 2,881,984 $ 41.15 Total unrecognized compensation cost of unvested RSUs and PRSUs is $99.8 million as of December 31, 2022,and it is expected to be recognized over a weighted-average period of 2.3 years. 2021 Employee Stock Purchase Plan In connection with the closing of the Business Combination, the Company adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which authorized 0.5 million shares of common stock for issuance. The 2021 ESPP became effective on October 25, 2021. The 2021 ESPP is designed to allow eligible employees of the Company to purchase shares of common stock with their accumulated payroll deductions at a price equal to 85% of the lesser of the fair market value on the first business day of the offering period or on the designated purchase date of the offering period up to $25,000 during the calendar year. The ESPP offers a six-month look-back feature as well as an automatic reset feature that provides for an offering period to be r eset to a new lower-priced offering if the offering price of the new offering period is less than that of the current offering period. During the year ended December 31, 2022 and 2021, 0.1 million and nil shares were issued under the plan, respectively. In ad dition, the number of shares available for issuance under the 2021 ESPP will be annually increased on January 1 of each calendar year beginning in 2021 and ending in 2031, by an amount equal to the lesser of (i) one percent of the shares outstanding (on a converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares as may be determined by the board of directors. Stock-Based Compensation The company recorded a modification charge of $2.6 million in 2021 relating to the cancellation of options granted to an executive officer of the Company without replacement. Total stock-based compensation expense, classified in the accompanying consolidated statements of operations and comprehensive loss was as follows (in millions): Years Ended December 31, 2022 2021 Losses and loss adjustment expenses $ 2.6 $ 0.6 Insurance related expenses 5.4 1.1 Technology and development 19.2 6.8 Sales and marketing 13.7 5.0 General and administrative 21.0 10.8 Total stock-based compensation expense $ 61.9 $ 24.3 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 20. Income Taxes Income tax expense The Company and its U.S. subsidiaries file a consolidated federal income tax return. Tax liabilities and benefits realized by the consolidated group are allocated on a separate return basis. The Company’s international subsidiaries file various income tax returns in their respective jurisdictions. Income (loss) before tax consists of the following (in millions): Year Ended December 31, 2022 2021 United States $ (333.5) $ (371.3) Foreign 1.4 0.6 Loss before income taxes attributable to Hippo $ (332.1) $ (370.7) Income before tax attributable to noncontrolling interests 6.9 3.5 Loss before income taxes $ (325.2) $ (367.2) The components of the total provision for income taxes are as follows (in millions): Year Ended December 31, 2022 2021 Loss before income taxes attributable to Hippo $ (332.1) $ (370.7) Income tax benefit from statutory rate (69.8) (77.9) Effect of: Meals, entertainment & parking 0.2 0.1 Deferred compensation 6.6 27.8 Transaction costs — 0.1 State taxes (9.0) (7.2) Non-deductible interest — 5.5 Goodwill impairment 8.0 — Increase in valuation allowance 66.8 53.4 Foreign taxes 1.2 0.5 Other (2.7) (1.6) Income taxes expense $ 1.3 $ 0.7 The components of the provision for income taxes are as follows (in millions): Year Ended December 31, 2022 2021 Income tax applicable to: Current State $ 0.1 $ 0.2 Foreign 1.2 0.5 Total current provision $ 1.3 $ 0.7 Deferred Federal $ — $ — State — — Total deferred provision $ — $ — Total provision for income taxes $ 1.3 $ 0.7 Deferred tax Significant components of the Company’s deferred tax assets and liabilities are as follows (in millions): As of December 31, 2022 2021 Deferred tax assets: Net operating loss carryforward $ 127.7 $ 87.4 Intangible assets 8.5 3.5 Research and development credit 6.7 2.4 Deferred compensation 6.2 2.2 Unearned premium reserve 1.6 1.2 Loss reserve discount 0.8 0.6 Unrealized losses 1.7 0.2 Lease liability 5.6 3.7 Deferred revenue 4.3 — Capitalized software 5.8 — Other accruals 0.7 3.5 Total deferred tax assets $ 169.6 $ 104.7 Valuation allowance (161.5) (93.2) Total deferred income tax assets $ 8.1 $ 11.5 Deferred tax liabilities Property and equipment $ 0.5 $ 0.3 Provision for commission slide and cancellation 0.2 0.2 Capitalized software — 6.1 Acquired intangibles — 0.2 Deferred acquisition costs 1.7 0.9 Right-of-use asset 5.4 3.5 Other 0.3 0.3 Total deferred tax liabilities $ 8.1 $ 11.5 Deferred income tax assets, net $ — $ — Valuation Allowance Recognition of deferred tax assets is appropriate when realization of these assets is more likely than not. Based upon the weight of all available evidence, with primary focus on the Company’s history of recent losses, the Company has concluded that it is not more likely than not that the recorded deferred tax assets will be realized. As a result, the Company has recorded a full valuation allowance against its net deferred tax assets recorded as of December 31, 2022 and 2021. Unrecognized Tax Benefits The Company recognizes the tax benefit of tax positions taken in the consolidated financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the tax technical merits of the position. The tax benefit of a position that meets this standard is measured at the largest amount of benefit that is expected to be more likely than not to be realized on settlement. A liability is established for the difference between the tax benefit of positions taken in a tax return and the tax benefit of tax positions recognized in the consolidated financial statements. Below is a reconciliation of unrecognized tax benefits (in millions): Years Ended December 31, 2022 2021 Beginning unrecognized tax benefits $ 1.1 $ — Increases related to tax positions from prior years 0.7 — Increases related to tax positions taken in the current year 1.1 1.1 Ending unrecognized tax benefits $ 2.9 $ 1.1 The balances at December 31, 2022 and 2021 were fully offset by a valuation allowance. No interest or penalties were incurred during the years ended December 31, 2022 or 2021. As of December 31, 2022, there were no material positions for which the Company believes it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase or decrease within the next twelve months. Net Operating Losses As of December 31, 2022, the Company has U.S. federal and state net operating loss (“NOL”) carryforwards of $540.5 million and $223.0 million, respectively. The Company has $93.7 million of Dual Consolidated Losses in RHS, a 953(d) company. The provisions of the Tax Cuts and Jobs Act of 2017 eliminated the 20-year carryforward period and made it indefinite for federal NOLs generated in tax years after December 31, 2017. For such amounts generated prior to 2018, the 20-year carryforward periods continue to apply. In general, a corporation’s ability to utilize its NOL carryforwards may be subject to a substantial limitation due to ownership changes that may have occurred or that could occur in the future, as required by section 382 of the Internal Revenue Code of 1986 (the “Code”), as amended, as well as similar state provisions. These ownership changes may limit the amount of NOL and research & development (“R&D”) credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by section 382 of the Code, results from transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the capital (as defined) of a company by certain stockholders or public groups. The Company has performed a section 382 analysis and experienced two historical ownership changes in 2016 and 2018, and the Company’s tax attributes subject to such limitations under section 382 have been considered. Components of the NOL carryforwards are as follows (in millions): Indefinite 20-year Carryforward Carryforward Expires in 2035 - 2042 Period Total U.S. Federal $ 102.8 $ 437.7 $ 540.5 U.S. State 223.0 — 223.0 Balance as of December 31, 2021 $ 325.8 $ 437.7 $ 763.5 Tax credit carryforwards As of December 31, 2022, the Company has U.S. federal R&D credit carryforwards of $6.1 million, which have a 20-year carryforward and expire 2038-2042, as well as state R&D credit carryforwards of $4.4 million, which have an indefinite carryforward period. Taxing Authority Audits The Company’s income tax returns are subject to federal and state tax examinations. There are no pending tax examinations as of December 31, 2022. For U.S. federal purposes, the Company is open to examination for the |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share Attributable to Common Stockholders | 21. Net Loss Per Share Attributable to Common Stockholders Net loss per share attributable to common stockholders was computed as follows: Years Ended December 31, 2022 2021 Numerator: Net loss attributable to Hippo – basic and diluted (in millions) $ (333.4) $ (371.4) Denominator: Weighted-average shares used in computing net loss per share attributable to Hippo — basic and diluted 22,747,101 10,886,757 Net loss per share attributable to Hippo — basic and diluted $ (14.66) $ (34.11) Potential dilutive securities that were not included in the diluted loss per share calculations because they would be anti-dilutive were as follows: December 31, 2022 2021 Outstanding options 1,986,978 1,901,163 Warrants to purchase common shares 360,000 360,000 Common stock subject to repurchase 76,364 200,319 RSU and PRSUs 2,881,984 1,165,571 Total 5,305,326 3,627,053 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | 22. Acquisitions On August 31, 2021, the Company acquired a software development and engineering consulting firm for the aggregate purchase price of $7.8 million, consisting of cash and equity. The acquisition has been accounted for as a business combination under ASC 805 and was made to further strengthen the Company’s technology and development capabilities. Of the total purchase consideration, $5.3 million has been recorded to goodwill, $0.5 million to acquired intangible assets, and $2.0 million to net working capital. The Company incurred $0.4 million in acquisition related costs which were recognized as general and administrative expenses in the accompanying consolidated statements of operations and comprehensive income (loss). |
Statutory Financial Information
Statutory Financial Information | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Statutory Financial Information | 23. Statutory Financial Information The Company’s insurance subsidiaries are subject to insurance laws and regulations in the jurisdictions in which they operate. U.S. state insurance laws and regulations prescribe accounting practices for determining statutory net income and capital and surplus for insurance companies. In addition, state regulators may permit statutory accounting practices (SAP) that differ from prescribed practices. The principal differences between SAP and GAAP as they relate to the financial statements of the Company’s insurance subsidiaries are (a) policy acquisition costs are expensed as incurred under SAP, whereas they are deferred and amortized under GAAP, (b) certain assets are not admitted for purposes of determining surplus under SAP, (c) investments in fixed income securities are carried at amortized cost under SAP whereas such securities are carried at fair value under GAAP , and (d) the criteria for recognizing net DTAs and the methodologies used to determine such amounts are different under SAP and GAAP. Risk-Based Capital (“RBC”) requirements promulgated by the National Association of Insurance Commissioners require property/casualty insurers to maintain minimum capitalization levels determined based on formulas incorporating various business risks of the insurance subsidiaries. As of December 31, 2022 and 2021, the Company’s insurance subsidiaries capital and surplus exceeds its authorized control level. The statutory net income and statutory capital and surplus of the Company’s insurance subsidiaries in accordance with regulatory accounting practices were as follows (in millions): Statutory Net Income (Loss) Statutory Capital and Surplus 2022 2021 2022 2021 U.S. insurance subsidiaries $ 1.0 $ (0.5) $ 164.9 $ 131.8 International insurance subsidiary (35.8) (54.7) 26.9 7.7 Total $ (34.8) $ (55.2) $ 191.8 $ 139.5 |
Dividend Restrictions
Dividend Restrictions | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Dividend Restrictions | 24. Dividend Restrictions Spinnaker Insurance Company The maximum amount of dividends that can be paid by an Illinois-domiciled property and casualty insurance company without prior approval of the Illinois Insurance Commissioner in a 12 month period, measured retrospectively from the date of payment, is the greater of (1) ten percent (10%) of surplus as regards policyholders as of December 31 of the preceding year; or (2) the net income of such insurer as of December 31 of the preceding year, provided unassigned funds (surplus) exceeds zero following payment of such dividends. At December 31, 2022 and 2021, $14.7 million and $11.7 million was available for the payment of dividends without prior approval of the Illinois Department of Insurance, respectively. Spinnaker Specialty Insurance Company (“SSIC”) and Mainsail Insurance Company (“MIC”) The maximum amount of dividends that can be paid by a Texas-domiciled property and casualty insurance company without prior approval of the Texas Insurance Commissioner in a 12 month period, measured retrospectively from the date of payment, is the greater of (1) ten percent (10%) of surplus as regards policyholders as of December 31, 2022; or (2) the net income of such insurer as of December 31, 2022. At December 31, 2022, surplus as regards policyholders for SSIC and MIC was $50.5 million and $15.1 million respectively. Net income was $0.3 million and $0.1 million for SSIC and MIC respectively, for the year ended December 31, 2022. At December 31, 2021, surplus as regards policyholders for SSIC and MIC was $47.0 million and $10.0 million respectively. Net income was nil for SSIC and MIC for the year ended December 31, 2021. RH Solutions Insurance (Cayman) Ltd. |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | The consolidated financial statements and accompanying notes of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”). The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries where it has controlling financial interests, and any variable interest entities for which the Company is deemed to be the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. As a result of the Business Combination, which was completed on August 2, 2021, prior period share and per share amounts presented in the accompanying Consolidated Financial Statements and these related notes have been converted in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. Refer to Note 2 for additional information. Reverse Stock Split On September 29, 2022, the Company filed a Certificate of Amendment to its Certificate of Incorporation to effect a one-for-25 reverse stock split of the Company’s common stock and a corresponding adjustment to its authorized capital stock (the “Reverse Stock Split”), effective as of 11:59 p.m. Eastern Daylight Time on September 29, 2022 (the “Effective Time”). All share and per share information has been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented, unless otherwise indicated. As a result of the Reverse Stock Split, every 25 shares of the Company’s issued and outstanding common stock were automatically converted into one share of issued and outstanding common stock. No fractional shares were issued as a result of the Reverse Stock Split. Stockholders who otherwise would have been entitled to receive fractional shares of common stock were entitled to receive cash in an amount equal to the product obtained by multiplying (a) the closing price per share of the common stock as reported on the New York Stock Exchange as of the first trading day following the Effective Time, by (b) the fraction of one share owned by the stockholder. Proportionate adjustments were made to the number of shares issuable upon the exercise or vesting of all stock options, restricted stock, restricted stock units or other stock-based awards or rights (the “Stock-Based Awards”) and warrants outstanding at the Effective Time, as well as certain performance goals applicable to certain of Stock-Based Awards, which resulted in a proportional decrease in the number of shares of the Company’s common stock reserved for issuance upon exercise or vesting of such Stock-Based Awards and warrants, and, in the case of stock options, purchase rights outstanding under the Company’s 2021 Employee Stock Purchase Plan and warrants, a proportional increase in the exercise price of such stock options, purchase rights and warrants. In addition, the number of shares reserved for issuance under the Company’s 2021 Incentive Award Plan and 2021 Employee Stock Purchase Plan were proportionately reduced. |
Use of Estimates | The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant items subject to such estimates and assumptions include, but are not limited to, loss and loss adjustment expense (“LAE”) reserves, provision for commission slide and cancellations, reinsurance recoverable on paid and unpaid losses and LAE, the fair values of investments, stock-based awards, warrant liabilities, contingent consideration liabilities, acquired intangible assets and goodwill, deferred tax assets and uncertain tax positions, and revenue recognition. The Company evaluates these estimates on an ongoing basis. These estimates are informed by experience and other assumptions that the Company believes are reasonable under the circumstances. Actual results may differ significantly from these estimates. |
