Fifth Wall Investment and Strategic Partnership with Hippo
Investment Alongside Comcast Ventures Supports Aggressive Partnership Development and Expansion for Tech-Enabled Home Insurance Broker
The home insurance industry has long been due for a shake-up, and with the confluence of digital technology and increasingly connected and modernized homes, Hippo is reimagining the way homeowners find, secure, and interact with their home insurance company. Fifth Wall is pleased to announce a strategic investment in Hippo alongside Comcast Ventures, a tech-enabled digital home insurance provider delivering up to 25% savings on premiums through both new technology, and the removal of commissioned agents. Hippo is revolutionizing home insurance for the 21st century.
Post-launch, Hippo saw double-digit month-over-month growth in its customer base across the two largest insurance markets in the United States, California and Texas, along with a successful launch in Arizona. Having found such significant success in these important states, Hippo plans aggressive expansion in 2018, including into markets such as Illinois , Pennsylvania, and Ohio. Among Hippo’s most compelling innovations is its digitally-enabled model of delivering home insurance quotes to homeowners in less than 60 seconds (compared to industry average of 15 minutes), as well as its ability to bind customer policies within three minutes. This company’s streamlined approach and superior customer service results in high Net Promoter Scores and has led to increased customer loyalty and word-of-mouth marketing.
Hippo is a modern brand for the smart consumer,offering premiums up to 25% less than the competition. As part of its investment in smart home technology, Hippo provides a water leak sensor with every policy, giving homeowners the ability to detect leaks early and avoid expensive claims that would impact not only the homeowner, but the company’s bottom line. It’s small but meaningful tech innovations like these that have made Hippo unique in the marketplace, as well as its claims advocate concierge team that provides amazing customer care throughout all claims and support. Furthermore, partners with nearly 200 years of experience and $200 billion in assets underwrite all of Hippo’s policies. Strategically, this means Hippo doesn’t incur the risk from underwriting, however, shares in the upside when underwriting creates a profit. For homeowners, knowing their insurance company will not go under in the event of a natural disaster, such as flood or wildfire, offers significant peace of mind. Additionally, Hippo’s policy management system is built in-house, which is a major technological differentiator and strategic advantage.
Hippo relies on three primary sales channels: partnerships, insurance agents, and direct to consumer. Fifth Wall’s strategic network of some of the largest real estate developers in the country — including Lennar (44 thousand homes per year), Trammel Crow (5 thousand apartments per year), LNC (6 thousand apartments per year), and Hines (2 thousand apartments per year) — is an unrivaled go-to-market vehicle to accelerate customer growth. While partnerships and insurance agents are being used heavily in the early stages to grow Hippo’s customer base, Fifth Wall is deeply bullish on Hippo’s unique direct-to-consumer online sales strategy as a long term customer acquisition channel.
Led by CEO Assaf Wand and CTO Eyal Navon, Hippo’s full team has unparalleled experience across key industries. Its collective expertise is drawn from years of experience at leading companies, including Esurance, SoFi, LinkedIn, E-Loan, Deloitte, and GEICO. Hippo’s head of insurance, Richard McCathron, and head of compliance & legal, Angela Grant, each have more than 25 years experience in insurance.
It is no secret home insurance is one of the largest addressable markets in the world. With over 125 million households and 81 million homeowners in the United States, home insurance currently generates over $70 billion in premiums per year based on conservative estimates. Hippo’s total addressable market is over $19 billion.
The Future is Digital Home Insurance
Homeowners insurance is an extremely inefficient and antiquated industry in both cost structure and product delivery. Despite research revealing that most insurance falls well short of homeowner expectations, progress and modernization in the industry has been slow to nonexistent. Receiving a quote is cumbersome and the claims process is unnecessarily painful for customers. Like other industries (such as real estate sales), insurance is shifting toward tech-enabled models offering significant cost savings to increasingly informed consumers. The timing for Hippo’s tech-enabled insurance brokers is spot-on — today’s savvy homeowners are looking for a consumer-friendly option teamed with superior service.
Fifth Wall identified clear benefits for two key segments of the market:
Homeowners: Hippo found that more than 60% of homeowners are underinsured and view insurance as a large expense with few visible benefits beyond acting as a safety net. Hippo delivers a modern insurance experience with clear cost savings compared to alternatives.
Real estate developers: A home buyer cannot purchase a new home without mortgage approval, which requires proof of home insurance. Lack of mortgage approval is the most common delay to a real estate transaction closing quickly, slowing down a developers’ speed to sale. Hippo’s home insurance significantly expedites the process for mortgage approval and ultimately the purchase of the home.
Our investment in Hippo is the latest in Fifth Wall’s continued effort to disrupt the status quo across the entire lifecycle of home ownership. In addition to benefiting immensely from being plugged into Fifth Wall’s extensive real estate development partnership footprint across both single family and apartment developments, Hippo’s platform is significantly cheaper and streamlined compared to its traditional competitors. Hippo has everything in place to capitalize on the consumer shift to digital home insurance: superior technology, a highly qualified team, and distribution partnerships out of reach for competitors.
Learn more about Hippo and the strategic partnership on Fifth Wall’s podcast, where Brendan Wallace interiews Hippo Co-Founder and CEO Assaf Wand:
https://itunes.apple.com/us/podcast/assaf-wand-hippo/id1255221263?i=1000400443847&mt=2
Sources:
https://www.statista.com/topics/1618/residential-housing-in-the-us/
