U.S. home insurers raked in $95 billion in revenue last year, and according to a recent Jupiter report, insurance tech companies are forecast to capture $400 billion in premiums by 2023. Hippo, a Mountain View insurance startup founded in 2015, is a beneficiary of the booming market — the company’s insurance policy sales have grown by 30 percent month-over-month since January 2018, and it claims to have doubled its online conversion rate.
With numbers that rosy, it’s not surprising investors want a slice of the pie. Hippo today announced that it has raised $70 million in a Series C round led by Felicis Ventures, with participation from homebuilder Lennar Corporation.
CEO and cofounder Assaf Wand, a former McKinsey consultant and founder of housewares company Sabi, said Hippo would use the influx of cash to improve its claims flow and expand its national footprint.
“Our heavy focus on customer experience for every client, from first time homeowners to home insurance experts, has been one of the main keys to our success,” he said. “We’re eager to expand our footprint, launch new products, and bring our incredible customer service to customers nationwide.”
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Hippo, like most companies in the insurance tech field, doesn’t underwrite policies itself — it relies on existing insurance giants and takes a commission on granted plans. But Wand says its data approach differentiates it from competitors like Lemonade and MetroMile.
Hippo taps sources like municipal building records, satellite imagery, and smart home sensors to simplify signups and policy management. When a prospective customer enters their address, for instance, they get a prefilled form with detailed information about their home’s construction — all scraped from public records.
As a result, most homeowners and condo owners find a plan in 60 seconds or less, Wand said, and pay up to 25 percent less in premiums.
Data analytics is something of a trend in the insurance market. The Global Trends Study 2017 revealed that insurance invests an average of $124 million per company in artificial intelligence (AI), or $54 million more than the average across all industries surveyed.
But according to Victoria Treyger, managing director at Felicis Ventures, Hippo has managed to apply AI more successfully than others.
“Hippo has set the bar for the future of insurance with its fully automated, proprietary policy management and proactive underwriting,” Treyger said. “The company leverages thousands of data points to underwrite customers in minutes and proactively monitors and alerts homeowners when key repairs or weather protection is needed to protect their most important asset. Insurance is the next big sector to undergo the dramatic transformation of customer experience and improved risk management enabled by access to real-time data. We see Hippo’s current growth rate and efficient automated policy management system as just the beginning of driving this transformation.”
Wand credits much of Hippo’s momentum with its expeditious state-by-state strategy — its backend platform enables it to launch in a new state in as little as two weeks — as well as its brand partnerships. This year, the startup teamed up with Comcast to extend Xfinity cable subscribers discounts and enhanced coverage on homeowners insurance, along with a smart home starter kit. And it collaborated with smart home monitoring startup Notion to provide new policyholders a Notion starter kit.
Some of those partnerships are on the data analyitcs side. Hippo in September announced an integration with Zesty.ai, an artificial intelligence (AI) risk platform for property and casualty insurance, that taps the latter’s computer vision technology to expedite underwriting.
“From a client’s first interaction with us to our regular coverage tracking, we always keep our client’s coverage needs in mind,” Wand said.
Since the beginning of this year, Hippo has launched in 11 new states. It’s currently in 14, with plans to cover 60 percent of the U.S. population by the end of 2018. It now covers more than $25 billion in total property value and has raised $109 million to date from a bevy of investors, including Abstract Ventures, Aquiline, Comcast Ventures, Fifth Wall, GGV Capital, Horizons Ventures, Munich Re, Pipeline Ventures, RPM ventures, and Zeev Ventures.
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