Business Combinations | The Company accounts for acquisitions of entities or asset groups that qualify as businesses using the acquisition method of accounting in accordance with ASC 805, Business Combinations. Purchase consideration is allocated to the tangible and intangible assets acquired and liabilities assumed based on the estimated fair values as of the acquisition date, which are measured in accordance with the principles outlined in ASC 820, Fair Value Measurement. The determination of fair value requires management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature. The excess of the total purchase consideration over the fair value of the identified net assets acquired is recognized as goodwill. The results of the acquired businesses are included in the results of operations beginning from the date of acquisition. Acquisition-related costs are expensed as incurred. During the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to the allocation of purchase consideration and to the fair values of assets acquired and liabilities assumed to the extent that additional information becomes available. After this period, any subsequent adjustments are recorded in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Business Combination on August 2, 2021 was accounted for as a reverse recapitalization. See Note 2 for additional information. |
Segment Information | The Company’s chief operating decision maker reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. As such, the Company has a single operating and reportable segment structure. Primarily all the Company’s long-lived assets are in the United States. |
Cash, Cash Equivalents, and Restricted Cash | Cash consists of cash on deposit. The Company considers all highly liquid securities readily convertible to cash, that mature within three months or less from the original date of purchase to be cash equivalents. The Company’s restricted cash relates to cash restricted to support issued letter of credits and collateral to insurers. The Company’s restricted cash also includes fiduciary assets. |
Fiduciary Assets and Liabilities | In its capacity as an insurance agent and broker, the Company collects premiums from insureds and, after deducting its commission, remits the premiums to the respective insurers. The Company also processes claims on behalf of insurers and collects claims from insurers on behalf of insureds. Premiums collected from insureds but not yet remitted to insurance companies and claims collected from insurance companies but not yet remitted to insureds are fiduciary assets. Fiduciary assets are recorded within restricted cash in the Company’s consolidated balance sheets. Unremitted insurance premiums and claims held in a fiduciary capacity and the obligation to remit these funds is recorded as fiduciary liabilities within accrued expenses and other liabilities in the consolidated balance sheets. |
Investments | The Company has categorized its investment portfolio as available-for-sale and has reported the portfolio at fair value, adjusted for other-than-temporary declines in fair value, with unrealized gains and losses, net of tax, reported as an amount in other comprehensive loss. Fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Amortization of premium and accretion of discount are computed using the scientific method (constant yield to worst). Realized gains and losses are determined using specific identification method and included in the determination of income. Net investment income includes interest and dividend income, amortization and accretion of investment premiums and discounts, respectively, realized gains and losses on sales of securities, and other-than-temporary declines in the fair value of securities, if any. The Company reviews all securities with unrealized losses on a quarterly basis to assess whether the decline in the securities fair value necessitates the recognition of an allowance for credit losses. Factors considered in the review include the extent to which the fair value has been less than amortized cost, and current market interest rates and whether the unrealized loss is credit-driven or a result of changes in market interest rates. The Company also considers factors specific to the issuer including the general financial condition of the issuer, the issuers industry and future business prospects, any past failure of issuer to make scheduled interest or principal payments, and the payment structure of the investment and the issuers ability to make contractual payments on the investment. The Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery of its amortized cost. When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs, and potential sales of investments to capitalize on favorable pricing. For fixed-maturity securities where a decline in fair value is below the amortized cost basis and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, a credit-loss charge is recognized in net income based on the fair value of the security at the time of assessment. For fixed-maturity securities that the Company has the intent and ability to hold, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the impairment, which is recognized in net income through an allowance for credit losses. Any remaining decline in fair value represents the noncredit portion of the impairment, which is recognized in other comprehensive income. The Company did not identify any available-for-sale securities as of December 31, 2022 which presented a risk of loss due to credit deterioration of the security. |
Fair Value of Financial Instruments | The Company applies fair value accounting for all financial assets and liabilities and non-financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions, and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 — Quoted prices in active markets for identical assets or liabilities that are publicly accessible at the measurement date. • Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The Company’s financial instruments include cash equivalents, restricted cash, fixed maturities, short-term investments, accounts receivable, accounts payable, assumed and ceded reinsurance contracts, preferred stock warrants and public and private warrants. Cash equivalents and restricted cash are principally stated at amortized cost, which approximates their fair value. Short-term investments and preferred stock warrants are reported at fair value. The recorded carrying amount of accounts receivable, assumed and ceded reinsurance contracts, and accounts payable approximates their fair value due to their short-term nature. |
Concentration of Credit Risks | Financial instruments that potentially subject the Company to concentrations of credit risk are primarily comprised of cash and cash equivalents, short-term investments, fixed maturities available-for-sale, and reinsurance recoverables. Cash deposits may, at times, exceed amounts insured by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. However, its exposure to credit risk in the event of default by the financial institutions is limited to the extent of amounts recorded on the consolidated balance sheet. The Company performs evaluations of the relative credit standing of these financial institutions to limit the amount of credit exposure. The Company has not experienced any losses on its deposits of cash and cash equivalents to date. The Company limits its exposure to credit losses by investing in money market funds, U.S. government securities, or securities with average credit quality of AA- or better. Premium receivables are a mix of receivables due from policyholders, agents, and program administrators. The Company has no significant off-balance-sheet concentration of credit risks such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. The Company enters into quota share and excess of loss contracts which may be susceptible to catastrophe exposure. The ceding of insurance does not legally discharge the Company from its primary liability for the full amount of the policy coverage, and therefore the Company will be required to pay the loss and bear collection risk if the reinsurer fails to meet its obligations under the reinsurance agreement. To minimize exposure to significant losses from reinsurance insolvencies, the Company evaluates the financial condition of its reinsurers, monitors concentrations of credit risk and, in certain circumstances, holds substantial collateral (in the form of funds withheld and letters of credit) as security under the reinsurance agreements. |
Accounts Receivable | Accounts receivable consists of premium receivables and commission receivables and is reported net of an allowance for premium amounts or estimated uncollectible commission. Generally premiums and commissions are collected prior to providing coverage, minimizing the Company’s exposure to credit risk. Premiums and commissions receivable are short-term in nature and due within a year. The Company has established an allowance for uncollectible premiums and commissions related to credit risk, which it reviews on a quarterly basis. In its review, the Company considers length of collection periods, the creditworthiness of the insured, economic environment, specific regulatory developments and other relevant factors. Amounts deemed to be uncollectible are written off against the allowance. |
Reinsurance | Reinsurance recoverable, including amounts related to incurred but not reported claims (“IBNR”), represent paid losses and LAE and reserves for unpaid losses and LAE ceded to reinsurers that are subject to reimbursement under reinsurance treaties. To minimize exposure to losses related to a reinsurer’s inability to pay, the financial condition of such reinsurer is evaluated initially upon placement of the reinsurance and periodically thereafter. In addition to considering the financial condition of a reinsurer, the collectability of the reinsurance recoverable is evaluated based upon a number of other factors. Such factors include the amounts outstanding, length of collection periods, disputes, any collateral or letters of credit held and other relevant factors. Historically, the Company has not experienced any credit losses from reinsurance recoverables as of December 31, 2022 and 2021 respectively. The Company evaluates its reinsurance recoverables on a quarterly basis for risk of loss due to credit deterioration, including evaluating historical collection trends, reinsurer credit ratings, and other economic factors that may affect collectability of its reinsurance receivables due to credit deterioration To the extent that an allowance for uncollectible reinsurance recoverable is established, amounts deemed to be uncollectible would be written off against the allowance for estimated uncollectible reinsurance recoverable. The Company currently has no material allowance for uncollectible reinsurance recoverable. Ceded premium written is recorded in accordance with the applicable terms of the reinsurance contracts and ceded premium earned is charged against revenue over the period of the reinsurance contracts. Ceded losses incurred reduce net loss and LAE incurred over the applicable periods of the reinsurance contracts with third-party reinsurers. Loss participation features in the reinsurance agreements are estimated at each reporting period and recorded as an adjustment to loss and LAE. Commission slide features in the reinsurance agreements are estimated at each reporting period and recorded as an adjustment to commission income, net. For ceded reinsurance, risk transfer requirements must be met for reinsurance accounting to apply. If risk transfer requirements are not met, the contract is accounted for as a deposit, resulting in the recognition of cash flows under the contract through a deposit asset or liability and not as revenue or expense. To meet risk transfer requirements, a reinsurance contract must include both insurance risk, consisting of both underwriting and timing risk, and a reasonable possibility of a significant loss for the assuming entity. Similar risk transfer criteria are used to determine whether directly written insurance contracts should be accounted for as insurance or as a deposit. Prepaid reinsurance premiums represents the unearned portion of premiums ceded to reinsurers. Amounts recoverable from reinsurers are estimated in a manner consistent with the liability associated with the reinsured business and consistent with the terms of the underlying contract. |
Deferred Policy Acquisition Costs, net of Ceding Commissions | Incremental direct costs of acquiring insurance contracts and certain costs related directly to the acquisition process are deferred within other assets on the consolidated balance sheets and amortized over the term of the policies or reinsurance treaties to which they relate. Those costs include commissions, premium taxes, and board and bureau fees. Ceding commissions relating to reinsurance agreements are recorded as a reimbursement for both deferrable and non-deferrable acquisition costs. The portion of the ceding commission that is equal to the pro-rata share of acquisition costs based on quota share percentage is recorded as an offset to the direct deferred acquisition costs. Any portion of the ceding commission that exceeds the deferrable acquisition costs of the business ceded is recorded as a deferred liability and amortized over the same period in which the related premiums are earned. The amortization of deferred policy acquisition costs is included in insurance related expenses on the consolidated statements of operations and comprehensive loss. |
Premium Deficiency | A premium deficiency is recognized if the sum of expected losses and LAE, unamortized acquisition costs, and policy maintenance costs exceeds the remaining unearned premiums. A premium deficiency would first be recognized by charging any unamortized acquisition costs to expense to the extent required to eliminate the deficiency. If the premium deficiency was greater than unamortized acquisition costs, a liability would be accrued for the excess deficiency. The Company considers anticipated investment income when determining if a premium deficiency exists. |
Property and Equipment | Property and equipment is stated at cost, net of accumulated depreciation and is reflected within other assets on the consolidated balance sheets. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful life of three years for furniture, fixtures, and equipment and two years for computer equipment. Leasehold improvements are also depreciated using the straight-line method and are amortized over the shorter of the remaining term of the lease or the useful life of the improvement.Expenditures for improvements are capitalized, and expenditures for maintenance and repairs are expensed as incurred. Upon sale or retirement, the cost and related accumulated depreciation is removed from the related accounts, and the resulting gain or loss, if any, is reflected in interest and other expense in the consolidated statements of operations and comprehensive loss. |
Leases | Leases arise from contractual obligations that convey the right to control the use of an identified property, plant or equipment for a stated time period in exchange for consideration. The Company determines if an arrangement is, or contains a lease at contract inception. Lease classification is determined at the lease commencement date, on which the leased assets are available for the Company’s use. The Company recognizes a right-of-use asset (“ROU”) and a corresponding lease liability at commencement date for operating leases. ROU assets are presented under other assets accrued expenses and other liabilities ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make payments during the lease term. ROU assets are recognized at the lease commencement date for the lease liability amount, adjusted for initial direct costs incurred and lease incentives received. Lease liabilities are recognized at commencement based on the present value of the future lease payments over the lease term. Lease terms may include options to extend or terminate the lease when the Company believes it is reasonably certain that the Company will exercise such options. Since the implicit discount rate for operating leases is not readily determinable, the Company uses an estimate of its incremental borrowing rate (“IBR”) on the lease commencement date in determining the present value of lease payments. IBR is determined based on information available at lease commencement including interest rates, credit ratings, credit spreads, and lease term. Operating lease expense is recognized on a straight-line basis over the lease term. The Company accounts for lease and non-lease components as a single lease component. Accordingly, the Company includes fixed non-lease components with lease payments for the purpose of calculating lease right-of-use assets and liabilities. Non-lease components that are not fixed are expensed as incurred as variable lease payments. The Company does not record leases on the balance sheet that have a term of 12 months or less at the lease commencement date. |
Capitalized Internal Use Software | The Company capitalizes the costs to develop its internal use software when preliminary development efforts are successfully completed, management has authorized and committed project funding, it is probable that the project will be completed, and the software will be used as intended. Such costs are amortized on a straight-line basis over the estimated useful life of five years. Costs incurred prior to meeting these criteria, in addition to costs incurred for training and maintenance, are expensed as incurred. |
Goodwill and Intangible Assets | The Company accounts for business combinations using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recorded at their fair values as of the acquisition date on the consolidated balance sheets. Any excess of purchase price over the fair value of net assets acquired is recorded as goodwill. The determination of estimated fair value requires the Company to make significant estimates and assumptions. Transaction costs associated with business combinations are expensed as they are incurred. Included in the purchase price of an acquisition may be an estimation of the fair value of liabilities associated with contingent consideration. The fair value of contingent consideration is based upon the present value of the expected future payments to be made to the sellers of an acquired business in accordance with the provisions contained in the respective purchase agreements. Subsequent changes in the fair value of contingent consideration are recorded in the consolidated statements of operations and comprehensive loss. |
