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Segments
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Segments
17. Segments
Starting with the first quarter of 2023, the Company realigned its internal reporting to reflect how the Company now manages and monitors its operating results. As a result of these changes, the Company now has three reportable segments: Services, Insurance-as-a-Service, and Hippo Home Insurance Program.
The Company’s Services segment earns fees and/or commission income without assuming underwriting risk or need for reinsurance. The Company also partners with home builders, as well as independent agencies, to source insureds seeking a product for which the Company provides the best carrier for the insured whether it be of Hippo or a third-party carrier, including other insurance products like auto, rental, etc.
Insurance-as-a-Service is managed through the Company’s subsidiary Spinnaker and is a platform to support third party MGAs. The Company rents its capital, 50 state licenses and the strong financial rating of Spinnaker (rated “A-” Excellent by A.M. Best) to earn fee-based revenues with the assumption of limited underwriting risk using quota-share reinsurance. The Company also earns a portion of the premiums paid to it for the risk the Company retains as well as generates investment income. The diversification of the Company’s balance sheet allows it to carry less capital than the Company’s MGA clients would be required to on their own.
The Hippo Home Insurance Program is the Company’s Hippo-branded homeowners insurance business. The Company’s main source of revenue is the premiums paid to it by the Company’s homeowner customers. In addition, the Company’s revenues include commissions for premiums the Company cedes to third parties, policy and services fees and investment income. The Company’s strategy is to retain the portion of the underwriting risk where the Company believes its loss prevention strategies are the most effective.
The Company’s Chief Executive Officer, who serves as the chief operating decision maker (“CODM”), evaluates the financial performance of the Company’s segments based upon segment revenues and segment adjusted operating income or (loss) as the profitability measure. Items outside of adjusted operating income or (loss) are not reported by segment, since they are excluded from the single measure of segment profitability reviewed by the CODM. The Company’s CODM does not use segment assets to allocate resources or to assess performance of the segments and, therefore, segment assets have not been reported separately.
The tables below present segment information reconciled to total Net Loss attributable to Hippo, for the periods indicated (in millions). Financial information for the period ended September 30, 2022 has been revised to conform with the current year presentation.
Three Months Ended September 30, 2023
ServicesInsurance-as-a-ServiceHippo Home Insurance Program
Intersegment Eliminations(1)
Total
Revenue:
Net earned premium$— $12.2 $20.7 $— $32.9 
Commission income, net11.55.4(0.5)(2.2)14.2
Service and fee income0.1—4.8—4.9
Net investment income —1.83.9—5.7
Total Revenue11.619.428.9(2.2)57.7
Adjusted Operating Expenses:
Loss and loss adjustment expense— 5.2 31.0 — 36.2 
Insurance related expense— 7.1 9.4 (0.7)15.8 
Sales and marketing10.6 — 4.3 (0.9)14.0 
Technology and development4.5 0.2 4.3 — 9.0 
General and administrative3.3 1.5 7.7 — 12.5 
Other expenses0.1 — — — 0.1 
Total adjusted operating expenses18.5 14.0 56.7 (1.6)87.6 
Less: Net investment income— (1.8)(3.9)— (5.7)
Less: Noncontrolling interest(2.8)— — — (2.8)
Adjusted operating income (loss)(9.7)3.6 (31.7)(0.6)(38.4)
Net investment income5.7
Depreciation and amortization(4.9)
Stock-based compensation(14.0)
Fair value adjustments0.2
Contingent consideration charge(0.8)
Other one-off transactions(1.2)
Income tax benefit
0.3
Net loss attributable to Hippo$(53.1)

(1)Intersegment eliminations include commissions paid from Hippo Home Insurance Program for policies sold by the Company’s Services segment (revenue, cost, and other adjustments in respective business units eliminated as part of consolidation).
