This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk_0: good afternoon thank you for opening today's hippo fourth quarter twenty two earnings call my name is hannah and i will be a moderator for today's call online will be needed during the presentation portion of the call with an opportunity for questions than answers at the end if you would like to ask a question please press start one on your telephone coupon i would now it's about the conference over to our host cliff go on investor relations please go ahead
spk_1: but you operator good afternoon everybody and beg you joining the double what or earning can call earlier if it did a girl the letter and obvious we go we did available that investors that he blood alcohol meeting today discussions will be able to executive officer of lebanon wreck macarthur and she financial up the still falling med prepared remarks the open up the called the question before we begin i'd like to remind you that are discussing the could mean prediction application or the bateman and other information about of that are based on man current a patient as the data that presentation more than they would include but are not limited to a expectations were predictions of financial business women and conditions in competitive and industry outlook for the is david to public service certainly than other factors that could clutter afterwards up to differ materially from the top a result andrea from our forecasts including mode that for the tip of a cape up today more information please refer to the risk of certainly than other factors disgusting people that the filing in particular any section been felled risk factors are cautionary tale book about the any for the containment we make whenever they appear you should carefully consider the risk and uncertainty that other factors disgusting give that the filing gottlieb undue reliance on looking statements as simple and under no obligation expect me disclaims any responsibility for updating altering or otherwise providing any for the statement weather as we got news for making future events or otherwise except as required by law during his the and call you'll often refer to not get on a few measures like as total generate a premium and adjusted ebitda are daffy duck the description of are non gap when it better with a for reconciliation the gap can be found in of what quarter two thousand to show the letter which has been furniture the a see and available on our website and with that alternate all over to britain catherine a president via
spk_2: good afternoon everyone and bullets founded in two thousand and fifteen with a goldfish two fundamentally improve the homeowner's insurance experience are partnering with customers helping them better maintain and protect their homes it takes a long time to build a profitable insurance company building a recognize consumer brain developing bad and class underwriting and bring in enough customers together while bringing him out the volatility have a policy portfolio none of that happens overnight the ten largest homeowners insurance carrier in the us on average are over one hundred years old and they family have the advantage of time on their side we believe the incumbent players have become complacent rapid technological change and the explosion of data and analytics capabilities over the past decade have not only made it possible for a company like a book to exist
spk_1: but also to build a superior customer experience and a national footprint far faster than any legacy carrier could have imagined
spk_2: consumers have come to expect high standards of service and hippo as well positioned to deliver the hippos foundation firmly in place twenty twenty two was a year of rapid progress advancing other aspects of our company except in this endeavor comes down to two simple face first make experience of the any will customer the best around so our customers will partner with us over the long term
spk_1: when unfortunate things happy with a modern protection is the best protection innovation and loss prevention and claims handling can put hippo at the forefront of customer care beckett make the rest of our company a strong foundation by using our technology to rapidly improve our ability to deliver on the fundamentals of insurance we are now marching towards profitability ahead of schedule and creating the financial future that is built to last are some of the highlights of what we develop our customers and partners as we look back on the last twelve months we launched our book approach pilot in texas which enables hippo customers use be hippo out and order home repair services to a curated network providers we're ramping up crocodile in a non local products obama not as a third party agency allowing our customers to satisfy all of their insurance needs whatever we've added new builders to our builder network
spk_2: and we recently launched it was builders insurance agency for small regional guilders make you hippos new policy and experience available to a much larger group of perspective homeowners
spk_1: we've also met and exceeded our cheap targets for the year including sixty two percentage points of gross loss ratio improvement in twenty twenty two vs full year of twenty twenty one improved are targeted marketing over seventy five percent of new customers fall within our generation better target market
spk_2: added geographic diversification
spk_1: we're now and forty states hovering over ninety percent of the population we've improved our claims experience to the use of aerial imagery to rapidly as as damage after catastrophes we had gdp growth of thirty three percent than twenty twenty two over twenty twenty one we've successfully place or twenty twenty three reinsurance program with improved terms and conditions and finally we're getting ahead of costs as you for saw a flat in of fixed operating expenses we have a lot going on in hippo but as we look out for twenty twenty three very few key areas of focus for a company first we want to make sure that all of our customers have a superior about experience whether they buy a home insurance policy
spk_2: a one of our third party offerings do our agency
spk_1: beckett or hippo home insurance net loss ratio which has already shown much progress will show much more as the actions that we've already taken work their way into the results third we are investing and in hippo homecare business which we believe will become a key differentiator of our customer experience and the years to come
spk_2: if i begin my first full calendar year as ceo i could not be more excited about our vision and the execution we achieved and twenty twenty two turning that vision into reality
spk_1: the most exciting part is that for both our customers and our shareholders the best is yet to come thank you for your support and for joining us on this journey
spk_3: i will now turn it over to stewart to sure a few more details on our financial performance
