Hippo Holdings Inc. has achieved its fifth consecutive quarter of profitability, demonstrating robust financial health. The company reported a substantial increase in gross written premium to $482 million, a 61% surge from the previous year. This impressive growth is largely attributed to the expansion of existing program partners in the casualty and commercial multi-peril sectors, alongside a renewed growth in the homeowners' segment. Net income for the quarter reached $10 million, or $0.38 per diluted share, an eightfold increase compared to the same period last year. Adjusted net income also saw a significant rise, hitting $21 million, or $0.79 per diluted share, representing a 24% year-over-year improvement. The net combined ratio improved by four percentage points to 95.8%, driven by a reduction in the net expense ratio and disciplined underwriting. This strategic focus on profitable growth and diversification positions Hippo favorably in a competitive market.
The company's strategic initiatives and operational efficiency have been key drivers of its recent success. Hippo has expanded its program count to over 50 active programs, doubling the number from the first quarter of the prior year, with most growth originating from existing partners. The implementation of AI technologies, such as Hannah for service and Clara for first notice of loss, has allowed for top-line growth without a proportional increase in overhead, contributing to a reduced net expense ratio of 45.4%. Furthermore, the integration of Devon, an AI software engineer, across its technology organization has enhanced development efficiency. Significant changes to the reinsurance structure, including a shift to corporate group-level catastrophe coverage and the introduction of a whole account quota share, have reduced probable maximum losses by over 30%, further stabilizing the company's financial risk profile.
Looking ahead, Hippo has accelerated its long-term financial targets, signaling strong confidence in its future trajectory. The company's previous 2028 gross written premium goal of over $2 billion has been brought forward to 2027, with a new target of more than $2.5 billion for 2028, representing a 32% compounded annual growth rate. Adjusted net income targets for 2028 have also been raised to over $140 million, effectively doubling the 2026 guidance. This ambitious outlook is supported by continued investment in its tech-native platform, expanding partnerships like the one with Accelerant expected to generate over $500 million in premium by 2027, and broadening its footprint with Progressive in multiple states. The company remains committed to disciplined underwriting and a diversified portfolio to navigate market dynamics and achieve sustained profitability.
Hippo's remarkable journey reflects a commitment to innovation, strategic adaptation, and financial prudence. By consistently leveraging advanced technology and fostering strong partnerships, the company not only achieves impressive financial results but also creates a resilient business model poised for long-term success. This forward-thinking approach, coupled with an unwavering focus on profitable growth, ensures that Hippo remains a leading force in the insurance industry, inspiring confidence and demonstrating the power of visionary leadership.