This week´s guest on The Voice of Insurance is Richard McCathron, President of Hippo Insurance, the US property insurance company based in California. In this episode, Richard speaks about Hippo´s vision for the future, customer-centricity, the best path towards underwriting profitability, and technology's impact on customer service and home insurance.
Kicking off the discussion, Mark asks about Hippo’s mission and how the company is setting out to achieve it; Richard responds that at its core, Hippo´s purpose is about “returning the joy of home ownership to customers,” commenting further he adds, “Insurtech is made of two words, insurance and technology, and to be successful you have to have equal energy and pedigree in both to avoid recognising the pitfalls of the regulated insurance market yet the customer expectations for a customer-centric company.” Richard explains how the company has spent the last five years refining the message and “of returning the joy of home ownership,” while having fun doing it.
As for 2022, Mark asks Richard what he´s excited about for this year; Richard replies, “Our real focus currently is really two-fold - continuing to find homeowners that really appreciate the collaboration and partnership that we have with them that will produce a positive underwriting result and allow them to rest easy knowing if something goes wrong with their home Hippo is there to help them because our view this is about holistic home protection, this isn´t just about homeowners insurance, what we can do from a proactive or preventative perspective, what we can do with IoT risk mitigation devices is really important to do what we think is the best claims experience, which frankly, is avoiding the claim entirely.”
As for entering other lines of business, Richard discusses how Hippo exists to protect the joy of home ownership, so anything in that space that helps customers protect their home will be its focus; expanding on this, Richard says, “But different things that help customers protect their home, that is where you´re going to see expansions from Hippo, and you´ll likely see some expansions during 2022, but again only in that vertical in home ownership.”
Speaking about the different partnerships Hippo has and its omnichannel approach, Richard discusses how the profitability component is crucial and that Hippo doesn´t want to add customers for the sake of it. “It´s the profitably component that I think is very important. We don´t want to add customers just to add customers; we want to add customers that we think are the right type of customers who resonate with our mission of joy of home ownership; and we will grow with those types of customers while we continue to improve our underwriting results.”
As for challenges in the home insurance market, Richard points out that climate change is a key issue, “It is not the type of thing you can predict or understand in advance, and I think that´s the challenge the industry has; is traditionally we have all been very reactive, I think it´s time that we start getting proactive even on things like weather and weather prediction and climatology.”
As for his future vision for Hippo, Richard states, “The vision is a 1800 Hippo for anything in your home. Now that vision comes with nuance; sometimes there are things that we do in manufacture, other times in partnerships that we have, but that´s exactly right. If we can help identify something before it becomes an issue, we want to be there and help the customer take care of that.”
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