Amortization and Impairment | Intangible assets with finite useful lives are amortized over their estimated useful lives in the consolidated statements of operations and comprehensive loss. Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment annually, or more frequently if necessary. The goodwill impairment test is performed at the reporting unit level. To review for impairment the Company first assess qualitative factors to determine whether events or circumstances lead to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. After assessing the totality of events and circumstances, if the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further assessment is performed. If the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company calculates the fair value of that reporting unit and compares the fair value to the reporting unit’s net book value. If the fair value of the reporting unit is greater than its net book value, there is no impairment. If the net book value exceeds the reporting unit’s fair value, an impairment loss is recognized, with the loss not exceeding the total amount of goodwill allocated to that reporting unit. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Indefinite-lived intangible assets are tested for impairment by comparing the estimated fair value of the asset to the asset’s carrying value. If the carrying value of the asset exceeds its estimated fair value, an impairment loss is recognized, and the asset is written down to its estimated fair value. There were no material impairment losses recognized on indefinite-lived intangible assets during the years ended December 31, 2022 and 2021. Refer to Note 6 for impairment charges related to goodwill. The Company evaluates the recoverability of long-lived assets, excluding goodwill and indefinite-lived intangible assets, whenever events or changes in circumstances indicate the carrying value of such asset may not be recoverable. Should there be an indication of impairment, the Company tests for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss. There were no material impairment losses recognized on long-lived assets during the years ended December 31, 2022 and 2021. |
Loss and Loss Adjustment Expense Reserve | The reserve for unpaid losses and loss adjustment expenses include estimates for unpaid claims, claims adjustment expenses on reported losses and estimates of losses incurred but not reported (IBNR), net of salvage and subrogation recoveries. The liability is based on the Company’s best estimate of the amounts yet to be paid for all loss and loss adjustment expenses that will be paid on claims that occurred during the period and prior, whether those claims are currently known or unknown. Loss and loss adjustment reserves are the amount of ultimate loss and loss adjustment expense less the paid amounts as of the balance sheet date. Ultimate loss and loss adjustment expense is the sum of the following items: 1. Loss and loss adjustment expense paid through a given evaluation date 2. Case reserves for loss and loss adjustment expense for losses that have been reported but not yet paid as of a given evaluation date 3. IBNR for loss and loss adjustment expense include an estimate for future loss payments on incurred claims not yet reported and for expected development on reported claims Case reserves are established within the claims adjustment process based on all known circumstances of a claim at the time. 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. The most significant assumptions used in the determination of the recorded reserve for loss and loss adjustment expenses are historical aggregate claim reporting and payment patterns, which is assumed to be indicative of future loss development and trends. Additionally, claim counts are used for analyses relating to natural disasters, such as hurricanes, earthquakes, and wildfires as losses from these events are inherently more difficult to estimate due to the potential exposure of the catastrophic events. Other assumptions considered include information developed from internal and independent external sources such as premium, rate and cost trends, litigation and regulatory trends, legislative activity, climate change, social and economic patterns. Inherent in the estimates of ultimate loss and loss adjustment expenses are expected trends in claims severity and frequency among other factors that could vary significantly as claims are settled. 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 establishment of new loss and loss adjustment expense reserves or the adjustment of previously recorded loss and loss adjustment expense reserves could result in significant positive or negative changes to the Company’s financial condition for any particular period. While the Company believes that it has made a reasonable estimate of loss and loss adjustment expense reserves, the ultimate loss experience may not be as reliably predicted as may be the case with other insurance expenses, and it is possible that actual loss and loss adjustment expenses will be higher or lower than the loss and loss adjustment reserve amount recorded by the Company. |
Provision for Commission | Provision for commission includes return commission payable to insurers, or commission slide, based on the actual performance of insurance policies placed by the Company against a contractual range of performance targets. The Company’s reserve estimation is based on current and historical performance of the portfolio of insurance policies placed with the insurance carriers. Provision for commission also includes cancellation reserves which represent the Company’s estimate of return commission payable to insureds based on policy cancellations after the effective date. The Company’s estimation for the reserve uses historical policy cancellation. The return commission payable to insurers and cancellation reserves are based on assumptions and estimates, and while management believes the amount recorded is the Company’s best estimate, the ultimate liability may differ from the amount recorded. The methods for making such estimates and for establishing the resulting liability are continually reviewed, and any adjustments are reflected in the period in which they become known. |
Revenue Recognition | Net Earned Premium Net earned premium represents the earned portion of the Company’s gross written premium for insurance policies written or assumed by the Company and less the earned portion of ceded written premium (any portion of the Company’s gross written premium that is ceded to third-party reinsurers under the Company’s reinsurance agreements). The Company earns written premiums on a pro-rata basis over the term of the policies. Commission Income, net Commission income, net includes: 1. Managing General Agent (“MGA”) Commission: The Company operates as an MGA for multiple insurers. The Company designs and underwrite insurance products on behalf of the insurers culminating in the sale of insurance policies. The Company earns recurring commission and policy fees associated with the policies, they sell. The Company has underwriting authority and responsibility for administering claims, (see Claim Processing Fees below) and works with affiliated and unaffiliated carrier platforms and a diversified panel of highly rated reinsurance companies who pay the Company commission in exchange for the opportunity to take that risk on their balance sheets. The Company’s performance obligation associated with these contracts is the placement of the policy, which is met on the effective date. Upon issuance of a new policy, the Company charges policy fees and inspection fees (see Service and Fee Income below), retains its share of commission, and remits the balance to the respective insurers. Subsequent commission adjustments arising from policy changes such as endorsements are recognized in the period when the adjustments occur. The MGA commission is subject to adjustments, higher or lower (commonly referred to as “commission slide”), depending on the underwriting performance of the policies placed by us. The Company is required to return a portion of its MGA commission due to commission slide on the policies placed as an MGA if the underwriting performance varies due to higher Hippo programs’ loss ratio from provisional performance of the Hippo programs’ loss ratio. The Company also returns a portion of its MGA commission if the policies are cancelled before the term of the policy. Accordingly, the Company reserves for commission slide using estimated Hippo programs’ loss ratio performance, or a cancellation reserve as a reduction of revenue for each period presented in its statement of operations and comprehensive loss. 2. Agency Commission: The Company also operates licensed insurance agencies that are engaged solely in the sale of policies, including non-Hippo policies. For these policies, the Company earns a recurring agency commission from the carriers whose policies the Company sells, which is recorded in the commission income, net line in the consolidated statements of operations and comprehensive loss. Similar to the MGA businesses, the performance obligation from the agency contracts is placement of the insurance policies. For both MGA and insurance agency activities, the Company recognizes commission received from insurers for the sale of insurance contracts as revenue at a point in time on the policy effective dates. Cash received in advance of policy effective dates is recorded on the consolidated balance sheets, representing the Company’s portion of commission and premium due to insurers and reinsurers, and hold this cash in trust for the benefit of the insurers and reinsurers as fiduciary liabilities. 3. Ceding Commission: The Company receives commission based on the premium it cedes to third-party reinsurers for the reimbursement for the Company’s acquisition and underwriting services. Excess ceding commission over the cost of acquisition is included in the commission income, net line on the Company’s consolidated statements of operations and comprehensive loss. For the policies that the Company writes on its own carrier as MGA, the Company recognizes this commission as ceding commission on the consolidated statements of operations and comprehensive loss. The Company earns commission on ceded reinsurance premium in a manner consistent with the recognition of the earned premium on the underlying insurance policies, on a pro-rata basis over the terms of the policies reinsured. The Company records the portion of ceding commission income which represents reimbursement of successful direct acquisition costs related to the underlying policies as an offset to the applicable direct acquisition costs. 4. Carrier Fronting Fees: Through the Company’s insurance-as-a-service business the Company earns fronting fees from the MGA programs it supports. The Company earns fronting fees in a manner consistent with the recognition of the earned premium on the underlying insurance policies, on a pro-rata basis over the terms of the policies. This revenue is included in the commission income, net line on its statements of operations and comprehensive loss. 5. Claim Processing Fees: As an MGA the Company receives a fee that is calculated as a percent of the premium, from the insurers in exchange for providing claims adjudication services. The claims adjudication services are provided over the term of the policy and recognized ratably over the same period. This revenue is included in the commission income, net line on the Company’s consolidated statements of operations and comprehensive loss. Service and Fee Income Service and fee income mainly represent policy fees and other revenue. The Company directly bills policyholders for policy fees and collects and retains fees per the terms of the contracts between the Company and its insurers. Similar to the commission revenue, the Company estimates a cancellation reserve for policy fees using historical information. The performance obligation associated with these fees is satisfied at a point in time upon completion of the underwriting process, which is the policy effective date. Accordingly, the Company recognizes all fees as revenue on the policy effective date. Net Investment Income Net investment income represents interest earned from fixed maturity securities, short-term investments and other investments, and the gains or losses from the sale of investments. The Company’s cash and invested assets primarily consist of fixed-maturity securities, and may also include cash and cash equivalents, equity securities, and short-term investments. The principal factors that influence net investment income are the size of the Company’s investment portfolio and the yield on that portfolio. As measured by amortized cost (which excludes changes in fair value, such as changes in interest rates), the size of the Company’s investment portfolio is mainly a function of the Company’s invested equity capital along with premium the Company receives from its customers less payments on customer claims. Net investment income also includes an insignificant amount of net realized gains (losses) on investments, which are a function of the difference between the amount received by us on the sale of a security and the security’s amortized cost, as well as any allowances for credit losses recognized in earnings, if any. |
Insurance-Related Expenses | Insurance-related expenses primarily consist of amortization of commissions costs and deferred acquisition costs, and credit card processing fees not charged to the Company’s customers. Insurance-related expenses also include employee compensation (including stock-based compensation and benefits) of the Company’s underwriting teams as well as allocated occupancy costs and related overhead based on headcount, and amortization of capitalized internal use software costs. Insurance-related expenses are offset by the portion of ceding commission income which represents reimbursement of successful acquisition costs related to the underlying policies. Additionally, insurance-related expenses are comprised of the costs of providing bound policies and delivering claims services to the Company’s customers. These costs include technology service costs including software, data services, and third-party call center costs in addition to personnel-related costs. |
Technology and Development | Technology and development expenses primarily consist of employee compensation (including stock-based compensation and benefits) for the Company’s technology staff, which includes technology development, infrastructure support, actuarial, and third-party services. Technology and development also includes allocated facility costs and related overhead based on headcount. |
Sales and Marketing | Sales and marketing expenses primarily consist of sales commissions, advertising costs, and marketing expenditures, as well as employee compensation (including stock-based compensation and benefits) for employees |
General and Administrative | General and administrative expenses primarily consist of employee compensation (including stock-based compensation and benefits) for the Company’s finance, human resources, legal, and general management functions as well as facilities, insurance, and professional services. |
Impairment | Impairment and restructuring charges consist of non-cash impairment charges relating to goodwill. The Company reviews goodwill for impairment annually on October 1 and more frequently if events or changes in circumstances indicate that an impairment may exist. If the carrying value of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded. It also consists of severance and other personnel costs associated with exit and disposal activities as well as reductions in workforce. |
Restructuring Charges | Impairment and restructuring charges consist of non-cash impairment charges relating to goodwill. The Company reviews goodwill for impairment annually on October 1 and more frequently if events or changes in circumstances indicate that an impairment may exist. If the carrying value of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is calculated and an impairment loss equal to the excess is recorded. It also consists of severance and other personnel costs associated with exit and disposal activities as well as reductions in workforce. |
Interest and Other (Income) Expense | Interest and other (income) expense |
Stock-Based Compensation Expense | The Company recognizes stock-based compensation expense based on the estimated fair value of equity-based payment awards on the date of grant using the Black-Scholes-Merton option-pricing model. The Company recognizes stock-based compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards in the Company’s consolidated statements of operations and comprehensive loss. The Company has elected to record forfeitures as they occur. Certain employees early exercised stock options in exchange for promissory notes. The Company accounted for the promissory notes as nonrecourse in their entirety since the promissory notes are not aligned with a |
Income Taxes | The Company accounts for income taxes using the asset and liability method, under which deferred tax liabilities and assets are recognized for the expected future tax consequences of temporary differences between consolidated financial statement carrying amounts and the tax basis of assets and liabilities and net operating loss and tax credit carryforwards. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. The effect on deferred taxes of a change in tax rate is recognized in income in the period that includes the enactment date. The Company accounts for application of the U.S. Global Intangible Low Taxed Income rules by recognizing the tax in the period in which it is incurred. The Company determines whether it is more likely than not that a tax position will be sustained upon examination. If it is not more likely than not that a position will be sustained, no amount of benefit attributable to the position is recognized. The tax benefit to be recognized of any tax position that meets the more likely than not recognition threshold is calculated as the largest amount that is more than 50% likely of being realized upon resolution of the contingency. |