Three Months Ended September 30, 2022
ServicesInsurance-as-a-ServiceHippo Home Insurance Program
Intersegment Eliminations(1)
Total
Revenue:
Net earned premium$— $6.2 $4.5 $— $10.7 
Commission income, net9.43.16.9(5.1)14.3
Service and fee income0.1—3.1—3.2
Net investment income—0.71.8—2.5
Total Revenue9.510.016.3(5.1)30.7
Adjusted Operating Expenses:
Loss and loss adjustment expense— 6.0 17.4 — 23.4 
Insurance related expense— 0.2 16.7 (5.1)11.8 
Sales and marketing19.8 — 4.1 — 23.9 
Technology and development1.8 — 7.6 — 9.4 
General and administrative2.2 1.1 9.5 — 12.8 
Other expenses— — — — — 
Total adjusted operating expenses23.8 7.3 55.3 (5.1)81.3 
Less: Net investment income— (0.7)(1.8)— (2.5)
Less: Noncontrolling interest(1.7)— — — (1.7)
Adjusted operating loss(16.0)2.0 (40.8)— (54.8)
Net investment income2.5
Depreciation and amortization(3.8)
Stock-based compensation(17.0)
Fair value adjustments0.2
Contingent consideration charge(0.2)
Other one-off transactions(0.5)
Income tax expense(0.3)
Restructuring charges(1.8)
Goodwill impairment charge(53.5)
Net loss attributable to Hippo$(129.2)

(1)Intersegment eliminations include commissions paid from Hippo Home Insurance Program for policies sold by the Company’s Services segment (revenue, cost, and other adjustments in respective business units eliminated as part of consolidation).
Nine Months Ended September 30, 2023
ServicesInsurance-as-a-ServiceHippo Home Insurance Program
Intersegment Eliminations(1)
Total
Revenue:
Net earned premium$— $29.7 $39.3 $— $69.0 
Commission income, net32.414.18.5(7.2)47.8
Service and fee income0.4—11.5—11.9
Net investment income—4.811.7—16.5
Total Revenue32.848.671.0(7.2)145.2
Adjusted Operating Expenses:
Loss and loss adjustment expense— 11.7 138.2 — 149.9 
Insurance related expense— 16.0 27.9 (2.3)41.6 
Sales and marketing33.9 — 14.4 (3.3)45.0 
Technology and development12.3 0.5 13.6 — 26.4 
General and administrative9.3 4.1 23.1 — 36.5 
Other expenses0.5 — — — 0.5 
Total adjusted operating expenses56.0 32.3 217.2 (5.6)299.9 
Less: Net investment income— (4.8)(11.7)— (16.5)
Less: Noncontrolling interest(7.1)— — — (7.1)
Adjusted operating income (loss)(30.3)11.5 (157.9)(1.6)(178.3)
Net investment income16.5
Depreciation and amortization(14.4)
Stock-based compensation(46.8)
Fair value adjustments0.2
Contingent consideration charge(4.5)
Other one-off transactions(3.3)
Income tax expense(0.2)
Net loss attributable to Hippo$(230.8)
(1)Intersegment eliminations include commissions paid from Hippo Home Insurance Program for policies sold by the Company’s Services segment (revenue, cost, and other adjustments in respective business units eliminated as part of consolidation).
Nine Months Ended September 30, 2022
ServicesInsurance-as-a-ServiceHippo Home Insurance Program
Intersegment Eliminations(1)
Total
Revenue:
Net earned premium$— $15.6 $15.3 $— $30.9 
Commission income, net25.08.118.1(12.5)38.7
Service and fee income0.8—9.5—10.3
Net investment income—1.32.7—4.0
Total Revenue25.825.045.6(12.5)83.9
Adjusted Operating Expenses:
Loss and loss adjustment expense— 9.9 63.9 — 73.8 
Insurance related expense— 6.5 41.9 (12.5)35.9 
Sales and marketing44.5 0.2 13.8 — 58.5 
Technology and development5.3 — 23.1 — 28.4 
General and administrative6.8 3.3 27.5 — 37.6 
Other expenses0.5 — — — 0.5 
Total adjusted operating expenses57.1 19.9 170.2 (12.5)234.7 
Less: Net investment income— (1.3)(2.7)— (4.0)
Less: Noncontrolling interest(4.3)— — — (4.3)
Adjusted operating income (loss)(35.6)3.8 (127.3)— (159.1)
Net investment income4.0
Depreciation and amortization(11.2)
Stock-based compensation(46.3)
Fair value adjustments2.8
Contingent consideration charge(2.6)
Other one-off transactions(1.8)
Income tax expense(0.8)
Restructuring charges(1.8)
Goodwill impairment charge(53.5)
Net loss attributable to Hippo$(270.3)
(1)Intersegment eliminations include commissions paid from Hippo Home Insurance Program for policies sold by the Company’s Services segment (revenue, cost, and other adjustments in respective business units eliminated as part of consolidation).