Fintech

Hippo’s plan to reinvent insurance: Fix homes before they break

Hippo, which is going public via a SPAC Tuesday, is using tech to prevent claims from happening.

Hippo CEO Assaf Wand

Hippo CEO Assaf Wand wants to catch homeowners' losses before they happen.

Photo: Hippo

Home insurance, a $108 billion legacy industry that depends on troves of data, is a natural area for fintech companies to target.

That change is starting to happen — and one company is getting fresh capital to tackle the opportunity. Hippo, led by co-founder and CEO Assaf Wand, is going public today through a merger with a special purpose acquisition company Reinvest Technology Partners Z. The SPAC is run by LinkedIn co-founder and venture capitalist Reid Hoffman and Zynga founder Mark Pincus.

Hippo, now available in 37 states, looks to differentiate itself in the competitive field by focusing on one sector — the home. That includes individuals as well as homeowners' associations.

There are already several other upstarts in this sector, including Lemonade, which offers homeowners, renters, pet and life insurance and went public in July 2020.

Insurers have used the web to sign up new customers and manage billing for decades. But Hippo is going far beyond just having a user-friendly app. It uses technology to monitor data such as weather or other things in the home that could cause damage. Hippo gives customers smart sensors to detect smoke or leaks and hopefully prevent damage. It also uses machine learning to optimize pricing and offer fast quotes online. This is also a strategy to stay in regular contact with customers and offer more value than just when a customer needs to file a claim.

The company, which was backed by Felicis Ventures, Horizons Ventures, Lennar, Fifth Wall Ventures and Bond Capital, had $405 million in written premiums in its 2020 fiscal year, according to its investor presentation.

Hippo also is offering its technology as a platform to other insurance startups, in what it calls an AWS strategy.

We caught up with Wand to talk about how insurance is changing.

This interview has been edited for clarity and brevity.

What are insurance incumbents doing that you'd like to take on?

The current incumbents spent the last 100 years building a flawed process of insurance. It's hard to purchase. When you look at what your purchase is for, it's usually obsolete. It's things like fur coats and beautiful china or silverware. And then, when you have a claim it's almost always a horrible experience, and in between this horrible claim experience and the purchase experience, you have zero touch points with the insurance company.

How are you different from all of that?

So we took all of that experience and said we'll make it very easy for people to purchase. The coverage is focused on modern things, so instead of the fur coats, it's more about your home office and enhanced electronics or your bicycle, things that you actually have. When you have the claim experience, we have one person who's dedicated to you and a claims team that's available 24/7 handling the claim.

Is your strategy to provide more services for customers when they don't have a claim?

The best claim experience comes from avoiding a claim from happening in the first place. So what we're trying to do is be a proactive insurance company. We're doing it by constantly monitoring the home with different data and basically telling you, "We just found this discoloration on the roof. I think we should send a roofer." This is way before the winter when you're going to have a $20,000 water loss.

How do you monitor that?

We're giving smart sensors to all of our customers to help avoid losses from escalating because it's way better to catch it at the beginning. And then we have a service called Hippo Home Care that helps our customers take care of the home from installing a shelf and replacing leaky faucets to doing renovation in the bathroom. The idea is: How do we build this relationship with our customers?

Last year you bought Spinnaker, a property and casualty insurer you've worked with since 2017. How does that change your model to offer insurance directly now?

Yes but we also have most of the risk being shifted to reinsurers anyway. In short, we own our own path forward. It gives us a lot more flexibility. It also serves as a platform for other insurance startups as well. We call it the AWS of insurtech. So if you have a startup in, say, Denton, in travel, you also need to find a carrier to actually write (insurance). So we enable people to focus on what they do best, which is use the data to underwrite, and then do the marketing, and we're going to do the insurance platform for them.

So you're providing to other companies what you didn't have before?

Yes, this exact structure for other companies, that back-end part of it.

So how much risk are you taking on?

The carrier ... is one thing; where the risk is sitting is another thing. So in this framework our aim is to have 10 to 25% of our risk that we capture, and the rest is done by reinsurers.

Are you a tech company or an insurer?

