NEW YORK - Hippo Enterprises Inc wants to transfer homeowners' insurance by using customer data to make it easier and faster to get coverage, the chief executive said in an interview.
The company, which has a value of $5 billion and is due to go public through a blank check company on Tuesday, is among a slew of insurtech listings that are trying to deter established insurers from taking business out for them.
I want to double down on tech, data and more capabilities, CEO Hippo said of the $638 million he will receive in proceeds from the listing.
Geico Corp and Progressive Corp are companies that mirror Hippo's sales ambitions, which have made the auto insurance market more competitive.
Envision to get there, Wand said that Hippo plans to develop algorithms that speed up policy quotes and create new products.
Hippo is backed by Silicon Valley entrepreneurs Reid Hoffman and Mark Pincus. Founded in 2015, it offers coverage for renters and has products for other homeowner headaches that insurers traditionally do not cover, like upkeep, security, repairs and ultimately selling the place.
For example, Hippo provides sensors that chirp when water leaks under a kitchen sink, so a plumber can be called to prevent serious damage. That helps the homeowner, but also reduces Hippo's amount in claims. Similarly, outside motion detectors can help prevent burglaries.
Hippo is going public through Reinvest Technology Partners, its special purpose acquisition company, and will begin trading as Hippo Holdings Inc. on Tuesday.
The company reported total written premiums from Hippo to $145.0 million in 2018. It is forecasting $544 million this year and $2.28 billion by 2025.
Hippo's grown extraordinarily fast, said Tom Morton, senior analyst at S&P Global Market Intelligence. The real estate market is so hot, that's a big part of their growth.
Another newly listed insurtechs like Lemonade Inc and Porch Group Inc have gone up since their listings.
Morton says there are risks from a downturn in the housing market, but more money is going to come in, he added. Also, insurtech investors generally need to show sustained profitability to win out investors, said Robert Le, analyst at PitchBook.
High-growth insurtech companies with high loss ratios are risky, Le said.
Spinnaker Insurance Co bought property and casualty insurer Hippo last year, gaining licenses in all 50 states. It currently sells in 37 states, reaching about 80% of U.S. homeowners and anticipates to increase to 90% in the next few years.