Insurtech Hippo Lays Off 20% of Workers

Insurtech Hippo Holdings mentioned it has “initiated an organizational realignment” by shedding about 120 staff, or 20% of its workforce.

The corporate mentioned in a submitting with the U.S. Securities and Trade Fee on Oct. 26 that it expects to document fees of about $2.2 million to $2.7 million for severance, advantages, and associated prices on account of the layoffs.

Hippo mentioned a lot of the layoffs will take impact Nov. 1 – a day previous to its scheduled launch of monetary outcomes for the third quarter. For the second quarter, the Palo Alto, California-based residence insurer reported a internet lack of $105.2 million in comparison with a lack of $72 million throughout the identical time a 12 months in the past. As of June 30, Hippo recorded a internet lack of $173.4 million.

Final 12 months inside the third quarter Hippo laid off about 10% of its staff, or about 70 staff.

Early final month, Hippo CEO Rick McCathron mentioned a nationwide pause in writing new enterprise on Hippo paper, which was put in place the prior month, would slowly be lifted. Talking at a Keefe, Bruyette & Woods Insurance coverage convention, McCathron mentioned the insurer would “begin turning the spigot again on in a really selective approach in areas during which we predict that we’re priced adequately.”

But in addition final month a shareholder group despatched a letter to members of Hippo’s board, calling for a strategic review. The shareholder group, one of many firm’s largest, mentioned Hippo has reported “abysmal monetary outcomes and operated in an unsustainable method” since turning into public in 2021.

The information out of Hippo is the newest amongst insurers asserting layoffs. Liberty Mutual introduced final week it was laying off 850 employees. Earlier this month, GEICO announced it was shedding 2,000 associates. American Household Insurance coverage has additionally not too long ago confirmed staff reductions, following information in August from Farmers Insurance coverage that it might let go 11% of its workforce.

Within the insurtech house, Department Insurance coverage, Corvus Insurance coverage and Pie Insurance coverage introduced layoffs earlier this 12 months. Final 12 months, Thimble, NEXT, Lemonade, and Root have been amongst different insurtechs trimming their workforces.

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