We view insurtech as a mix of insurance and technology. It's finding the best technology people and the best insurance people. If you're an insurance company that is trying to do stuff in tech, you can't get the talent that you want, and you cannot implement enough innovation and growth. On the flip side, if you're a technology company who's dabbling in insurance, you're going to make too many mistakes on losses, because there's a risk component.

My job is to basically balance these two things and have the strongest technology backing to innovate as fast as possible, and bring back the focus on the customer to bring the tools to the insurance people but then have the insurance people do the filing, the underwriting and all that kind of stuff. I need to give them the latest and greatest in underwriting tools in data, in aerial imagery, in machine learning, so they can do a better job at a faster pace.

So you're trying to bring new approaches to this industry but not changing the underlying business.

We're not disrupting insurance. I'm not taking people that have a first name starting with a T and say I'm going to give you a 15% discount — it doesn't work like that. It's about modernizing. There has been an explosion of data sources and new technology that came in in a field that hasn't changed in 100 years, and we're just embedding it all and refocusing back on a customer.

How is your technology different?

It's very different than other insurance companies. They're also not wired as a technical company. So I have a CTO and chief product officer. They have a CIO and it's all outsourced. And they're dependent on them or an army of Accenture consultants. It's just not the same kind of architecture.

How does this change the agency insurance model?

Don't forget that this is an industry that for a hundred years ... , there was one customer and that customer was an agent. We're thinking of Tomio as a customer. We're enabling Tomio to purchase however you want, not however the agent wants. The average age of an agent is 61; they're retiring like crazy. So it's about refocusing back on the customers. The customers should be agnostic on what technology. Why do you care if I have alien technology on the back end, or a bunch of papers on my desk? You care about having the best experience when you want, the best customer touch point and being covered for what you should be covered. It's my problem how to enhance it and innovate in a pace that is adhering to the customer needs.

So what's happening to that agent model of selling insurance?

This is a model that started in the 1950s and 60s, when there was the move to the U.S. suburbs. And you needed to cover [customers] and you couldn't cover them otherwise. And now, the world is moving to digital and direct.

Look at what happened in the 1990s. The biggest carriers in automobiles were Allstate and State Farm. Well now it's Progressive and GEICO that dominate. What they've done is they went direct: 15 minutes could save you 15%. You go to geico.com to purchase. Home insurance is going to go through the same evolution. Same with SMB and life insurance. So we are building the next Progressive.

What has changed with COVID-19?

COVID happened and digitization moved everything five years forward. The place of the home in our lives changed significantly because it's where you sit, is your office, but it's also your gym, it's the school, your kitchen, it's everything.

So is your model cheaper with no agents?

What we realize is you can't be mono-channel. We're omnichannel, so you can go to Hippo.com, and you can go via an agent of another company or independent agents, and you can go via our partners. You can buy a house on Compass, and it's going to be embedded via an API with the policy. You're always going to get the same price. It's my problem if the margin is going to be different. The world is moving to direct, but it always moves slower than people think. So it's also moving to independent. I'm agnostic. I'll serve a customer however they want.

Entertainment

Beat Saber, Bored Apes and more: What to do this weekend

Don't know what to do this weekend? We've got you covered.

Images: Ross Belot/Flickr; IGBD; BAYC

This week we’re listening to “Harvest Moon” on repeat; burning some calories playing Beat Saber; and learning all about the artist behind the goofy ape pics that everyone (including Gwyneth Paltrow?) is talking about.

Neil Young: Off Spotify? No problem.

Neil Young removed his music from Spotify this week, but countless recordings are still available on YouTube, including this 1971 video of him performing “Heart of Gold” in front of a live studio audience, complete with some charming impromptu banter. And while you’re there, scroll down and read a few of the top-rated comments. I promise you won’t be disappointed.

'Archive 81': Not based on a book, but on a podcast!

Netflix’s latest hit show is a supernatural mystery horror mini-series, and I have to admit that I was on the fence about it many times, in part because the plot just often didn’t add up. But then the main character, Dan the film buff and archivist, would put on his gloves, get in the zone, and meticulously restore a severely damaged, decades old video tape, and proceed to look for some meaning beyond the images. That ritual, and the sentiment that we produce, consume and collect media for something more than meets the eye, ultimately saved the show, despite some shortcomings.

