Homeowners Insurance Market Opportunity
Summary of Risks (2/3)
Risks Relating to Our Business
1. We have a history of net losses and we may not achieve or maintain profitability in the future.
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Our success and ability to grow our business depend on retaining and expanding our customer base. If we fail to add new
customers or retain current customers, our business, revenue, operating results and financial condition could be harmed.
The "Hippo" brand may not become as widely known as incumbents' brands or the brand may become tarnished.
Denial of claims or our failure to accurately and timely pay claims could materially and adversely affect our business, financial
condition, results of operations and prospects.
Our limited operating history makes it difficult to evaluate our current business performance, implementation of our business
model and our future prospects.
We may not be able to manage our growth effectively.
Intense competition in the segments of the insurance industry in which we operate could negatively affect our ability to attain or
increase profitability.
Reinsurance may be unavailable at current coverage, limits or pricing, which may limit our ability to write new or renew existing
business. Furthermore, reinsurance subjects our insurance company subsidiaries to counterparty credit and performance risk
and may not be adequate to protect us against losses, which could have a material effect on our results of operations and
financial condition.
Failure to maintain our risk-based capital at the required levels could adversely affect the ability of our insurance subsidiaries to
maintain regulatory authority to conduct our business.
10. Failure to maintain our financial ratings could adversely affect the ability of our insurance company subsidiaries to conduct our
business as currently conducted.
11. If we are unable to expand our product offerings, our prospects for future growth may be adversely affected.
12. Our proprietary technology, which relies on third party data, may not operate properly or as we expect it to.
13. Our technology platform may not operate properly or as we expect it to operate.
14. Our future success depends on our ability to continue to develop and implement our technology, and to maintain the
confidentiality of this technology.
15. New legislation or legal requirements may affect how we communicate with our customers, which could have a material adverse
effect on our business model, financial condition, and results of operations.
16. We rely on external data and our digital platform to collect and evaluate information that we utilize in producing, pricing and
underwriting our insurance policies (in accordance with the rates, rules, and forms filed with our regulators, where required),
managing claims and customer support, and improving business processes. Any legal or regulatory requirements that might
restrict our ability to collect or utilize this data or our digital platform, or an outage by a data vendor could thus materially and
adversely affect our business, financial condition, results of operations and prospects.
17. We depend on search engines, content based online advertising, other online sources to attract consumers to our website,
which may be affected by third party interference beyond our control. In addition, our producer and partner distribution channels
are significant sources of new customers and could be impacted by third party interference or other factors. As we grow our
customer acquisition costs may increase.
18. We may require additional capital to grow our business, which may not be available on terms acceptable to us or at all.
19. Interruptions or delays in the services provided by our providers of third-party technology platforms or our internet service
providers could impair the operability of our website and may cause our business to suffer.
20. Security incidents or real or perceived errors, failures or bugs in our systems or website could impair our operations, result in
loss of personal customer information, damage our reputation and brand, and harm our business and operating results.
21. Misconduct or fraudulent acts by employees, agents or third parties may expose us to financial loss, disruption of business,
regulatory assessments and reputational harm.
22. Our success depends, in part, on our ability to establish and maintain relationships with quality and trustworthy service
professionals.
23. We may be unable to prevent, monitor or detect fraudulent activity, including policy acquisitions or payments of claims that are
fraudulent in nature.
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We are periodically subject to examinations by our primary state insurance regulators, which could result in adverse
examination findings and necessitate remedial actions.
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We collect, process, store, share, disclose and use customer information and other data, and our actual or perceived failure to
protect such information and data, respect customers' privacy or comply with data privacy and security laws and regulations
could damage our reputation and brand and harm our business and operating results.
26. We employ third-party licensed software for use in our business, and the inability to maintain these licenses, errors in the
software we license or the terms of open source licenses could result in increased costs or reduced service levels, which would
adversely affect our business.
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We may be unable to prevent or address the misappropriation of our data.
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We rely on the experience and expertise of our founder, senior management team, highly-specialized insurance experts, key
technical employees and other highly skilled personnel.
29. If our customers were to claim that the policies they purchased failed to provide adequate or appropriate coverage, we could
face claims that could harm our business, results of operations and financial condition.
30. We may become subject to claims under Israeli law for remuneration or royalties for assigned service invention rights by our
Israel-based contractors or employees, which could result in litigation and adversely affect our business.
Our company culture has contributed to our success and if we cannot maintain this culture as we grow, our business could be
harmed.
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If we are unable to underwrite risks accurately and charge competitive yet profitable rates to our customers, our business,
results of operations and financial condition will be adversely affected.
33. Our exposure to loss activity and regulation may be greater in states where we currently have most of our customers or where
we are domiciled.
34. Our product development cycles are complex and subject to regulatory approval, and we may incur significant expenses before
we generate revenues, if any, from new products.
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New lines of business or new products and services may subject us to additional risks.
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Litigation and legal proceedings filed by or against us and our subsidiaries could have a material adverse effect on our business,
results of operations and financial condition.
37. Failure to protect or enforce our intellectual property rights could harm our business, results of operations and financial
condition.
Proprietary and Confidential | 49View entire presentation