Net Loss Per Share Attributable to Common Stockholders of Hippo Holdings Inc. | Basic and diluted net loss per share attributable to common stockholders of Hippo Holdings Inc. is presented in conformity with the two-class method required for common stock and participating securities. Under the two-class method, net loss is attributed to common stockholders and participating securities based on their participation rights. The Company considers all series of its convertible preferred stock and unvested common stock, which includes early exercised stock options and restricted stock awards, to be participating securities as holders of such securities have non-forfeitable dividend rights in the event of the Company’s declaration of a dividend for shares of common stock. Under the two-class method, the net loss attributable to common stockholders of Hippo Holdings Inc. is not allocated to the convertible preferred stock and unvested common stock as these securities do not have a contractual obligation to share in the Company’s losses. Distributed and undistributed earnings allocated to participating securities are subtracted from net loss in determining net loss attributable to common stockholders. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average shares used in computing net loss per share attributable to common stockholders. For periods in which the Company reports net losses, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders because potentially dilutive common shares are not assumed to have been issued if their effect is anti-dilutive. |
Emerging Growth Company | The Company currently qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (JOBS Act”). Accordingly, the Company is provided the option to adopt new or revised accounting guidance either (1) within the same periods as those otherwise applicable to non-emerging growth companies or (2) within the same time periods as private companies.The Company has elected to adopt new or revised accounting guidance within the same time period as private companies, unless management determines that it is preferable to take advantage of early adoption provisions offered within the applicable guidance. The Company’s utilization of these transition periods may make it difficult to compare the Company’s financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the transition periods afforded under the JOBS Act. |
Recent Accounting Pronouncements | Accounting Pronouncements Recently Adopted In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) , which supersedes FASB ASC Topic 840, Leases , and makes other conforming amendments to U.S. GAAP. ASU 2016-02 requires, among other changes to the lease accounting guidance, lessees to recognize most leases on-balance sheet via a right of use (“ROU”) asset and lease liability, with an optional policy election to not recognize lease assets and lease liabilities for leases with a term of 12 months or less. The amendments also require new disclosures, including qualitative and quantitative disclosures to enable users to understand the amount, timing, and judgements related to leases and the related cash flows. The Company adopted the new standard as of January 1, 2022, using the modified retrospective method of adoption with no adjustment to the opening balance sheet. The Company elected the package of practical expedients to not (i) reassess whether any expired or existing contracts are or contain a lease, (ii) reassess historical lease classifications for existing leases, and (iii) reassess initial direct costs for existing leases. The adoption of Topic 842 resulted in the recognition of lease liabilities of $17.4 million and corresponding ROU assets of $16.7 million which includes the effect of $0.7 million from reclassifying previously recognized deferred rent as an offset, in accordance with the transition guidance. The adoption did not have a material impact on the Company’s consolidated statements of operations or consolidated statements of cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial instruments — Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), and subsequent related ASUs, which amends the guidance on the impairment of financial instruments by requiring measurement and recognition of expected credit losses for financial assets held. The Company early adopted Topic 326 effective January 1, 2022 using the modified retrospective approach which resulted in no cumulative-effect adjustment to retained earnings. The adoption did not have a material impact on the Company’s available-for-sale securities. In December 2020, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 as of January 1, 2022, under the private company transition guidance and the adoption did not have a material impact on the Company’s consolidated financial statements. Refer to above and Note 20 for further information. Accounting Pronouncements Not Yet Adopted Recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not have, nor does management expect such pronouncements for which the Company has not already adopted to have a significant impact on the Company’s present or future consolidated financial statements. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Disaggregation of Revenue by Major Source | The following table disaggregates the Company’s revenues by major source (in millions): Year Ended December 31, 2022 2021 Net earned premium $ 42.5 $ 38.9 Ceding commissions, net 37.6 21.3 Agency commissions, net 16.7 12.3 Policy fees 11.1 10.9 MGA commissions, net — 2.6 Claims processing fees — 1.3 Other revenue 2.8 3.6 Net investment income 9.0 0.3 Total revenue, net $ 119.7 $ 91.2 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule Of Reverse Recapitalization | The following table reconciles th e elements of the Business Combination and the PIPE investment to the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2022 : in millions Recapitalization Cash in trust, net of redemptions $ 37.7 Cash - PIPE 550.0 Less: Cash used for repurchase of common stock (95.0) Less: transaction costs and advisory fees (42.4) Net cash received from the Business Combination and PIPE investment $ 450.3 Net assets acquired from the Business Combination 3.6 Total $ 453.9 The number of shares of common stock issued immediately following the consummation of the Business Combination and the PIPE Investment: Number of Shares Class A common stock outstanding prior to Business Combination 920,000 Less: Redemption of RTPZ Class A common stock (770,455) Class A common stock of RTPZ 149,545 RTPZ Founder shares – Class B 230,000 PIPE Shares 2,200,000 Business Combination and PIPE shares which converted to Hippo common stock 2,579,545 Old Hippo shares, net of repurchase (1) 19,809,704 Total shares of common stock outstanding immediately after Business Combination and PIPE investment 22,389,249 (1) The number of Old Hippo shares was determined based on Old Hippo common stock outstanding immediately prior to the closing of the Business Combination multiplied by the Exchange Ratio of 6.95433 adjusted for buyback of 380,000 shares of common stock. For further details, refer to Note 19, Stockholders’ Equity. |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Fixed Maturities Securities and Short-Term Investments | The amortized cost and fair value of fixed maturities securities and short-term investments are as follows (in millions): December 31, 2022 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Fixed maturities available-for-sale: U.S. government and agencies $ 21.6 $ — $ (0.5) $ 21.1 States and other territories 8.9 — (0.6) 8.3 Corporate securities 54.8 0.1 (2.4) 52.5 Foreign securities 0.9 — (0.1) 0.8 Residential mortgage-backed securities 20.4 0.1 (1.6) 18.9 Commercial mortgage-backed securities 6.5 — (0.7) 5.8 Asset backed securities 14.2 — (0.5) 13.7 Total fixed maturities available-for-sale 127.3 0.2 (6.4) 121.1 Short-term investments: U.S. government and agencies 129.1 — (0.2) 128.9 Commercial paper 147.1 — (0.6) 146.5 Corporate securities 49.4 — — 49.4 Total short-term investments 325.6 — (0.8) 324.8 Total $ 452.9 $ 0.2 $ (7.2) $ 445.9 December 31, 2021 Amortized Cost Unrealized Gains Unrealized Losses Fair Value Fixed maturities available-for-sale: U.S. government and agencies $ 9.3 $ — $ — $ 9.3 States and other territories 5.8 — (0.1) 5.7 Corporate securities 17.3 — (0.2) 17.1 Foreign securities 0.9 — — 0.9 Residential mortgage-backed securities 10.8 — (0.2) 10.6 Commercial mortgage-backed securities 4.8 — (0.1) 4.7 Asset backed securities 6.7 — (0.1) 6.6 Total fixed maturities available-for-sale $ 55.6 $ — $ (0.7) $ 54.9 Short-term investments: U.S. government and agencies $ 9.1 $ — $ — $ 9.1 Total $ 64.7 $ — $ (0.7) $ 64.0 |
Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value | The following tables present the gross unrealized losses and related fair values for the Company’s investments in available-for-sale debt securities, grouped by duration of time in a continuous unrealized loss position as of December 31, 2022, and December 31, 2021 (in millions): December 31, 2022 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities available-for-sale: U.S. government and agencies $ 17.9 $ (0.4) $ 1.1 $ (0.1) $ 19.0 $ (0.5) States and other territories 3.6 (0.1) 4.6 (0.5) 8.2 (0.6) Corporate securities 30.5 (1.5) 11.1 (0.9) 41.6 (2.4) Foreign securities — — 0.8 (0.1) 0.8 (0.1) Residential mortgage-backed securities 6.3 (0.3) 7.6 (1.3) 13.9 (1.6) Commercial mortgage-backed securities 1.9 — 3.9 (0.7) 5.8 (0.7) Asset backed securities 5.5 (0.2) 3.7 (0.3) 9.2 (0.5) Short-term investments: U.S. government and agencies 129.1 (0.2) — — 129.1 (0.2) Commercial paper 147.1 (0.6) — — 147.1 (0.6) Total $ 341.9 $ (3.3) $ 32.8 $ (3.9) $ 374.7 $ (7.2) December 31, 2021 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fixed maturities available-for-sale: Municipal securities $ 4.9 $ (0.1) $ 0.3 $ — $ 5.2 $ (0.1) Corporate securities 14.6 (0.2) 1.3 — 15.9 (0.2) Residential mortgage-backed securities 10.3 (0.1) 0.2 (0.1) 10.5 (0.2) Commercial mortgage-backed securities 4.7 (0.1) — — 4.7 (0.1) Asset backed securities 5.4 (0.1) — — 5.4 (0.1) Total $ 39.9 $ (0.6) $ 1.8 $ (0.1) $ 41.7 $ (0.7) |
Investments Classified by Contractual Maturity Date | The amortized cost and fair value of fixed maturities securities by contractual maturity are as follows (in millions): December 31, 2022 Amortized Cost Fair Value Due to mature: One year or less $ 10.6 $ 10.4 After one year through five years 67.0 64.0 After five years 8.6 8.3 Residential mortgage-backed securities 20.4 18.9 Commercial mortgage-backed securities 6.5 5.8 Asset backed securities 14.2 13.7 Total fixed maturities available-for-sale $ 127.3 $ 121.1 |
Investment Income | The Company’s net investment income is comprised of the following (in millions): Years Ended December 31, 2022 2021 Interest on cash and cash equivalents $ 2.4 $ — Fixed maturities income 2.9 0.4 Short-term investment income 3.9 — Total investment income 9.2 0.4 Investment expenses (0.2) (0.1) Net investment income $ 9.0 $ 0.3 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table sets forth the cash, cash equivalents, and restricted cash (in millions): December 31 2022 2021 Cash and cash equivalents: Cash $ 65.7 $ 219.2 Money market funds 87.1 556.4 Commercial paper 26.8 — U.S. government and agencies 14.9 — Total cash and cash equivalents 194.5 775.6 Restricted cash: Fiduciary assets 30.6 25.0 Letters of credit and cash on deposit 19.4 18.1 Total restricted cash 50.0 43.1 Total cash, cash equivalents, and restricted cash $ 244.5 $ 818.7 |
Restrictions on Cash and Cash Equivalents | The following table sets forth the cash, cash equivalents, and restricted cash (in millions): December 31 2022 2021 Cash and cash equivalents: Cash $ 65.7 $ 219.2 Money market funds 87.1 556.4 Commercial paper 26.8 — U.S. government and agencies 14.9 — Total cash and cash equivalents 194.5 775.6 Restricted cash: Fiduciary assets 30.6 25.0 Letters of credit and cash on deposit 19.4 18.1 Total restricted cash 50.0 43.1 Total cash, cash equivalents, and restricted cash $ 244.5 $ 818.7 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis (in millions): December 31, 2022 Level 1 Level 2 Level 3 Total Financial assets: Cash, cash equivalents, and restricted cash $ 244.5 $ — $ — $ 244.5 Fixed maturities available-for-sale: U.S. government and agencies 21.1 — — 21.1 States and other territories — 8.3 — 8.3 Corporate securities — 52.5 — 52.5 Foreign securities — 0.8 — 0.8 Residential mortgage-backed securities — 18.9 — 18.9 Commercial mortgage-backed securities — 5.8 — 5.8 Asset backed securities — 13.7 — 13.7 Total fixed maturities available-for-sale 21.1 100.0 — 121.1 Short-term investments U.S. government and agencies 128.9 — — 128.9 Commercial paper — 146.5 — 146.5 Corporate securities — 49.4 — 49.4 Total short-term investments 128.9 195.9 — 324.8 Total financial assets $ 394.5 $ 295.9 $ — $ 690.4 Financial liabilities: Contingent consideration liability $ — $ — $ 11.9 $ 11.9 Public warrants 0.2 — — 0.2 Private placement warrants — 0.1 — 0.1 Total financial liabilities $ 0.2 $ 0.1 $ 11.9 $ 12.2 December 31, 2021 Level 1 Level 2 Level 3 Total Financial assets: Cash, cash equivalents, and restricted cash $ 818.7 $ — $ — $ 818.7 Fixed maturities available-for-sale: U.S. government and agencies 9.3 — — 9.3 States and other territories — 5.7 — 5.7 Corporate securities — 17.1 — 17.1 Foreign securities — 0.9 — 0.9 Residential mortgage-backed securities — 10.6 — 10.6 Commercial mortgage-backed securities — 4.7 — 4.7 Asset backed securities — 6.6 — 6.6 Total fixed maturities available-for-sale 9.3 45.6 — 54.9 Short-term investments U.S. government and agencies — 9.1 — 9.1 Total financial assets $ 828.0 $ 54.7 $ — $ 882.7 Financial liabilities: Contingent consideration liability $ — $ — $ 11.6 $ 11.6 Public warrants 2.2 — — 2.2 Private placement warrants — 2.1 — 2.1 Total financial liabilities $ 2.2 $ 2.1 $ 11.6 $ 15.9 |
Liabilities Measured on at Fair Value, Unobservable Input Reconciliation | The table below presents the changes in the contingent consideration liability valued using Level 3 inputs (in millions): 2022 2021 Balance as of January 1, $ 11.6 $ 12.0 Payments of contingent consideration (3.8) (3.9) Changes in fair value 4.1 3.5 Balance as of December 31, $ 11.9 $ 11.6 The table below presents changes in the preferred stock warrant liability (in millions): 2021 Balance as of January 1, $ 22.9 Changes in fair value 121.6 Settlement of preferred stock warrants (144.5) Balance as of December 31, $ — 2021 Balance as of January 1, $ 113.3 Initial measurement of new derivative 2.8 Changes in fair value 61.4 Settlement of derivative liability (177.5) Balance as of December 31, $ — The following table presents the changes in the fair value of the warrant liability (Public Warrants and Private Placement Warrants) (in millions): 2022 2021 Balance as of January 1, $ 4.3 $ — Initial measurement of warrants — 14.6 Changes in fair value (4.0) (10.3) December 31, $ 0.3 $ 4.3 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table represents the changes in goodwill (in millions): Balance at January 1, 2021 $ 47.8 Additions from acquisitions 5.2 Other adjustments $ 0.5 Balance at December 31, 2021 $ 53.5 Impairment charges (53.5) Balance at December 31, 2022 $ — |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets | December 31, 2022 2021 Weighted- Average Useful Life Remaining (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) (in millions) Agency and carrier relationships 6.0 $ 13.5 $ (3.4) $ 10.1 $ 13.5 $ (1.7) $ 11.8 State licenses and domain name Indefinite 10.5 — 10.5 10.5 — 10.5 Customer relationships 2.3 13.7 (8.5) 5.2 13.7 (6.0) 7.7 Developed technology — — — — 3.6 (2.7) 0.9 Value of business acquired — — — — 0.1 (0.1) — Other 6.1 1.7 (0.6) 1.1 2.0 (0.7) 1.3 Total intangible assets, net $ 39.4 $ (12.5) $ 26.9 $ 43.4 $ (11.2) $ 32.2 |
Schedule of Finite-Lived Intangible Assets | December 31, 2022 2021 Weighted- Average Useful Life Remaining (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in millions) (in millions) Agency and carrier relationships 6.0 $ 13.5 $ (3.4) $ 10.1 $ 13.5 $ (1.7) $ 11.8 State licenses and domain name Indefinite 10.5 — 10.5 10.5 — 10.5 Customer relationships 2.3 13.7 (8.5) 5.2 13.7 (6.0) 7.7 Developed technology — — — — 3.6 (2.7) 0.9 Value of business acquired — — — — 0.1 (0.1) — Other 6.1 1.7 (0.6) 1.1 2.0 (0.7) 1.3 Total intangible assets, net $ 39.4 $ (12.5) $ 26.9 $ 43.4 $ (11.2) $ 32.2 |
Finite-lived Intangible Assets Amortization Expense | As of December 31, 2022, the projected annual amortization expense for the Company’s intangible assets for the next five years is as follows (in millions): Years Ending December 31, 2023 $ 4.3 2024 4.1 2025 2.5 2026 1.8 2027 1.8 Thereafter 1.9 Total $ 16.4 |
Capitalized Internal Use Soft_2
Capitalized Internal Use Software (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Research and Development [Abstract] | |
Schedule of Capitalized Computer Software | December 31, 2022 2021 (in millions) Capitalized internal use software $ 56.4 $ 34.5 Less: accumulated amortization (17.6) (8.6) Total capitalized internal use software $ 38.8 $ 25.9 |
Other Assets (Tables)
Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | December 31, 2022 2021 (in millions) Prepaid expenses $ 17.4 $ 21.2 Claims receivable 9.0 24.4 Lease right-of-use assets 27.6 — Property and equipment 5.4 1.1 Other 4.2 5.1 Total other assets $ 63.6 $ 51.8 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | December 31, 2022 2021 (in millions) Claim payments outstanding $ 27.7 $ 23.2 Lease liability 28.9 — Advances from customers 10.2 8.7 Deferred revenue 11.0 11.2 Employee related accruals 6.2 8.5 Premium refund liability 8.2 4.8 Fiduciary liability 6.6 3.7 Contingent consideration liability 11.9 11.6 Other 17.5 23.7 Total accrued expenses and other liabilities $ 128.2 $ 95.4 |
Loss and Loss Adjustment Expe_2
