The Future of Insurance Podcast - Rick McCathron, President, Hippo

The Future of Insurance Podcast – Rick McCathron

President, Hippo

Season 2, Episode 22, March 29, 2022

Guest Bio

Rick McCathron CPCU CIC brings more than 25 years of P&C experience to his role as President of Hippo (NYSE: HIPO). Rick joined the company in 2017 to establish Hippo’s insurance operations team and bring Hippo’s smart, simple and proactive home insurance products to scale. In just over six years, Hippo has become a national leader in the U.S. homeowners market, reaching more than 80% of the total U.S. homeowners population. Hippo’s integrated platform, which includes a growing suite of proactive services designed to prevent loss, is a modern approach to home insurance that brings customers greater peace of mind.

Prior to Hippo, Rick held senior executive positions at well-respected insurance companies including First Connect Insurance as its President & CEO, Superior Access Insurance as its President & CEO and Mercury Insurance Group (NYSE-MCY) as its Regional Vice President. Rick is both a Chartered Property & Casualty Underwriter and a Certified Insurance Counselor and sits on the Board of Directors of Hippo Holding Company, Spinnaker Insurance Company, First Connect Insurance, Jumpstarter Ventures and The National Alliance of Insurance Education & Research. He is also an advisor for several other InsurTechs.

Highlights from the Show

Rick has been in insurance for almost 30 years, across different traditional players, but grew up in an agent family
Having spent time in traditional players, he often found himself stymied by the amount of time it took to make decisions and deploy them, which really appealed to him about Hippo
Hippo doesn’t look at being a Homeowners insurer, but rather a protection platform for people’s home
- This involved preventative maintenance, IoT and other services to stop losses rather than just resolve them better/faster/cheaper
- Their IoT adoption rate is over 70%, which is something they’ve worked hard to achieve
- But they also recognize not every customer want to use the devices, or all of them
Hippo also partners with home builders and others in the home ownership space (mortgage lenders, realtors, etc)
Hippo built their own tech stack, which has been critical
- This hasn’t worked well for many insurers in the past, but Rick sees the quality of developers and the support and structure they have as a reason Hippo has succeeded here
- Speed of deployment and the ability to really put the customer first is what allows for genuine differentiation
Hippo partners with many other players, based on whether they can do something better than anyone else or not; if they can’t, they will partner with someone best-in-class
- This applies to distribution, too, where Hippo has worked with agents since day one because customers want it, and we can’t tell customers how to work with us and expect to succeed
- As they continue to grow and develop their offering, the common theme is that it’s tied to the protection of people’s homes, which can extend to the communities they live in (like as they’ve built a condo product)
Embedding is a significant part of the future, as people don’t buy home insurance, they buy homes that need insurance
Homeowners insurance is a little different from Auto because it’s not just about pricing, but also concentration, if you’re growing a lot, you need to ask if that’s for a good reason or a sign that something is off in what you’re doing and are you getting over-exposed as a result
As a high-growth, SPAC-listed, InsurTech, Hippo got hit with the recent valuation issues in the market
They’ve made a conscious choice not to manage to the stock market, but to the long term best interest of the customers