Hippo Raises Its 2026 Guidance After a 98.4% Combined Ratio and 60% Premium Growth, as Casualty Triples Its Share and Homeowners Falls to 23% of Written Premium

Hippo Holdings reported third-quarter 2026 results on October 29 that show a company changing shape. The headline figures are strong: gross written premium of $498 million, up 60.1% from $311 million a year earlier, revenue of $156 million, up 29.4%, and a combined ratio of 98.4%. The quarter also included a sharp drop in reported net income, which fell to $9 million from $98 million, but that comparison is distorted by a one-off item in the prior year. This article draws on the company's own release, of which only the first 100,000 characters could be reviewed, so some detail is not covered.

Reported and adjusted profit

Net income was $9 million, or $0.33 per diluted share, compared with $98 million in the third quarter of 2025. The company says the prior-year figure included a $91 million net gain on the sale of its home builder distribution network. Excluding that, the two quarters are far closer. Adjusted net income, a non-GAAP measure, was $20 million, or $0.74 per diluted share, up 9.3% from $18.3 million. For the first nine months, net income was $26.0 million against $51.7 million, while adjusted net income was $58.2 million against $0.2 million. Adjusted diluted earnings per share for nine months were $2.19 against $0.01. The adjusted figures are management's chosen measure, and investors should read the reconciliation in the full release.

Premium growth and retention

Gross written premium, the total premium on policies written before reinsurance, was $498 million, up 60.1%. For the nine months it was $1,312.7 million against $820.7 million. Net written premium, which is the portion the company keeps after ceding risk to reinsurers, was $149 million, up 26% from $117.9 million. The difference between 60% and 26% growth reflects a fall in net retention to 30% from 38%. In plain terms, Hippo is writing much more premium but keeping a smaller share of it, with the rest passed to reinsurers or other partners. Smaller retention reduces earnings volatility, though it also reduces the profit kept from each dollar written, and it depends on reinsurers continuing to accept the business.

A shifting business mix

The line-of-business figures show how far the mix has moved. Casualty gross written premium was $188 million, up 146%, and 38% of the total. Commercial multi-peril was $108 million, up 63%, and 22%. Homeowners, the line the company was founded on, was 23% of gross written premium. On a net basis the change is clear as well: homeowners was 50% of net written premium, down from 64% a year earlier. Hippo is therefore becoming less of a homeowners insurer and more of a diversified writer, and its growth is coming from casualty, a long-tail line where claims can take years to develop. That can make early results look better than final outcomes, a point investors in any fast-growing casualty book should bear in mind, though the release itself does not discuss it.

Underwriting ratios

The combined ratio was 98.4% against 99.6%, an improvement of about one point. The net loss ratio rose to 56.7% from 47.6%, and the catastrophe loss ratio was 6.5% against a slightly negative 0.3% a year earlier. The expense ratio fell sharply, to 41.7% from 52.0%. The improvement in the combined ratio therefore came entirely from lower expenses, since the loss ratio moved the other way. For nine months, the combined ratio was 97.9% against 118.3%.

Balance sheet and cash

Book value per share was $17.62 compared with $16.97 at year-end 2025, and tangible book value per share was $15.59 against $14.76. Total Hippo stockholders' equity was $469 million, up from $436 million. Annualized adjusted return on equity was 17.1% against 19.4%. Cash and cash equivalents were $311.8 million, up from $218.3 million, and total investments were $499.1 million. Nine-month operating cash flow was $124.2 million against $6.0 million a year earlier.

Guidance raised

The company updated its 2026 guidance. Gross written premium is now expected at $1.7 billion to $1.75 billion, up from $1.65 billion to $1.7 billion. Net written premium is unchanged at $565 million to $580 million. Revenue is expected at $585 million to $590 million, up from $580 million to $585 million. The combined ratio guidance improves to 97% to 98% from 99% to 101%, the catastrophe loss ratio assumption falls to 8% from 10%, and adjusted net income is expected at $77 million to $80 million, up from $62 million to $70 million. Stock-based compensation plus depreciation and amortisation is unchanged at $42 million.

Management commentary

Chief executive Rick McCathron said Hippo had a strong quarter, delivering a 98% combined ratio, and that even as the market softens it has been able to grow while improving profitability. That claim fits the numbers, but the expense ratio, not the loss ratio, drove the improvement, and the loss ratio is the figure most exposed to changes in claims trends.

Caveats

This article is based on one company release that was partly unread, and it presents management's metrics. It is not investment advice. Readers who need the reconciliation of adjusted measures should consult Hippo's filings with the US Securities and Exchange Commission.