Loss and Loss Adjustment Expense Reserves (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense | The reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance is summarized as follows for the years ended December 31, (in millions): 2022 2021 Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE as of beginning of the period $ 260.8 $ 105.1 Reinsurance recoverables on unpaid losses and LAE (216.8) (92.1) Reserve for losses and LAE, net of reinsurance recoverables as of beginning of the period 44.0 13.0 Add: Incurred losses and LAE, net of reinsurance, related to: Current year 113.2 85.0 Prior years (11.8) (0.6) Total incurred 101.4 84.4 Deduct: Loss and LAE payments, net of reinsurance, related to: Current year 56.7 43.6 Prior year 23.7 9.8 Total paid 80.4 53.4 Reserve for losses and LAE, net of reinsurance recoverables at end of period 65.0 44.0 Add: Reinsurance recoverables on unpaid losses and LAE at end of period 228.8 216.8 Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE as of end of the period $ 293.8 $ 260.8 |
Short-duration Insurance Contracts, Claims Development | The information about incurred and paid claims development for the years ended prior to December 31, 2021 is presented as unaudited supplementary information. In addition, the following table shows incurred loss and LAE by accident year in aggregate as the Company has one single operating and reportable segment (in millions, except for number of claims): December 31, December 31, 2022 2016* 2017* 2018* 2019* 2020* 2021 2022 IBNR Cumulative Number of Reported Claims Accident Year 2016 $ 2.5 $ 1.9 $ 1.9 $ 1.8 $ 1.8 $ 1.8 $ 1.8 $ — 711 2017 5.2 5.4 4.0 4.0 4.1 4.0 — 3,071 2018 7.8 7.2 7.2 7.2 6.8 0.1 5,927 2019 4.8 4.8 4.7 4.8 — 14,943 2020 28.6 28.1 29.9 0.8 30,235 2021 76.7 63.5 4.6 40,878 2022 94.3 41.8 40,213 Total incurred Loss and Loss Adjustment Expenses, net $ 205.1 $ 47.3 135,978 * Presented as unaudited required supplementary information December 31, 2016* 2017* 2018* 2019* 2020* 2021 2022 Accident Year 2016 $ 1.2 $ 1.8 $ 1.9 $ 1.8 $ 1.8 $ 1.8 $ 1.8 2017 3.0 4.0 4.0 4.0 4.0 4.0 2018 5.3 5.7 5.7 5.8 6.7 2019 3.2 4.4 4.6 4.7 2020 1.8 26.8 28.8 2021 35.3 55.8 2022 38.3 Total paid losses and LAE, net $ 140.1 Total unpaid loss and LAE reserves, net 65.0 Ceded unpaid loss and LAE $ 228.8 Gross unpaid loss and LAE $ 293.8 * Presented as unaudited required supplementary information |
Short-duration Insurance Contracts, Schedule of Historical Claims Duration | The following table presents the average annual percentage payout of incurred losses by age, net of reinsurance as of December 31, 2022: Years 1 2 3 4 5 Property and Casualty 56% 35% 3% 1% 5% |
Short-duration Insurance Contracts, Reconciliation of Claims Development to Liability | The reconciliation of the net incurred and paid loss information in the loss reserve rollforward table and development tables with respect to the current accident year is as follows (in millions): 2022 Current Accident Year 2021 Current Accident Year Incurred Paid Incurred Paid Development table $ 94.3 $ 38.3 $ 76.7 $ 35.3 Unallocated loss adjustment expense 18.9 18.9 8.3 8.3 Other — (0.5) — — Rollforward table $ 113.2 $ 56.7 $ 85.0 $ 43.6 |
Reinsurance (Tables)
Reinsurance (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Effects of Reinsurance | The following table reflects amounts affecting the consolidated statements of operations and comprehensive loss for ceded reinsurance (in millions): For the Years Ended December 31, 2022 2021 Written Premiums Earned Premiums Loss and LAE Incurred Written Premiums Earned Premiums Loss and LAE Incurred Direct $ 628.3 $ 541.1 $ 409.6 $ 474.0 $ 364.7 $ 498.5 Assumed 1.6 0.4 0.1 3.3 9.8 16.9 Gross 629.9 541.5 409.7 477.3 374.5 515.4 Ceded (580.3) (499.0) (308.3) (434.8) (335.6) (431.0) Net $ 49.6 $ 42.5 $ 101.4 $ 42.5 $ 38.9 $ 84.4 |
Reinsurance Recoverable | Amounts recoverable from reinsurers are recognized in a manner consistent with the claims liabilities associated with the reinsurance placement and presented on the balance sheet as reinsurance recoverable on paid and unpaid losses and LAE. Such balance is presented in the table below (in millions). December 31, 2022 2021 Reinsurance recoverable on paid loss $ 57.5 $ 50.1 Ceded unpaid loss and LAE 228.8 216.8 Total reinsurance recoverable $ 286.3 $ 266.9 |
Ceded Credit Risk | The Company has the following unsecured reinsurance recoverable and prepaid reinsurance premium balances from reinsurers (in millions): December 31, AM Best Rating Reinsurer 2022 2021 A+ Everest Insurance Company $ 55.3 $ 65.7 A+ Hannover Rück SE 49.9 — A Validus Reinsurance (Switzerland) Ltd. 42.2 57.5 A+ Munich Reinsurance America, Inc. 34.3 18.3 A+ Digital Advantage Insurance Company 19.4 — A+ Partner Reinsurance Company Ltd. 18.7 — A+ Partner Reinsurance Company of the U.S. 15.0 — $ 234.8 $ 141.5 Other reinsurers 121.2 179.6 $ 356.0 $ 321.1 |
Geographical Breakdown of Gro_2
Geographical Breakdown of Gross Written Premium (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Gross Written Premium by Geographical Areas | Gross written premium by state is as follows (in millions): Years Ended December 31, 2022 2021 Amount % of GWP Amount % of GWP State Texas $ 155.6 24.7 % $ 139.2 29.2 % California 116.3 18.5 % 85.2 17.9 % Florida 55.4 8.8 % 26.8 5.6 % Georgia 29.3 4.7 % 22.0 4.6 % Illinois 22.7 3.6 % 19.1 4.0 % Colorado 19.3 3.1 % 13.6 2.8 % Missouri 15.0 2.4 % 13.0 2.7 % Arizona 14.3 2.3 % 11.4 2.4 % Ohio 13.8 2.2 % 10.5 2.2 % New Jersey 14.0 2.2 % 10.4 2.2 % Other 174.2 27.7 % 126.1 26.4 % Total $ 629.9 100 % $ 477.3 100 % |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Lease, Cost | The weighted average remaining lease term and the weighted average discount rate for operating leases as of December 31, 2022 were: Weighted average remaining lease term 5.05 Weighted average discount rate 4.9% Supplemental cash flow information about the Company’s operating leases (in millions): For the Year Ended December 31, 2022 Cash paid for operating lease liabilities $ (4.4) Right-of-use assets obtained in exchange for new operating liabilities 15.0 |
Lessee, Operating Lease, Liability, Maturity | Maturities of operating lease liabilities by fiscal year as of December 31, 2022 are (in millions): Years Ending December 31, 2023 $ 6.7 2024 7.2 2025 6.7 2026 5.4 2027 2.4 Thereafter 4.6 Total undiscounted lease payments $ 33.0 Less: Imputed interest $ (4.1) Present value of lease payments $ 28.9 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Schedule of Activity From Outstanding Instruments Related To Business Acquisition | The below table shows the conversion of Old Hippo’s outstanding instruments on the date of the Closing that were converted, exercised, or issued as stock consideration. Description Balance outstanding prior to the Business Combination Exchange Ratio Post Conversion Balances Old Hippo common stock 637,636 6.95433 4,434,337 Old Hippo convertible preferred stock 1,759,407 6.95433 12,235,497 Old Hippo convertible promissory notes 249,912 6.95433 1,737,972 Old Hippo preferred stock warrants 99,764 6.95433 693,796 Old Hippo common stock warrants 156,463 6.95433 1,088,102 20,189,704 Less: Repurchase of common stock (380,000) Net Old Hippo shares consideration 19,809,704 |
Schedule of Share-based Payment Arrangement, Option, Activity | The following table summarizes option activity under the plans: Options Outstanding Weighted-Average Remaining Aggregate Intrinsic Value Number of Shares Weighted Average Exercise Price Contract Term Outstanding as of January 1, 2021 2,888,211 $ 18.76 8.9 $ 108.9 Granted 387,421 120.37 — — Exercised (913,892) 12.10 — 38.9 Cancelled/Expired (460,576) 51.24 — 13.9 Outstanding as of December 31, 2021 1,901,163 $ 33.05 8.3 $ 84.8 Granted 625,578 45.07 — — Exercised (145,525) 13.80 — 3.7 Cancelled/Expired (394,238) 41.61 — 2.2 Outstanding as of December 31, 2022 1,986,978 $ 36.54 7.8 $ 1.3 Vested and exercisable as of December 31, 2022 1,060,363 $ 30.34 7.4 $ 1.2 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of granted stock options was estimated as of the date of grant using the Black-Scholes-Merton option-pricing model, based on the following inputs: December 31, 2022 2021 Expected term (in years) 5.0 - 6.7 5.4 - 6.5 Expected volatility 29.6% - 30.9% 29.6% - 30.1% Risk-free interest rate 2.7% - 3.0% 0.6% - 1.4% Expected dividend yield — % — % |
Schedule of Share-based Payment Award, Restricted Stock Units and Performance Restricted Stock Units, Valuation Assumptions | The following table presents the assumptions utilized in the Monte Carlo valuation model for market-based awards for the period indicated: December 31, 2022 Expected term (in years) 4.1 Expected volatility 95.0 % Risk-free interest rate 2.9 % Expected dividend yield — % |
Schedule of Unvested Restricted Stock Units Roll Forward | The following table summarizes the RSU and PRSU activity for the year ended December 31, 2022: Number of Shares Weighted Average Grant-Date Fair Value per Share Unvested and outstanding as of December 31, 2020 — $ — Granted 1,208,279 99.83 Vested (7,505) 100.01 Canceled and forfeited (35,203) 99.19 Unvested and outstanding as of December 31, 2021 1,165,571 $ 99.85 Granted 2,829,774 30.49 Vested (444,105) 87.10 Canceled and forfeited (669,256) 67.89 Unvested and outstanding as of December 31, 2022 2,881,984 $ 41.15 |
Share-based Payment Arrangement, Expensed and Capitalized, Amount | Total stock-based compensation expense, classified in the accompanying consolidated statements of operations and comprehensive loss was as follows (in millions): Years Ended December 31, 2022 2021 Losses and loss adjustment expenses $ 2.6 $ 0.6 Insurance related expenses 5.4 1.1 Technology and development 19.2 6.8 Sales and marketing 13.7 5.0 General and administrative 21.0 10.8 Total stock-based compensation expense $ 61.9 $ 24.3 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Income (loss) before tax consists of the following (in millions): Year Ended December 31, 2022 2021 United States $ (333.5) $ (371.3) Foreign 1.4 0.6 Loss before income taxes attributable to Hippo $ (332.1) $ (370.7) Income before tax attributable to noncontrolling interests 6.9 3.5 Loss before income taxes $ (325.2) $ (367.2) |
Schedule of Effective Income Tax Rate Reconciliation | The components of the total provision for income taxes are as follows (in millions): Year Ended December 31, 2022 2021 Loss before income taxes attributable to Hippo $ (332.1) $ (370.7) Income tax benefit from statutory rate (69.8) (77.9) Effect of: Meals, entertainment & parking 0.2 0.1 Deferred compensation 6.6 27.8 Transaction costs — 0.1 State taxes (9.0) (7.2) Non-deductible interest — 5.5 Goodwill impairment 8.0 — Increase in valuation allowance 66.8 53.4 Foreign taxes 1.2 0.5 Other (2.7) (1.6) Income taxes expense $ 1.3 $ 0.7 |
Schedule of Components of Income Tax Expense (Benefit) | The components of the provision for income taxes are as follows (in millions): Year Ended December 31, 2022 2021 Income tax applicable to: Current State $ 0.1 $ 0.2 Foreign 1.2 0.5 Total current provision $ 1.3 $ 0.7 Deferred Federal $ — $ — State — — Total deferred provision $ — $ — Total provision for income taxes $ 1.3 $ 0.7 |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows (in millions): As of December 31, 2022 2021 Deferred tax assets: Net operating loss carryforward $ 127.7 $ 87.4 Intangible assets 8.5 3.5 Research and development credit 6.7 2.4 Deferred compensation 6.2 2.2 Unearned premium reserve 1.6 1.2 Loss reserve discount 0.8 0.6 Unrealized losses 1.7 0.2 Lease liability 5.6 3.7 Deferred revenue 4.3 — Capitalized software 5.8 — Other accruals 0.7 3.5 Total deferred tax assets $ 169.6 $ 104.7 Valuation allowance (161.5) (93.2) Total deferred income tax assets $ 8.1 $ 11.5 Deferred tax liabilities Property and equipment $ 0.5 $ 0.3 Provision for commission slide and cancellation 0.2 0.2 Capitalized software — 6.1 Acquired intangibles — 0.2 Deferred acquisition costs 1.7 0.9 Right-of-use asset 5.4 3.5 Other 0.3 0.3 Total deferred tax liabilities $ 8.1 $ 11.5 Deferred income tax assets, net $ — $ — |
Schedule of Unrecognized Tax Benefits Roll Forward | Below is a reconciliation of unrecognized tax benefits (in millions): Years Ended December 31, 2022 2021 Beginning unrecognized tax benefits $ 1.1 $ — Increases related to tax positions from prior years 0.7 — Increases related to tax positions taken in the current year 1.1 1.1 Ending unrecognized tax benefits $ 2.9 $ 1.1 |
Summary of Operating Loss Carryforwards | Components of the NOL carryforwards are as follows (in millions): Indefinite 20-year Carryforward Carryforward Expires in 2035 - 2042 Period Total U.S. Federal $ 102.8 $ 437.7 $ 540.5 U.S. State 223.0 — 223.0 Balance as of December 31, 2021 $ 325.8 $ 437.7 $ 763.5 |
Net Loss Per Share Attributab_2
Net Loss Per Share Attributable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | Net loss per share attributable to common stockholders was computed as follows: Years Ended December 31, 2022 2021 Numerator: Net loss attributable to Hippo – basic and diluted (in millions) $ (333.4) $ (371.4) Denominator: Weighted-average shares used in computing net loss per share attributable to Hippo — basic and diluted 22,747,101 10,886,757 Net loss per share attributable to Hippo — basic and diluted $ (14.66) $ (34.11) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Potential dilutive securities that were not included in the diluted loss per share calculations because they would be anti-dilutive were as follows: December 31, 2022 2021 Outstanding options 1,986,978 1,901,163 Warrants to purchase common shares 360,000 360,000 Common stock subject to repurchase 76,364 200,319 RSU and PRSUs 2,881,984 1,165,571 Total 5,305,326 3,627,053 |
Statutory Financial Informati_2
Statutory Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Insurance [Abstract] | |
Statutory Accounting Practices Disclosure | The statutory net income and statutory capital and surplus of the Company’s insurance subsidiaries in accordance with regulatory accounting practices were as follows (in millions): Statutory Net Income (Loss) Statutory Capital and Surplus 2022 2021 2022 2021 U.S. insurance subsidiaries $ 1.0 $ (0.5) $ 164.9 $ 131.8 International insurance subsidiary (35.8) (54.7) 26.9 7.7 Total $ (34.8) $ (55.2) $ 191.8 $ 139.5 |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Description of Business (Details) | 12 Months Ended | ||
Sep. 29, 2022 | Dec. 31, 2022 state | Dec. 31, 2021 | |
Reinsurance Retention [Line Items] | |||
Number of states licensed as insurance agency | 50 | ||
Number of states acting as managing general agent with underwriting and distributing of policies | 40 | ||
Reverse stock split ratio | 0.04 | ||
Reinsurance Policy, Type [Axis]: Proportional Reinsurance Treaties | |||
Reinsurance Retention [Line Items] | |||
Reinsured risk, percentage | 10% | 12% |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Deferred Policy Acquisition Costs, net of Ceding Commissions (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Amortized deferred policy acquisition costs | $ 17.8 | $ 13.9 |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Premium Deficiency (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Premium deficiency | $ 0 | $ 300,000 |
Description of Business and S_7
Description of Business and Summary of Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 0.9 | $ 0.4 |
Furniture, fixtures, and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 3 years | |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life | 2 years |
Description of Business and S_8
Description of Business and Summary of Significant Accounting Policies - Leases (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Lease right-of-use assets [extensible enumeration] | Other assets | Other assets |
Lease liability [extensible enumeration] | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Description of Business and S_9
Description of Business and Summary of Significant Accounting Policies - Capitalized Internal Use Software (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Internal use software | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Description of Business and _10
Description of Business and Summary of Significant Accounting Policies - Disaggregated Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net earned premium | $ 42.5 | $ 38.9 |
Ceding commissions, net | 37.6 | 21.3 |
Agency commissions, net | 16.7 | 12.3 |
Policy fees | 11.1 | 10.9 |
MGA commissions, net | 0 | 2.6 |
Claims processing fees | 0 | 1.3 |
Other revenue | 2.8 | 3.6 |
Net investment income | 9 | 0.3 |
Total revenue | $ 119.7 | $ 91.2 |
Description of Business and _11
Description of Business and Summary of Significant Accounting Policies - Sales and Marketing (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Advertising costs | $ 26.9 | $ 28.9 |
Description of Business and _12
Description of Business and Summary of Significant Accounting Policies - Interest and Other (Income) Expense (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Changes in fair value [extensible enumeration] | Interest and other (income) expense, net | Interest and other (income) expense, net |
Description of Business and _13
Description of Business and Summary of Significant Accounting Policies - Gain on Extinguishment of Debt (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Gain on extinguishment of debt | $ 0 | $ 47,000,000 |
Description of Business and _14
Description of Business and Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2022 | Jan. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-02 [Member] | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Lease liability | $ 0 | $ 28.9 | |
Lease right-of-use assets | $ 0 | $ 27.6 | |
Cumulative Effect, Period of Adoption, Adjustment | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Lease liability | $ 17.4 | ||
Lease right-of-use assets | 16.7 | ||
Deferred rent credit | $ 0.7 |
Business Combinations - Reverse
Business Combinations - Reverse Recapitalization (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Aug. 02, 2021 USD ($) $ / shares shares | Aug. 01, 2021 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | |
Business Acquisition [Line Items] | ||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 2,200,000 | |||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 250 | |||
Sale of stock, consideration received on transaction | $ 550,000 | |||
Stock issued during period, shares, business combination | $ 453,900 | |||
Exchange ratio | 6.95433 | |||
Common stock, shares outstanding (in shares) | shares | 22,389,249 | 23,201,434 | 22,601,245 | |
Proceeds from reverse capitalization, gross | $ 587,700 | |||
Cash - PIPE | 550,000 | $ 550,000 | ||
Cash in trust, net of redemptions | 37,700 | 37,700 | ||