'Secrets of Sulphur Springs': Season 2 is out now

If you’re looking for a mystery that's a little more family-friendly, give this show about a haunted hotel, time travel, and kids growing up in a world that their parents don’t fully understand a try. Season 2 dropped on Disney+ this month, and it not only includes a lot more time travel mysteries, but even uses the show’s time machine to tackle subjects as serious as reparations.

The artist behind those Bored Apes

Remember how NFTs are supposed to generate royalties with every resale, and thus support artists better than any of their existing revenue streams? Seneca, the artist who was instrumental in creating those iconic apes for the Bored Ape Yacht Club, wasn’t able to share details about her compensation in this Rolling Stone profile, but it sure sounds like she is not getting her fair share.

Beat Saber: Update incoming

Years later, Beat Saber remains my favorite VR game, which is why I was very excited to see a teaser video for cascading blocks, which could be arriving any day now. Time to bust out the Quest for some practice time this weekend!

Correction: Story has been updated to correct the spelling of Gwyneth Paltrow's name. This story was updated Jan. 28, 2022.


Janko Roettgers

Janko Roettgers (@jank0) is a senior reporter at Protocol, reporting on the shifting power dynamics between tech, media, and entertainment, including the impact of new technologies. Previously, Janko was Variety's first-ever technology writer in San Francisco, where he covered big tech and emerging technologies. He has reported for Gigaom, Frankfurter Rundschau, Berliner Zeitung, and ORF, among others. He has written three books on consumer cord-cutting and online music and co-edited an anthology on internet subcultures. He lives with his family in Oakland.

Sponsored Content

A CCO’s viewpoint on top enterprise priorities in 2022

The 2022 non-predictions guide to what your enterprise is working on starting this week

As Honeywell’s global chief commercial officer, I am privileged to have the vantage point of seeing the demands, challenges and dynamics that customers across the many sectors we cater to are experiencing and sharing.

This past year has brought upon all businesses and enterprises an unparalleled change and challenge. This was the case at Honeywell, for example, a company with a legacy in innovation and technology for over a century. When I joined the company just months before the pandemic hit we were already in the midst of an intense transformation under the leadership of CEO Darius Adamczyk. This transformation spanned our portfolio and business units. We were already actively working on products and solutions in advanced phases of rollouts that the world has shown a need and demand for pre-pandemic. Those included solutions in edge intelligence, remote operations, quantum computing, warehouse automation, building technologies, safety and health monitoring and of course ESG and climate tech which was based on our exceptional success over the previous decade.

Keep Reading Show less
Jeff Kimbell
Jeff Kimbell is Senior Vice President and Chief Commercial Officer at Honeywell. In this role, he has broad responsibilities to drive organic growth by enhancing global sales and marketing capabilities. Jeff has nearly three decades of leadership experience. Prior to joining Honeywell in 2019, Jeff served as a Partner in the Transformation Practice at McKinsey & Company, where he worked with companies facing operational and financial challenges and undergoing “good to great” transformations. Before that, he was an Operating Partner at Silver Lake Partners, a global leader in technology and held a similar position at Cerberus Capital LP. Jeff started his career as a Manufacturing Team Manager and Engineering Project Manager at Procter & Gamble before becoming a strategy consultant at Bain & Company and holding executive roles at Dell EMC and Transamerica Corporation. Jeff earned a B.S. in electrical engineering at Kansas State University and an M.B.A. at Dartmouth College.
Workplace

Mental health at work is still taboo. Here's how to make it easier.

Tech leaders, HR experts and organizational psychologists share tips for how to destigmatize mental health at work.

How to de-stigmatize mental health at work, according to experts.

Illustration: Christopher T. Fong/Protocol

When the pandemic started, HR software startup Phenom knew that its employees were going to need mental health support. So it started offering a meditation program, as well as a counselor available for therapy sessions.

To Chief People Officer Brad Goldoor’s surprise, utilization of these benefits was very low, starting at about a 10% take rate and eventually weaning off. His diagnosis: People still aren’t fully comfortable opening up about mental health, and they’re especially not comfortable engaging with their employer on the topic.

Keep Reading Show less
Michelle Ma

Michelle Ma (@himichellema) is a reporter at Protocol, where she writes about management, leadership and workplace issues in tech. Previously, she was a news editor of live journalism and special coverage for The Wall Street Journal. Prior to that, she worked as a staff writer at Wirecutter. She can be reached at mma@protocol.com.