Cash used for repurchase of common stock | 95,000 | 95,000 | ||
Transaction costs and advisory fees | $ 42,400 | 42,400 | ||
Stock converted, reverse recapitalization (in shares) | shares | 19,809,704 | |||
Proceeds from the exercise of preferred stock warrants | 0 | $ 29,000 | ||
Private placement warrants | ||||
Business Acquisition [Line Items] | ||||
Proceeds from the exercise of preferred stock warrants | $ 29,000 | |||
Old Hippo common stock | ||||
Business Acquisition [Line Items] | ||||
Repurchase of common stock | $ 95,000 | |||
Repurchase of common stock (in shares) | shares | 380,000 | |||
Exchange ratio | 6.95433 | |||
Common stock, shares outstanding (in shares) | shares | 380,000 | |||
Founder Shares Class B | Reinvent Sponsor Z LLC | Reinvent Technology Partners Z | ||||
Business Acquisition [Line Items] | ||||
Stock issued during period, shares, business combination (in shares) | shares | 230,000 | 230,000 | ||
Stock issued during period, shares, business combination | $ 25 | |||
Exchange ratio | 1 | |||
Common Class A | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | shares | 920,000 | |||
Common Class A | Reinvent Technology Partners Z | ||||
Business Acquisition [Line Items] | ||||
Repurchase of common stock | $ 192,600 | |||
Repurchase of common stock (in shares) | shares | 770,455 | |||
Stock issued during period, shares, business combination (in shares) | shares | 149,545 | |||
Exchange ratio | 1 | |||
Repurchase of common stock (in dollars per share) | $ / shares | $ 250 |
Business Combinations - Element
Business Combinations - Elements of the Business Combination (Details) - USD ($) $ in Millions | 12 Months Ended | |
Aug. 02, 2021 | Dec. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | ||
Cash in trust, net of redemptions | $ 37.7 | $ 37.7 |
Cash - PIPE | 550 | 550 |
Less: Cash used for repurchase of common stock | (95) | (95) |
Less: transaction costs and advisory fees | $ (42.4) | (42.4) |
Net cash received from the Business Combination and PIPE investment | 450.3 | |
Net assets acquired from the Business Combination | 3.6 | |
Total | $ 453.9 |
Business Combinations - Issuanc
Business Combinations - Issuance of Common Stock Related to Business Combination (Details) | Aug. 02, 2021 shares | Aug. 01, 2021 shares | Dec. 31, 2022 shares | Dec. 31, 2021 shares |
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | 22,389,249 | 23,201,434 | 22,601,245 | |
PIPE Shares (in shares) | 2,200,000 | |||
Business Combination and PIPE shares which converted to Hippo Holding common stock (in shares) | 2,579,545 | |||
Old Hippo shares, net of repurchase (in shares) | 19,809,704 | |||
Exchange Ratio | 6.95433 | |||
Common Class A | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | 920,000 | |||
Old Hippo common stock | ||||
Business Acquisition [Line Items] | ||||
Common stock, shares outstanding (in shares) | 380,000 | |||
Less: Repurchase of common stock (in shares) | (380,000) | |||
Exchange Ratio | 6.95433 | |||
Reinvent Technology Partners Z | Common Class A | ||||
Business Acquisition [Line Items] | ||||
Less: Repurchase of common stock (in shares) | (770,455) | |||
Stock issued during period, shares, business combination (in shares) | 149,545 | |||
Exchange Ratio | 1 | |||
Reinvent Technology Partners Z | Reinvent Sponsor Z LLC | Founder Shares Class B | ||||
Business Acquisition [Line Items] | ||||
Stock issued during period, shares, business combination (in shares) | 230,000 | 230,000 | ||
Exchange Ratio | 1 |
Investments - Fixed Maturities
Investments - Fixed Maturities Securities and Short-Term Investments (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 127.3 | $ 55.6 |
Unrealized Gains | 0.2 | 0 |
Unrealized Losses | (6.4) | (0.7) |
Fair Value | 121.1 | 54.9 |
Amortized Cost | 325.6 | |
Unrealized Gains | 0 | |
Unrealized Losses | (0.8) | |
Fair Value | 324.8 | 9.1 |
Amortized Cost | 452.9 | 64.7 |
Unrealized Gains | 0.2 | 0 |
Unrealized Losses | (7.2) | (0.7) |
Total investments | 445.9 | 64 |
U.S. government and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 21.6 | 9.3 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (0.5) | 0 |
Fair Value | 21.1 | 9.3 |
Amortized Cost | 129.1 | 9.1 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (0.2) | 0 |
Fair Value | 128.9 | 9.1 |
States and other territories | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8.9 | 5.8 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (0.6) | (0.1) |
Fair Value | 8.3 | 5.7 |
Corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 54.8 | 17.3 |
Unrealized Gains | 0.1 | 0 |
Unrealized Losses | (2.4) | (0.2) |
Fair Value | 52.5 | 17.1 |
Amortized Cost | 49.4 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 49.4 | |
Foreign securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 0.9 | 0.9 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (0.1) | 0 |
Fair Value | 0.8 | 0.9 |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 20.4 | 10.8 |
Unrealized Gains | 0.1 | 0 |
Unrealized Losses | (1.6) | (0.2) |
Fair Value | 18.9 | 10.6 |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6.5 | 4.8 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (0.7) | (0.1) |
Fair Value | 5.8 | 4.7 |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 14.2 | 6.7 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (0.5) | (0.1) |
Fair Value | 13.7 | $ 6.6 |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 147.1 | |
Unrealized Gains | 0 | |
Unrealized Losses | (0.6) | |
Fair Value | $ 146.5 |
Investments - Continuous Loss P
Investments - Continuous Loss Position (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | $ 341.9 | $ 39.9 |
Less than 12 months, Gross Unrealized Losses | (3.3) | (0.6) |
12 months or more, Fair Value | 32.8 | 1.8 |
12 months or more, Gross Unrealized Losses | (3.9) | (0.1) |
Total, Fair Value | 374.7 | 41.7 |
Total, Gross Unrealized Losses | (7.2) | (0.7) |
U.S. government and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 17.9 | |
Less than 12 months, Gross Unrealized Losses | (0.4) | |
12 months or more, Fair Value | 1.1 | |
12 months or more, Gross Unrealized Losses | (0.1) | |
Total, Fair Value | 19 | |
Total, Gross Unrealized Losses | (0.5) | |
States and other territories | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 3.6 | |
Less than 12 months, Gross Unrealized Losses | (0.1) | |
12 months or more, Fair Value | 4.6 | |
12 months or more, Gross Unrealized Losses | (0.5) | |
Total, Fair Value | 8.2 | |
Total, Gross Unrealized Losses | (0.6) | |
Municipal securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 4.9 | |
Less than 12 months, Gross Unrealized Losses | (0.1) | |
12 months or more, Fair Value | 0.3 | |
12 months or more, Gross Unrealized Losses | 0 | |
Total, Fair Value | 5.2 | |
Total, Gross Unrealized Losses | (0.1) | |
Corporate securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 30.5 | 14.6 |
Less than 12 months, Gross Unrealized Losses | (1.5) | (0.2) |
12 months or more, Fair Value | 11.1 | 1.3 |
12 months or more, Gross Unrealized Losses | (0.9) | 0 |
Total, Fair Value | 41.6 | 15.9 |
Total, Gross Unrealized Losses | (2.4) | (0.2) |
Foreign securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 0 | |
Less than 12 months, Gross Unrealized Losses | 0 | |
12 months or more, Fair Value | 0.8 | |
12 months or more, Gross Unrealized Losses | (0.1) | |
Total, Fair Value | 0.8 | |
Total, Gross Unrealized Losses | (0.1) | |
Residential mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 6.3 | 10.3 |
Less than 12 months, Gross Unrealized Losses | (0.3) | (0.1) |
12 months or more, Fair Value | 7.6 | 0.2 |
12 months or more, Gross Unrealized Losses | (1.3) | (0.1) |
Total, Fair Value | 13.9 | 10.5 |
Total, Gross Unrealized Losses | (1.6) | (0.2) |
Commercial mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 1.9 | 4.7 |
Less than 12 months, Gross Unrealized Losses | 0 | (0.1) |
12 months or more, Fair Value | 3.9 | 0 |
12 months or more, Gross Unrealized Losses | (0.7) | 0 |
Total, Fair Value | 5.8 | 4.7 |
Total, Gross Unrealized Losses | (0.7) | (0.1) |
Asset backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 5.5 | 5.4 |
Less than 12 months, Gross Unrealized Losses | (0.2) | (0.1) |
12 months or more, Fair Value | 3.7 | 0 |
12 months or more, Gross Unrealized Losses | (0.3) | 0 |
Total, Fair Value | 9.2 | 5.4 |
Total, Gross Unrealized Losses | (0.5) | $ (0.1) |
U.S. government and agencies | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 129.1 | |
Less than 12 months, Gross Unrealized Losses | (0.2) | |
12 months or more, Fair Value | 0 | |
12 months or more, Gross Unrealized Losses | 0 | |
Total, Fair Value | 129.1 | |
Total, Gross Unrealized Losses | (0.2) | |
Commercial paper | ||
Debt Securities, Available-for-sale [Line Items] | ||
Less than 12 months, Fair Value | 147.1 | |
Less than 12 months, Gross Unrealized Losses | (0.6) | |
12 months or more, Fair Value | 0 | |
12 months or more, Gross Unrealized Losses | 0 | |
Total, Fair Value | 147.1 | |
Total, Gross Unrealized Losses | $ (0.6) |
Investments - Contractual Matur
Investments - Contractual Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
One year or less | $ 10.6 | |
After one year through five years | 67 | |
After five years | 8.6 | |
Amortized Cost | 127.3 | $ 55.6 |
Fair Value | ||
One year or less | 10.4 | |
After one year through five years | 64 | |
After five years | 8.3 | |
Fair Value | 121.1 | 54.9 |
Residential mortgage-backed securities | ||
Amortized Cost | ||
Securities | 20.4 | |
Amortized Cost | 20.4 | 10.8 |
Fair Value | ||
Securities | 18.9 | |
Fair Value | 18.9 | 10.6 |
Commercial mortgage-backed securities | ||
Amortized Cost | ||
Securities | 6.5 | |
Amortized Cost | 6.5 | 4.8 |
Fair Value | ||
Securities | 5.8 | |
Fair Value | 5.8 | 4.7 |
Asset backed securities | ||
Amortized Cost | ||
Securities | 14.2 | |
Amortized Cost | 14.2 | 6.7 |
Fair Value | ||
Securities | 13.7 | |
Fair Value | $ 13.7 | $ 6.6 |
Investments - Net Investment In
Investments - Net Investment Income (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, Debt and Equity Securities [Abstract] | ||
Interest on cash and cash equivalents | $ 2.4 | $ 0 |
Fixed maturities income | 2.9 | 0.4 |
Short-term investment income | 3.9 | 0 |
Total investment income | 9.2 | 0.4 |
Investment expenses | (0.2) | (0.1) |
Net investment income | $ 9 | $ 0.3 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
Securities on deposit with state regulatory authorities | $ 12.6 | $ 8.6 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | $ 194.5 | $ 775.6 | |
Restricted cash | 50 | 43.1 | |
Total cash, cash equivalents, and restricted cash | 244.5 | 818.7 | $ 492.4 |
Cash | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 65.7 | 219.2 | |
Money market funds | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 87.1 | 556.4 | |
Commercial paper | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 26.8 | 0 | |
U.S. government and agencies | |||
Cash and Cash Equivalents [Line Items] | |||
Cash and cash equivalents | 14.9 | 0 | |
Fiduciary assets | |||
Cash and Cash Equivalents [Line Items] | |||
Restricted cash | 30.6 | 25 | |
Letters of credit and cash on deposit | |||
Cash and Cash Equivalents [Line Items] | |||
Restricted cash | $ 19.4 | $ 18.1 |
Fair Value Measurement - Assets
Fair Value Measurement - Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financial assets: | |||
Cash, cash equivalents, and restricted cash | $ 244.5 | $ 818.7 | $ 492.4 |
Fixed maturities available-for-sale | 121.1 | 54.9 | |
Short-term investments | 324.8 | 9.1 | |
Total financial assets | 690.4 | 882.7 | |
Financial liabilities: | |||
Contingent consideration liability | 11.9 | 11.6 | |
Total financial liabilities | 12.2 | 15.9 | |
Public warrants | |||
Financial liabilities: | |||
Warrants liabilities | 0.2 | 2.2 | |
Private placement warrants | |||
Financial liabilities: | |||
Warrants liabilities | 0.1 | 2.1 | |
U.S. government and agencies | |||
Financial assets: | |||
Fixed maturities available-for-sale | 21.1 | 9.3 | |
Short-term investments | 128.9 | 9.1 | |
Commercial paper | |||
Financial assets: | |||
Short-term investments | 146.5 | ||
States and other territories | |||
Financial assets: | |||
Fixed maturities available-for-sale | 8.3 | 5.7 | |
Corporate securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 52.5 | 17.1 | |
Short-term investments | 49.4 | ||
Foreign securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0.8 | 0.9 | |
Residential mortgage-backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 18.9 | 10.6 | |
Commercial mortgage-backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 5.8 | 4.7 | |
Asset backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 13.7 | 6.6 | |
Level 1 | |||
Financial assets: | |||
Cash, cash equivalents, and restricted cash | 244.5 | 818.7 | |
Fixed maturities available-for-sale | 21.1 | 9.3 | |
Short-term investments | 128.9 | ||
Total financial assets | 394.5 | 828 | |
Financial liabilities: | |||
Contingent consideration liability | 0 | 0 | |
Total financial liabilities | 0.2 | 2.2 | |
Level 1 | Public warrants | |||
Financial liabilities: | |||
Warrants liabilities | 0.2 | 2.2 | |
Level 1 | Private placement warrants | |||
Financial liabilities: | |||
Warrants liabilities | 0 | 0 | |
Level 1 | U.S. government and agencies | |||
Financial assets: | |||
Fixed maturities available-for-sale | 21.1 | 9.3 | |
Short-term investments | 128.9 | 0 | |
Level 1 | Commercial paper | |||
Financial assets: | |||
Short-term investments | 0 | ||
Level 1 | States and other territories | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 1 | Corporate securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Short-term investments | 0 | ||
Level 1 | Foreign securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 1 | Residential mortgage-backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 1 | Commercial mortgage-backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 1 | Asset backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 2 | |||
Financial assets: | |||
Cash, cash equivalents, and restricted cash | 0 | 0 | |
Fixed maturities available-for-sale | 100 | 45.6 | |
Short-term investments | 195.9 | ||
Total financial assets | 295.9 | 54.7 | |
Financial liabilities: | |||
Contingent consideration liability | 0 | 0 | |
Total financial liabilities | 0.1 | 2.1 | |
Level 2 | Public warrants | |||
Financial liabilities: | |||
Warrants liabilities | 0 | 0 | |
Level 2 | Private placement warrants | |||
Financial liabilities: | |||
Warrants liabilities | 0.1 | 2.1 | |
Level 2 | U.S. government and agencies | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Short-term investments | 0 | 9.1 | |
Level 2 | Commercial paper | |||
Financial assets: | |||
Short-term investments | 146.5 | ||
Level 2 | States and other territories | |||
Financial assets: | |||
Fixed maturities available-for-sale | 8.3 | 5.7 | |
Level 2 | Corporate securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 52.5 | 17.1 | |
Short-term investments | 49.4 | ||
Level 2 | Foreign securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0.8 | 0.9 | |
Level 2 | Residential mortgage-backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 18.9 | 10.6 | |
Level 2 | Commercial mortgage-backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 5.8 | 4.7 | |
Level 2 | Asset backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 13.7 | 6.6 | |
Level 3 | |||
Financial assets: | |||
Cash, cash equivalents, and restricted cash | 0 | 0 | |
Fixed maturities available-for-sale | 0 | 0 | |
Short-term investments | 0 | ||
Total financial assets | 0 | 0 | |
Financial liabilities: | |||
Contingent consideration liability | 11.9 | 11.6 | |
Total financial liabilities | 11.9 | 11.6 | |
Level 3 | Public warrants | |||
Financial liabilities: | |||
Warrants liabilities | 0 | 0 | |
Level 3 | Private placement warrants | |||
Financial liabilities: | |||
Warrants liabilities | 0 | 0 | |
Level 3 | U.S. government and agencies | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Short-term investments | 0 | 0 | |
Level 3 | Commercial paper | |||
Financial assets: | |||
Short-term investments | 0 | ||
Level 3 | States and other territories | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 3 | Corporate securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Short-term investments | 0 | ||
Level 3 | Foreign securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 3 | Residential mortgage-backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 3 | Commercial mortgage-backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | 0 | 0 | |
Level 3 | Asset backed securities | |||
Financial assets: | |||
Fixed maturities available-for-sale | $ 0 | $ 0 |
Fair Value Measurement - Change
Fair Value Measurement - Changes in Fair Value (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Changes in fair value | $ (4) | $ (10.3) |
Preferred Stock Warrant | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liability, beginning balance | 0 | 22.9 |
Changes in fair value | 121.6 | |
Settlement/Payments | (144.5) | |
Liability, ending balance | 0 | |
Warrant liability | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liability, beginning balance | 4.3 | 0 |
Initial measurement of new derivative | 0 | 14.6 |
Changes in fair value | (4) | (10.3) |
Liability, ending balance | 0.3 | 4.3 |
Contingent Consideration | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liability, beginning balance | 11.6 | 12 |
Changes in fair value | 4.1 | 3.5 |
Settlement/Payments | (3.8) | (3.9) |
Liability, ending balance | 11.9 | 11.6 |
Embedded Derivative Liability | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Liability, beginning balance | $ 0 | 113.3 |
Initial measurement of new derivative | 2.8 | |
Changes in fair value | 61.4 | |
Settlement/Payments | (177.5) | |
Liability, ending balance | $ 0 |
Fair Value Measurement - Narrat
Fair Value Measurement - Narrative (Details) shares in Millions | Aug. 02, 2021 shares | Dec. 31, 2021 | Aug. 31, 2021 shares |
Minimum | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Convertible promissory notes, conversion period | 0 years | ||
Maximum | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Convertible promissory notes, conversion period | 2 years 7 months 6 days | ||
Discount rate | Income approach | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Convertible promissory notes, measurement input | 0.10 | ||
Convertible preferred stock (on an as if converted basis) | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Number of securities called by warrants or rights (in shares) | 0.1 | 0.1 | |
Common Stock | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Number of securities called by each warrants or rights (in shares) | 0.7 | 0.7 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Roll Forward] | |||
Beginning balance | $ 53.5 | $ 47.8 | |
Additions from acquisitions | 5.2 | ||
Other adjustments | 0.5 | ||
Impairment charges | $ (53.5) | (53.5) | |
Ending balance | $ 0 | $ 53.5 |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (12.5) | $ (11.2) |
Net Carrying Amount | 16.4 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 39.4 | 43.4 |
Accumulated Amortization | (12.5) | (11.2) |
Net Carrying Amount | 26.9 | 32.2 |
Amortization expense related to intangible assets | 5.3 | 5.7 |
State licenses and domain name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Net Carrying Amount | $ 10.5 | 10.5 |
Agency and carrier relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Useful Life Remaining (in years) | 6 years | |
Gross Carrying Amount | $ 13.5 | 13.5 |
Accumulated Amortization | (3.4) | (1.7) |
Net Carrying Amount | 10.1 | 11.8 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (3.4) | (1.7) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Useful Life Remaining (in years) | 2 years 3 months 18 days | |
Gross Carrying Amount | $ 13.7 | 13.7 |
Accumulated Amortization | (8.5) | (6) |
Net Carrying Amount | 5.2 | 7.7 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated Amortization | (8.5) | (6) |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 0 | 3.6 |
Accumulated Amortization | 0 | (2.7) |
Net Carrying Amount | 0 | 0.9 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated Amortization | 0 | (2.7) |
Value of business acquired | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 0 | 0.1 |
Accumulated Amortization | 0 | (0.1) |
Net Carrying Amount | 0 | 0 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ 0 | (0.1) |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted- Average Useful Life Remaining (in years) | 6 years 1 month 6 days | |
Gross Carrying Amount | $ 1.7 | 2 |
Accumulated Amortization | (0.6) | (0.7) |
Net Carrying Amount | 1.1 | 1.3 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (0.6) | $ (0.7) |
Intangible Assets - Amortizatio
Intangible Assets - Amortization Expense for Intangible Assets (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 4.3 |
2024 | 4.1 |
2025 | 2.5 |
2026 | 1.8 |
2027 | 1.8 |
Thereafter | 1.9 |
Net Carrying Amount | $ 16.4 |
Capitalized Internal Use Soft_3
Capitalized Internal Use Software (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Research and Development [Abstract] | ||
Capitalized internal use software | $ 56.4 | $ 34.5 |
Less: accumulated amortization | (17.6) | (8.6) |
Capitalized internal use software | 38.8 | 25.9 |
Amortization expense | $ 9 | $ 4.9 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 17.4 | $ 21.2 |
Claims receivable | 9 | 24.4 |
Lease right-of-use assets | 27.6 | 0 |
Property and equipment | 5.4 | 1.1 |
Other | 4.2 | 5.1 |
Total other assets | $ 63.6 | $ 51.8 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Claim payments outstanding | $ 27.7 | $ 23.2 |
Lease liability | 28.9 | 0 |
Advances from customers | 10.2 | 8.7 |
Deferred revenue | 11 | 11.2 |
Employee related accruals | 6.2 | 8.5 |
Premium refund liability | 8.2 | 4.8 |
Fiduciary liabilities | 6.6 | 3.7 |
Contingent consideration liability | 11.9 | 11.6 |
Other | 17.5 | 23.7 |
Total accrued expenses and other liabilities | $ 128.2 | $ 95.4 |
Loss and Loss Adjustment Expe_3
Loss and Loss Adjustment Expense Reserves - Reconciliation of Losses and Loss Adjustment Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE as of beginning of the period | $ 260.8 | $ 105.1 |
Reinsurance recoverables on unpaid losses and LAE | (216.8) | (92.1) |
Reserve for losses and LAE, net of reinsurance recoverables as of beginning of the period | 44 | 13 |
Add: Incurred losses and LAE, net of reinsurance, related to: | ||
Current year | 113.2 | 85 |
Prior years | (11.8) | (0.6) |
Total incurred | 101.4 | 84.4 |
Deduct: Loss and LAE payments, net of reinsurance, related to: | ||
Current year | 56.7 | 43.6 |
Prior year | 23.7 | 9.8 |
Total paid | 80.4 | 53.4 |
Reserve for losses and LAE, net of reinsurance recoverables at end of period | 65 | 44 |
Add: Reinsurance recoverables on unpaid losses and LAE at end of period | 228.8 | 216.8 |
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE as of end of the period | 293.8 | $ 260.8 |
Attritional reserves release | 5.8 | |
Catastrophe reserves release | $ 6 |
Loss and Loss Adjustment Expe_4
Loss and Loss Adjustment Expense Reserves - Incurred and Paid Claims Development (Details) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2022 USD ($) claim segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Dec. 31, 2018 USD ($) | Dec. 31, 2017 USD ($) | Dec. 31, 2016 USD ($) | |
Insurance [Abstract] | |||||||
Number of operating segment | segment | 1 | ||||||
Number of reportable segment | segment | 1 | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total incurred Loss and Loss Adjustment Expenses, net | $ 205.1 | ||||||
IBNR | $ 47.3 | ||||||
Cumulative Number of Reported Claims | claim | 135,978 | ||||||
2016 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total incurred Loss and Loss Adjustment Expenses, net | $ 1.8 | $ 1.8 | $ 1.8 | $ 1.8 | $ 1.9 | $ 1.9 | $ 2.5 |
IBNR | $ 0 | ||||||
Cumulative Number of Reported Claims | claim | 711 | ||||||
2017 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total incurred Loss and Loss Adjustment Expenses, net | $ 4 | 4.1 | 4 | 4 | 5.4 | $ 5.2 | |
IBNR | $ 0 | ||||||
Cumulative Number of Reported Claims | claim | 3,071 | ||||||
2018 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total incurred Loss and Loss Adjustment Expenses, net | $ 6.8 | 7.2 | 7.2 | 7.2 | $ 7.8 | ||
IBNR | $ 0.1 | ||||||
Cumulative Number of Reported Claims | claim | 5,927 | ||||||
2019 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total incurred Loss and Loss Adjustment Expenses, net | $ 4.8 | 4.7 | 4.8 | $ 4.8 | |||
IBNR | $ 0 | ||||||
Cumulative Number of Reported Claims | claim | 14,943 | ||||||
2020 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total incurred Loss and Loss Adjustment Expenses, net | $ 29.9 | 28.1 | $ 28.6 | ||||
IBNR | $ 0.8 | ||||||
Cumulative Number of Reported Claims | claim | 30,235 | ||||||
2021 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total incurred Loss and Loss Adjustment Expenses, net | $ 63.5 | $ 76.7 | |||||
IBNR | $ 4.6 | ||||||
Cumulative Number of Reported Claims | claim | 40,878 | ||||||
2022 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total incurred Loss and Loss Adjustment Expenses, net | $ 94.3 | ||||||
IBNR | $ 41.8 | ||||||
Cumulative Number of Reported Claims | claim | 40,213 |
Loss and Loss Adjustment Expe_5
Loss and Loss Adjustment Expense Reserves - Cumulative Paid Losses and LAE (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total paid losses and LAE, net | $ 140.1 | ||||||
Total unpaid loss and LAE reserves, net | 65 | ||||||
Ceded unpaid loss and LAE | 228.8 | $ 216.8 | $ 92.1 | ||||
Gross unpaid loss and LAE | 293.8 | 260.8 | 105.1 | ||||
2016 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total paid losses and LAE, net | 1.8 | 1.8 | 1.8 | $ 1.8 | $ 1.9 | $ 1.8 | $ 1.2 |
2017 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total paid losses and LAE, net | 4 | 4 | 4 | 4 | 4 | $ 3 | |
2018 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total paid losses and LAE, net | 6.7 | 5.8 | 5.7 | 5.7 | $ 5.3 | ||
2019 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total paid losses and LAE, net | 4.7 | 4.6 | 4.4 | $ 3.2 | |||
2020 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total paid losses and LAE, net | 28.8 | 26.8 | $ 1.8 | ||||
2021 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total paid losses and LAE, net | 55.8 | $ 35.3 | |||||
2022 | |||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||||
Total paid losses and LAE, net | $ 38.3 |
Loss and Loss Adjustment Expe_6
Loss and Loss Adjustment Expense Reserves - Historical Claim Duration (Details) - Property and Casualty | Dec. 31, 2022 |
Years [Line Items] | |
1 | 56% |
2 | 35% |
3 | 3% |
4 | 1% |
5 | 5% |
Loss and Loss Adjustment Expe_7
Loss and Loss Adjustment Expense Reserves - Reconciliation of Net Incurred and Paid Loss (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Incurred | ||
Development table | $ 94.3 | $ 76.7 |
Unallocated loss adjustment expense | 18.9 | 8.3 |
Other | 0 | 0 |
Current year | 113.2 | 85 |
Paid | ||
Development table | 38.3 | 35.3 |
Unallocated loss adjustment expense | 18.9 | 8.3 |
Other | (0.5) | 0 |
Current year | $ 56.7 | $ 43.6 |
Reinsurance - Narrative (Detail
Reinsurance - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) reinsurer | Dec. 31, 2021 USD ($) reinsurer | |
Effects of Reinsurance [Line Items] | ||
Loss on uncollectible accounts in period | $ 0 | $ 0 |
Provision for sliding scale commission | 3,500,000 | 8,600,000 |
Receivable for sliding scale commission | 4,500,000 | 2,700,000 |
Provision for loss participation feature | $ 51,300,000 | $ 8,300,000 |
Reinsurance Policy, Type [Axis]: Other Reinsurance - Corporate Catastrophe Excess of Loss Catastrophe Coverage | ||
Effects of Reinsurance [Line Items] | ||
Excess retention, year return period, ratio | 0.004 | |
Reinsurance Policy, Type [Axis]: Other Reinsurance - Corporate Catastrophe Excess of Loss Catastrophe Coverage | Maximum | ||
Effects of Reinsurance [Line Items] | ||
Excess retention, percentage | 0.40% | |
Reinsurance Policy, Type [Axis]: Other Reinsurance - Proportional and Excess of Loss Catastrophe Coverage | Minimum | ||
Effects of Reinsurance [Line Items] | ||
Ceded risk, percentage | 75% | |
Reinsurance Policy, Type [Axis]: Other Reinsurance - Proportional and Excess of Loss Catastrophe Coverage | Maximum | ||
Effects of Reinsurance [Line Items] | ||
Ceded risk, percentage | 100% | |
Reinsurance Policy, Type [Axis]: Proportional Reinsurance Treaties | ||
Effects of Reinsurance [Line Items] | ||
Reinsurance, number of third-party reinsurers | reinsurer | 11 | 9 |
Reinsured risk, percentage | 10% | 12% |
Number of reinsurers | reinsurer | 2 | |
Percentage attributable to program | 33% | |
Agreement term | 3 years |
Reinsurance - Ceded Reinsurance
Reinsurance - Ceded Reinsurance (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Written Premiums | ||
Direct | $ 628.3 | $ 474 |
Assumed | 1.6 | 3.3 |
Gross | 629.9 | 477.3 |
Ceded | (580.3) | (434.8) |
Net | 49.6 | 42.5 |
Earned Premiums | ||
Direct | 541.1 | 364.7 |
Assumed | 0.4 | 9.8 |
Gross | 541.5 | 374.5 |
Ceded | (499) | (335.6) |
Net | 42.5 | 38.9 |
Loss and LAE Incurred | ||
Direct | 409.6 | 498.5 |
Assumed | 0.1 | 16.9 |
Gross | 409.7 | 515.4 |
Ceded | (308.3) | (431) |
Net | $ 101.4 | $ 84.4 |
Reinsurance - Amount Recoverabl
Reinsurance - Amount Recoverable From Reinsurers (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Insurance [Abstract] | |||
Reinsurance recoverable on paid loss | $ 57.5 | $ 50.1 | |
Ceded unpaid loss and LAE | 228.8 | 216.8 | $ 92.1 |
Total reinsurance recoverable | $ 286.3 | $ 266.9 |
Reinsurance - Unsecured Reinsur
Reinsurance - Unsecured Reinsurance Recoverable and Prepaid Reinsurance Premium Balances (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | $ 356 | $ 321.1 |
Other reinsurers | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | 121.2 | 179.6 |
A+ | Everest Insurance Company | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | 55.3 | 65.7 |
A+ | Hannover Rück SE | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | 49.9 | 0 |
A+ | Munich Reinsurance America, Inc. | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | 34.3 | 18.3 |
A+ | Digital Advantage Insurance Company | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | 19.4 | 0 |
A+ | Partner Reinsurance Company Ltd. | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | 18.7 | 0 |
A+ | Partner Reinsurance Company of the U.S. | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | 15 | 0 |
A | Validus Reinsurance (Switzerland) Ltd. | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | 42.2 | 57.5 |
Rated | ||
Ceded Credit Risk [Line Items] | ||
Unsecured reinsurance recoverable and prepaid reinsurance premium | $ 234.8 | $ 141.5 |
Geographical Breakdown of Gro_3
Geographical Breakdown of Gross Written Premium (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Gross Written Premium [Line Items] | ||
Amount | $ 629.9 | $ 477.3 |
Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 100% | 100% |
Texas | ||
Gross Written Premium [Line Items] | ||
Amount | $ 155.6 | $ 139.2 |
Texas | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 24.70% | 29.20% |
California | ||
Gross Written Premium [Line Items] | ||
Amount | $ 116.3 | $ 85.2 |
California | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 18.50% | 17.90% |
Florida | ||
Gross Written Premium [Line Items] | ||
Amount | $ 55.4 | $ 26.8 |
Florida | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 8.80% | 5.60% |
Georgia | ||
Gross Written Premium [Line Items] | ||
Amount | $ 29.3 | $ 22 |
Georgia | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 4.70% | 4.60% |
Illinois | ||
Gross Written Premium [Line Items] | ||
Amount | $ 22.7 | $ 19.1 |
Illinois | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 3.60% | 4% |
Colorado | ||
Gross Written Premium [Line Items] | ||
Amount | $ 19.3 | $ 13.6 |
Colorado | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 3.10% | 2.80% |
Missouri | ||
Gross Written Premium [Line Items] | ||
Amount | $ 15 | $ 13 |
Missouri | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 2.40% | 2.70% |
Arizona | ||
Gross Written Premium [Line Items] | ||
Amount | $ 14.3 | $ 11.4 |
Arizona | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 2.30% | 2.40% |
Ohio | ||
Gross Written Premium [Line Items] | ||
Amount | $ 13.8 | $ 10.5 |
Ohio | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 2.20% | 2.20% |
New Jersey | ||
Gross Written Premium [Line Items] | ||
Amount | $ 14 | $ 10.4 |
New Jersey | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 2.20% | 2.20% |
Other | ||
Gross Written Premium [Line Items] | ||
Amount | $ 174.2 | $ 126.1 |
Other | Geographic Concentration Risk | Gross written premium | ||
Gross Written Premium [Line Items] | ||
Concentration risk, percentage | 27.70% | 26.40% |
Convertible Promissory Notes _2
Convertible Promissory Notes and Derivative Liability (Details) shares in Millions | 12 Months Ended | ||||
Aug. 02, 2021 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Feb. 21, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||
Gain on extinguishment of debt | $ 0 | $ 47,000,000 | |||
Convertible promissory note | |||||
Debt Instrument [Line Items] | |||||
Face amount | $ 7,000,000 | $ 377,500,000 | |||
Interest rate | 2.50% | ||||
Fair value of embedded derivatives | $ 110,000,000 | ||||
Threshold percentage of stock price trigger | 90% | ||||
Convertible promissory notes | $ 304,000,000 | ||||
Deferred discount and issuance costs | 86,900,000 | ||||
Derivative liability | $ 177,500,000 | ||||
Derivative Liability Statement Of Financial Position Extensible Enumeration Not Disclosed Flag | derivative liability | ||||
Gain on extinguishment of debt | $ 47,000,000 | ||||
Convertible promissory note | Common Stock | |||||
Debt Instrument [Line Items] | |||||
Convertible, number of equity instruments (in shares) | shares | 1.8 | ||||
Convertible promissory note | Conversion event has not occurred | |||||
Debt Instrument [Line Items] | |||||
Interest rate, increase (decrease) | 2.50% | ||||
Interest rate, stated percentage, maximum after rate increase | 7.50% | ||||
Convertible promissory note | Conversion event has not occurred, 15 month after | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage, maximum after rate increase | 5% | ||||
Interest rate adjustment, period after issuance | 15 months | ||||
Convertible promissory note | Conversion event has not occurred, 21 month after | |||||
Debt Instrument [Line Items] | |||||
Interest rate, stated percentage, maximum after rate increase | 5% | ||||
Interest rate adjustment, period after issuance | 21 months |
Public Warrants and Private P_2
Public Warrants and Private Placement Warrants (Details) - Reinvent Technology Partners Z shares in Millions | Nov. 30, 2020 $ / shares shares |
Public warrants | |
Class of Warrant or Right [Line Items] | |
Warrant shares outstanding (in shares) | shares | 4.6 |
Private placement warrants | |
Class of Warrant or Right [Line Items] | |
Warrant shares outstanding (in shares) | shares | 4.4 |
Common stock warrant | |
Class of Warrant or Right [Line Items] | |
Conversion ratio | 1 |
Common Class A | Public warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 287.50 |
Common Class A | Private placement warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 287.50 |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) $ in Millions | Dec. 31, 2022 USD ($) | Nov. 19, 2021 cause |
Loss Contingencies [Line Items] | ||
Purchase obligation, term | 3 years | |
Purchase obligation | $ | $ 11.4 | |
Litigation, Hippo and Chief Executive Officer Named Defendants | Pending Litigation | ||
Loss Contingencies [Line Items] | ||
Loss contingency, pending causes of action, number | 6 | |
Litigation, Hippo Named Defendant Only | Pending Litigation | ||
Loss Contingencies [Line Items] | ||
Loss contingency, pending causes of action, number | 2 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Renewal term | 5 years | |
Operating lease, expense | $ 5.2 | |
Rent expense | $ 3.1 |
Leases - Weighted Average Remai
Leases - Weighted Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2022 |
Leases [Abstract] | |
Weighted average remaining lease term | 5 years 18 days |
Weighted average discount rate | 4.90% |
Leases - Maturity (Details)
Leases - Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Leases [Abstract] | ||
2023 | $ 6.7 | |
2024 | 7.2 | |
2025 | 6.7 | |
2026 | 5.4 | |
2027 | 2.4 | |
Thereafter | 4.6 | |
Total undiscounted lease payments | 33 | |