Boost 2

Can Matt Mullenweg save the internet?

He's turning Automattic into a different kind of tech giant. But can he take on the trillion-dollar walled gardens and give the internet back to the people?

Matt Mullenweg, CEO of Automattic and founder of WordPress, poses for Protocol at his home in Houston, Texas.
Photo: Arturo Olmos for Protocol

In the early days of the pandemic, Matt Mullenweg didn't move to a compound in Hawaii, bug out to a bunker in New Zealand or head to Miami and start shilling for crypto. No, in the early days of the pandemic, Mullenweg bought an RV. He drove it all over the country, bouncing between Houston and San Francisco and Jackson Hole with plenty of stops in national parks. In between, he started doing some tinkering.

The tinkering is a part-time gig: Most of Mullenweg’s time is spent as CEO of Automattic, one of the web’s largest platforms. It’s best known as the company that runs WordPress.com, the hosted version of the blogging platform that powers about 43% of the websites on the internet. Since WordPress is open-source software, no company technically owns it, but Automattic provides tools and services and oversees most of the WordPress-powered internet. It’s also the owner of the booming ecommerce platform WooCommerce, Day One, the analytics tool Parse.ly and the podcast app Pocket Casts. Oh, and Tumblr. And Simplenote. And many others. That makes Mullenweg one of the most powerful CEOs in tech, and one of the most important voices in the debate over the future of the internet.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editorial director. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Fintech

Robinhood's regulatory troubles are just the tip of the iceberg

It’s easiest to blame Robinhood’s troubles on regulatory fallout, but its those troubles have obscured the larger issue: The company lacks an enduring competitive edge.

A crypto comeback might go a long way to help Robinhood’s revenue

Image: Olena Panasovska / Alex Muravev / Protocol

It’s been a full year since Robinhood weathered the memestock storm, and the company is now in much worse shape than many of us would have guessed back in January 2021. After announcing its Q4 earnings last night, Robinhood’s stock plunged into the single digits — just below $10 — down from a recent high of $70 in August 2021. That means Robinhood’s valuation dropped more than 84% in less than six months.

Investor confidence won’t be bolstered much by yesterday’s earnings results. Total net revenues dropped to $363 million from $365 million in the preceding quarter. In the quarter before that, Robinhood reported a much better $565 million in net revenue. Net losses were bad but not quite as bad as before: Robinhood reported a $423 million net loss in Q4, an improvement from the $1.3 billion net loss in Q3 2021. One of the most shocking data points: Average revenue per user dropped to $64, down from a recent high of $137 in Q1 2021. At the same time, Robinhood actually reported a decrease in monthly active users, from 18.9 million in Q3 2021 to 17.3 million in Q4 2021.

Keep Reading Show less
Hirsh Chitkara

Hirsh Chitkara ( @HirshChitkara) is a is a reporter at Protocol focused on the intersection of politics, technology and society. Before joining Protocol, he helped write a daily newsletter at Insider that covered all things Big Tech. He's based in New York and can be reached at hchitkara@protocol.com.

Workplace

Asana’s productivity expert wants you to ditch the 30-minute meeting

Professional organizer Joshua Zerkel says, sometimes you just need to stop working.

Joshua Zerkel is one of the first Certified Professional Organizers through the National Association of Productivity and Organizing Professionals.

Photo: Asana

When he entered the workforce, Joshua Zerkel didn’t know that productivity consultants were a thing. He was always the organized kid, alphabetizing his comic books and grouping his toys by category (G.I. Joes could never mix with Transformers). But his connection to productivity really clicked when he started working in web design. He quickly became the go-to employee for tips on staying focused.

“There are a lot of great talents that designers have, but one of them is typically not project organization and time management,” Zerkel joked.

Keep Reading Show less
Lizzy Lawrence

Lizzy Lawrence ( @LizzyLaw_) is a reporter at Protocol, covering tools and productivity in the workplace. She's a recent graduate of the University of Michigan, where she studied sociology and international studies. She served as editor in chief of The Michigan Daily, her school's independent newspaper. She's based in D.C., and can be reached at llawrence@protocol.com.

Latest Stories
Bulletins