Less: Imputed interest | (4.1) | |
Present value of lease payments | $ 28.9 | $ 0 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flow Information (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Leases [Abstract] | |
Cash paid for operating lease liabilities | $ (4.4) |
Right-of-use assets obtained in exchange for new operating liabilities | $ 15,000,000 |
Convertible Preferred Stock - N
Convertible Preferred Stock - Narrative (Details) - shares | 12 Months Ended | ||||
Aug. 02, 2021 | Dec. 31, 2022 | Aug. 31, 2021 | Oct. 31, 2018 | Mar. 31, 2017 | |
Series A-2 Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Warrant shares outstanding (in shares) | 1,100 | ||||
Series C-1 Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Warrant shares outstanding (in shares) | 100,000 | ||||
Convertible Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Issuances during period (in shares) | 0 | ||||
Number of securities called by warrants or rights (in shares) | 100,000 | 100,000 | |||
Common Stock | |||||
Temporary Equity [Line Items] | |||||
Convertible preferred stock conversion (in shares) | 12,900,000 | ||||
Number of securities called by each warrants or rights (in shares) | 700,000 | 700,000 |
Stockholders_ Equity - Narrativ
Stockholders’ Equity - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Aug. 02, 2021 USD ($) vote $ / shares shares | Dec. 31, 2020 USD ($) shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2019 USD ($) shares | Feb. 28, 2018 shares | Dec. 31, 2017 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock, shares authorized (in shares) | 80,000,000 | 80,000,000 | 80,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Number of voting rights | vote | 1 | ||||||
Stock converted, reverse recapitalization (in shares) | 19,809,704 | ||||||
Sale of stock, number of shares issued in transaction (in shares) | 2,200,000 | ||||||
Sale of stock, consideration received on transaction | $ | $ 550,000 | ||||||
Aggregate intrinsic value of options exercised | $ | $ 3,700 | $ 38,900 | |||||
Weighted average grant date, fair value (in dollars per share) | $ / shares | $ 15.24 | $ 56 | |||||
Exercises in period, forgiveness (in shares) | 400,000 | ||||||
Exercises in period, forgiveness, intrinsic value | $ | $ 94,000 | ||||||
Early exercise of stock options liability for unvested awards | $ | $ 1,400 | $ 2,200 | |||||
Number of shares subject to repurchase related to early exercise of stock option (in shares) | 100,000 | 100,000 | |||||
Executive Officer | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Plan modification, incremental charge | $ | $ 2,600 | ||||||
the 2019 Stock Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Purchase price of common stock, percent | 100% | ||||||
2021 Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares authorized for issuance (in shares) | 3,100,000 | ||||||
Percentage of issued and outstanding stock, maximum | 5% | ||||||
2021 Plan | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
2021 Plan | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Common Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock converted, reverse recapitalization (in shares) | 19,800,000 | ||||||
Warrant Issued on December 11, 2017 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant shares outstanding (in shares) | 200,000 | ||||||
Warrant Issued on February 19, 2018 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Warrant shares outstanding (in shares) | 200,000 | ||||||
Vested (in shares) | 2,500 | ||||||
Plan modification, incremental charge | $ | $ 1,000 | ||||||
Common stock warrant | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock issued during period, shares, warrants exercised (in shares) | 200,000 | ||||||
Cancelled (in shares) | 200,000 | ||||||
Common stock warrant | Common Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of securities called by warrants or rights (in shares) | 1,100,000 | ||||||
Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Plan modification, incremental charge | $ | $ 2,100 | ||||||
Unrecognized compensation cost | $ | $ 18,500 | ||||||
Unrecognized compensation cost, period for recognition | 1 year 6 months | ||||||
Expected term | 10 years | ||||||
Options | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected term | 5 years | 5 years 4 months 24 days | |||||
Options | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Expected term | 6 years 8 months 12 days | 6 years 6 months | |||||
Options | the 2019 Stock Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Term period | 10 years | ||||||
Vesting period | 4 years | ||||||
Restricted Stock Units and Performance Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 2,829,774 | 1,208,279 | |||||
Unrecognized compensation cost | $ | $ 99,800 | ||||||
Unrecognized compensation cost, period for recognition | 2 years 3 months 18 days | ||||||
Expected term | 4 years 1 month 6 days | ||||||
Restricted Stock Units | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 2 years | ||||||
Restricted Stock Units | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Restricted Stock Units | the 2019 Stock Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Performance Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Granted (in shares) | 1,100,000 | ||||||
Performance Restricted Stock Units | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 1 year | ||||||
Vesting, percentage of granted amount | 0% | ||||||
Performance Restricted Stock Units | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Vesting period | 4 years | ||||||
Vesting, percentage of granted amount | 100% | ||||||
Employee Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Purchase price of common stock, percent | 85% | ||||||
Number of shares authorized for issuance (in shares) | 500,000 | ||||||
Percentage of issued and outstanding stock, maximum | 1% | ||||||
Maximum employee subscription amount | $ | $ 25 | ||||||
Look back feature | 6 months | ||||||
Issued (in shares) | 100,000 | 0 |
Stockholders_ Equity - Instrume
Stockholders’ Equity - Instrument Activity Related to Business Acquisition (Details) | Aug. 02, 2021 shares | Aug. 01, 2021 shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding (in shares) | 20,189,704 | |
Exchange Ratio | 6.95433 | |
Old Hippo shares, net of repurchase (in shares) | 19,809,704 | |
Old Hippo preferred stock warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding (in shares) | 693,796 | 99,764 |
Exchange Ratio | 6.95433 | |
Old Hippo common stock warrants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding (in shares) | 1,088,102 | 156,463 |
Exchange Ratio | 6.95433 | |
Old Hippo common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding (in shares) | 4,434,337 | 637,636 |
Exchange Ratio | 6.95433 | |
Less: Repurchase of common stock (in shares) | (380,000) | |
Old Hippo convertible preferred stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding (in shares) | 12,235,497 | 1,759,407 |
Exchange Ratio | 6.95433 | |
Old Hippo convertible promissory notes | Old Hippo convertible promissory notes | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding (in shares) | 1,737,972 | 249,912 |
Exchange Ratio | 6.95433 | |
Common stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Less: Repurchase of common stock (in shares) | (380,000) | |
Old Hippo shares, net of repurchase (in shares) | 19,800,000 |
Stockholders_ Equity - Stock Op
Stockholders’ Equity - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Options Outstanding | |||
Outstanding, beginning balance (in shares) | 1,901,163 | 2,888,211 | |
Granted (in shares) | 625,578 | 387,421 | |
Exercised (in shares) | (145,525) | (913,892) | |
Cancelled/Expired (in shares) | (394,238) | (460,576) | |
Outstanding, ending balance (in shares) | 1,986,978 | 1,901,163 | 2,888,211 |
Vested and exercisable (in shares) | 1,060,363 | ||
Weighted Average Exercise Price | |||
Outstanding, beginning balance (in dollars per share) | $ 33.05 | $ 18.76 | |
Granted (in dollars per share) | 45.07 | 120.37 | |
Exercised (in dollars per share) | 13.80 | 12.10 | |
Cancelled/Expired (in dollars per share) | 41.61 | 51.24 | |
Outstanding, ending balance (in dollars per share) | 36.54 | $ 33.05 | $ 18.76 |
Vested and exercisable (in dollars per share) | $ 30.34 | ||
Additional Disclosures | |||
Outstanding, weighted-average remaining, contract term (in years) | 7 years 9 months 18 days | 8 years 3 months 18 days | 8 years 10 months 24 days |
Outstanding, aggregate intrinsic value | $ 1.3 | $ 84.8 | $ 108.9 |
Aggregate intrinsic value of options exercised | 3.7 | 38.9 | |
Aggregate intrinsic value of options cancelled/Expired | $ 2.2 | $ 13.9 | |
Vested and exercisable, weighted-average remaining, contract term (in years) | 7 years 4 months 24 days | ||
Vested and exercisable, aggregate intrinsic value | $ 1.2 |
Stockholders_ Equity - Stock _2
Stockholders’ Equity - Stock Option Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 10 years | |
Expected volatility, minimum | 29.60% | 29.60% |
Expected volatility, maximum | 30.90% | 30.10% |
Risk-free interest rate, minimum | 2.70% | 0.60% |
Risk-free interest rate, maximum | 3% | 1.40% |
Expected dividend yield | 0% | 0% |
Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 5 years | 5 years 4 months 24 days |
Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 6 years 8 months 12 days | 6 years 6 months |
Restricted Stock Units and Performance Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 4 years 1 month 6 days | |
Expected volatility | 95% | |
Risk-free interest rate | 2.90% | |
Expected dividend yield | 0% |
Stockholders_ Equity - Restrict
Stockholders’ Equity - Restricted Stock Units Activity (Details) - Restricted Stock Units and Performance Restricted Stock Units - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | ||
Outstanding, beginning balance (in shares) | 1,165,571 | 0 |
Granted (in shares) | 2,829,774 | 1,208,279 |
Vested (in shares) | (444,105) | (7,505) |
Canceled and forfeited (in shares) | (669,256) | (35,203) |
Outstanding, ending balance (in shares) | 2,881,984 | 1,165,571 |
Weighted Average Grant-Date Fair Value per Share | ||
Outstanding, beginning balance (in dollars per share) | $ 99.85 | $ 0 |
Granted (in dollars per share) | 30.49 | 99.83 |
Vested (in dollars per share) | 87.10 | 100.01 |
Canceled and forfeited (in dollars per share) | 67.89 | 99.19 |
Outstanding, ending balance (in dollars per share) | $ 41.15 | $ 99.85 |
Stockholders_ Equity - Share-ba
Stockholders’ Equity - Share-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 61.9 | $ 24.3 |
Losses and loss adjustment expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 2.6 | 0.6 |
Insurance related expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 5.4 | 1.1 |
Technology and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 19.2 | 6.8 |
Sales and marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 13.7 | 5 |
General and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 21 | $ 10.8 |
Income Taxes - Income (Loss) Be
Income Taxes - Income (Loss) Before Tax (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (333.5) | $ (371.3) |
Foreign | 1.4 | 0.6 |
Loss before income taxes attributable to Hippo | (332.1) | (370.7) |
Income before tax attributable to noncontrolling interests | 6.9 | 3.5 |
Loss before income taxes | $ (325.2) | $ (367.2) |
Income Taxes - Components of To
Income Taxes - Components of Total Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Loss before income taxes attributable to Hippo | $ (332.1) | $ (370.7) |
Income tax benefit from statutory rate | (69.8) | (77.9) |
Meals, entertainment & parking | 0.2 | 0.1 |
Deferred compensation | 6.6 | 27.8 |
Transaction costs | 0 | 0.1 |
State taxes | (9) | (7.2) |
Non-deductible interest | 0 | 5.5 |
Goodwill impairment | 8 | 0 |
Increase in valuation allowance | 66.8 | 53.4 |
Foreign taxes | 1.2 | 0.5 |
Other | (2.7) | (1.6) |
Income taxes expense | $ 1.3 | $ 0.7 |
Income Taxes - Components of Pr
Income Taxes - Components of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Current | ||
State | $ 0.1 | $ 0.2 |
Foreign | 1.2 | 0.5 |
Total current provision | 1.3 | 0.7 |
Deferred | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total deferred provision | 0 | 0 |
Income taxes expense | $ 1.3 | $ 0.7 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 127.7 | $ 87.4 |
Intangible assets | 8.5 | 3.5 |
Research and development credit | 6.7 | 2.4 |
Deferred compensation | 6.2 | 2.2 |
Unearned premium reserve | 1.6 | 1.2 |
Loss reserve discount | 0.8 | 0.6 |
Unrealized losses | 1.7 | 0.2 |
Lease liability | 5.6 | 3.7 |
Deferred revenue | 4.3 | 0 |
Capitalized software | 5.8 | 0 |
Other accruals | 0.7 | 3.5 |
Total deferred tax assets | 169.6 | 104.7 |
Valuation allowance | (161.5) | (93.2) |
Total deferred income tax assets | 8.1 | 11.5 |
Deferred tax liabilities | ||
Property and equipment | 0.5 | 0.3 |
Provision for commission slide and cancellation | 0.2 | 0.2 |
Capitalized software | 0 | 6.1 |
Acquired intangibles | 0 | 0.2 |
Deferred acquisition costs | 1.7 | 0.9 |
Right-of-use asset | 5.4 | 3.5 |
Other | 0.3 | 0.3 |
Total deferred tax liabilities | 8.1 | 11.5 |
Deferred income tax assets, net | $ 0 | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | $ 763,500,000 | |
Income tax examination, penalties and interest incurred | 0 | $ 0 |
RH Solutions Insurance (Cayman) Ltd. | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 93,700,000 | |
U.S. Federal | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 540,500,000 | |
U.S. Federal | Research Tax Credit Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward, amount | 6,100,000 | |
U.S. State | ||
Operating Loss Carryforwards [Line Items] | ||
Operating loss carryforwards | 223,000,000 | |
U.S. State | Research Tax Credit Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Tax credit carryforward, amount | $ 4,400,000 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning unrecognized tax benefits | $ 1.1 | $ 0 |
Increases related to tax positions from prior years | 0.7 | 0 |
Increases related to tax positions taken in the current year | 1.1 | 1.1 |
Ending unrecognized tax benefits | $ 2.9 | $ 1.1 |
Income Taxes - Components of Ne
Income Taxes - Components of Net Operating Loss Carryforwards (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | $ 325.8 |
Operating loss carryforwards, not subject to expiration | 437.7 |
Operating loss carryforwards | 763.5 |
U.S. Federal | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 102.8 |
Operating loss carryforwards, not subject to expiration | 437.7 |
Operating loss carryforwards | 540.5 |
U.S. State | |
Operating Loss Carryforwards [Line Items] | |
Operating loss carryforwards, subject to expiration | 223 |
Operating loss carryforwards, not subject to expiration | 0 |
Operating loss carryforwards | $ 223 |
Net Loss Per Share Attributab_3
Net Loss Per Share Attributable to Common Stockholders - Computation (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Net loss attributable to Hippo - basic | $ (333.4) | $ (371.4) |
Net loss attributable to Hippo - diluted | $ (333.4) | $ (371.4) |
Weighted-average shares used in computing net loss per share attributable to Hippo - basic (in shares) | 22,747,101 | 10,886,757 |
Weighted-average shares used in computing net loss per share attributable to Hippo - diluted (in shares) | 22,747,101 | 10,886,757 |
Net loss per share attributable to Hippo - basic (in dollars per share) | $ (14.66) | $ (34.11) |
Net loss per share attributable to Hippo - diluted (in dollars per share) | $ (14.66) | $ (34.11) |
Net Loss Per Share Attributab_4
Net Loss Per Share Attributable to Common Stockholders - Antidilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,305,326 | 3,627,053 |
Outstanding options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,986,978 | 1,901,163 |
Warrants to purchase common shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 360,000 | 360,000 |
Common stock subject to repurchase | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 76,364 | 200,319 |
RSU and PRSUs | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,881,984 | 1,165,571 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Aug. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 0 | $ 53.5 | $ 47.8 | |
Software Development and Engineering Consulting Firm | ||||
Business Acquisition [Line Items] | ||||
Consideration transferred | $ 7.8 | |||
Goodwill | 5.3 | |||
Acquired intangibles assets | 0.5 | |||
Net working capital | 2 | |||
Acquisition related costs | 0.4 | |||
Unrecognized compensation cost | $ 9.2 | |||
Unrecognized compensation cost, period for recognition | 18 months |
Statutory Financial Informati_3
Statutory Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statutory Accounting Practices [Line Items] | ||
Statutory Net Income (Loss) | $ (34.8) | $ (55.2) |
Statutory Capital and Surplus | 191.8 | 139.5 |
U.S. insurance subsidiaries | ||
Statutory Accounting Practices [Line Items] | ||
Statutory Net Income (Loss) | 1 | (0.5) |
Statutory Capital and Surplus | 164.9 | 131.8 |
International insurance subsidiary | ||
Statutory Accounting Practices [Line Items] | ||
Statutory Net Income (Loss) | (35.8) | (54.7) |
Statutory Capital and Surplus | $ 26.9 | $ 7.7 |
Dividend Restrictions (Details)
Dividend Restrictions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Statutory Accounting Practices [Line Items] | ||
Statutory surplus, balance | $ 191,800,000 | $ 139,500,000 |
Statutory net income amount | (34,800,000) | (55,200,000) |
Spinnaker Specialty Insurance Company (“SSIC”) | ||
Statutory Accounting Practices [Line Items] | ||
Statutory surplus, balance | 50,500,000 | 47,000,000 |
Statutory net income amount | 300,000 | 0 |
Mainsail Insurance Company (“MIC”) | ||
Statutory Accounting Practices [Line Items] | ||
Statutory surplus, balance | 15,100,000 | 10,000,000 |
Statutory net income amount | 100,000 | 0 |
RH Solutions Insurance (Cayman) Ltd. | ||
Statutory Accounting Practices [Line Items] | ||
Statutory amount available for dividend payments contingent on regulatory approval | 24,400,000 | 5,400,000 |
Statutory prescribed capital requirement | 2,300,000 | |
Illinois | ||
Statutory Accounting Practices [Line Items] | ||
Statutory amount available for dividend payments without regulatory approval | $ 14,700,000 | $ 11,700,000 |