spk_1: thank you rick in the fourth quarter pepper took another step forward along our path to profitability with an adjusted ebitda lot that forty seven point three million improving upon our key three twenty twenty three result are graduates your name's ron and were beginning to keep deposited operating leverage that will drive our long term profitable growth pgp graphic bell rated a keyboard rising to an increase to forty four percent over the prior year quarter the two hundred and thirty four million bringing our full year twenty twenty two to gp to a hundred and eleven million in line with our original twenty twenty give guidance demand for our products and services remain strong the customer retention has continued to improve with blended premium retention across both hippo policy and agency customers coming in at ninety two percent in the quarter up from ninety percent in three and eighty nine percent and cute you we talk growth throughout our forty eight and we began to build a president in the northeast and that it lanning we recently been more cautious about growth in are directly largest market but in the quarter with are higher growth infected with our footprint and update become more balanced in services business line where economics are predominantly eat and commission income gdp with driven by strong pit bull year and hotel and are driving builders did like just didn't really typical for que por we recently announced the launch of hippo builder insurance agency the time for smaller regional homebuilders for taking the embedded product of our bath it's growing most profitable distribution channel and expanding it to include mall builders nationwide our technology allow that to begin quoting a new partners with in that little it two week without the builder needing to and that significant resources with builders outside of the top ten responsible for over half of home built in the us we see at the material long term opportunity another part of our services business to keep an eye on his first connect insurance services are rapidly growing digital platform devices at work independent agents by providing access to the nation's top carriers across numerous mind the business this agent centric platform provide that the over sixty carriers and a variety of products that include home auto cyber small business like specialty line and more recently launched carriers door help agents discover additional carriers and product that can be bundled to increase sale for berkshire hathaway by work with added to the carriers doors roster of insurance providers when good program business added eighty four million of non hippo pgp in the fourth quarter up from thirty eight million in the prior year quarter at vinegar we provide other managing general agent access to our balance sheet them insurance like the gym and exchange for fronting feet and off in a small percentage of the underwriting years bob on the premium that they produce and twenty twenty two we brought several new program online betting getting lower volume for programs that we put into brought up earlier in the year which with that are keeping in the hippo home insurance program where our economics are driven by underwriting performance e p growth with in the mid game over the course of twenty twenty two with executed significant re underwriting action including new pricing later he claimed handling improvement and what continue to be a challenging economic environment with fire and more volatile inflation rate we continued to be proactive about rape right thing and reiterating action which are expected to drive significant growth and net loss ratio improvement over the course of twenty twenty three a revenue in the quarter with thirty five point eight million up eleven percent over the prior quarter bringing full result one hundred nineteen point seven million in line with their guidance looking ahead with back very strong twenty twenty three revenue growth about forty percent and their new reinsurance treaty will lead to retention of higher net premium earned our cue for growth loss ratio forty two percent with the depth and our company's history than going public favorable over there really is from prior act that years benefited the growth watch ratio by ten points where awful reporting to point the benefit and pdf defined cat lofted than the quarter because keyboard cat lot and thirteen four which were largely due to winter storm elliot were more than off that by current year favorable development from our natural law hit send you three hurricane in which happened in the final days you dream
spk_3: for the full year our growth loss ratio improved and sixty two percentage points your year to seventy six percent from one hundred and thirty eight percent and twenty twenty one and we expect ongoing underlying improvement in twenty twenty three
spk_1: we've taken many action to gripe better lotteries razor ruddock including rape right thing we underwriting more focused marketing on our target generation better customers growth of our builder channel np geographic down and improving our claim property as we continue to grow our tdp and revenues were also beginning to achieve positive operating leopards and their bank line item latin or decline year over year we're expecting that improvement to tolerate over the next eighteen to twenty four months i felt the marketing costs were twenty eight point one million in the quarter up from twenty five point five million in the prior year but outside of increase stock based compensation or marketing spent had declined looking ahead and martin will be more focused on are targeted demographic desire geography while author reaping the benefits of are embedded partnership and the word of mouth reward strong customer service our technology development costs were eleven point five million down from fourteen point eight million reflecting the right thing doesn't relate and cute dream we're committed to focus investment in our technology platform with you as a key differentiator and they continue to under graphically in our development team in warsaw poland rg an egg that those with seventeen point eight million down from ninety million in the prayer quarter to begin to see the bottom line impact of are a great emphasis on cops control unrestricted cashman an that december thirty first twenty twenty two were six hundred forty nine while we remain highly conservative narathiwat allocation were beginning to see the benefit of our shift in short duration highly rated security and up income contributed five million in the quarter up from less than one million in the prior quarter and two point five million in two three of twenty twenty two a year and vinegar policyholders surplus was one hundred sixty bad nine up from one hundred and thirty two million at the end of two three driven largely by at thirty million dollar contribution from hippo holding to deport future grab net loss attributable the hippo during the quarter with sixty three point one million or two dollars and seventy four cents per share compared to a lot sixty point seven million or two dollars and seventy two cents per share in the prior quarter on an a deputy with our basis or net loss was forty seven point three million versus forty six nine and the prior quarter and we turn our attention to the future i would like to summarize our high level guidance for boy year twenty twenty three league back consolidated pgp to grow to nearly one billion expect our revenue will grow by over forty percent i'm expect are adjusted ebitda lot will be one hundred and forty seven million we offer reiterate our expectation that we will be adjusted ebitda positive by year end twenty twenty four i'll quote by pointing out the we posted a supplemental analysts package on our website which has more detailed information and our outlook for the individual did that one that will be reporting hundred and twenty twenty three
spk_4: you'll find that additional detail helpful in understanding about business trajectory
spk_0: with that i'd like to thank you for your time today the open line for question certainly we will now begin the question and answer session if you had like class the question please press start followed by one on your telephone keypad it for any reason you would like to me that question please press star followed by for you
spk_5: again to ask a question press star one as a reminder if you're using a speaker phone please remember to pick up your handset before asking a question will cause you briefly as questions are registered
spk_1: the first question from the line of bat carlotti with giant he please proceed hey thanks good afternoon i was hoping you could comment on the new reinsurance program that you could announce are you put in place to start the year
spk_2: you know just be have wanted the it a dog he had looked to put or peter student place across year i know a dynamic reinsurance environment and and to just be go through what we should expect to terms of the financial impact if i'm if i'm understanding a correct it feels like the a net loss ratio should start to come down to approach the gross loss ratio and that aren't it's like an hour maybe i'm understanding that that is that accurate yeah a matt i think face with the question are going to start with the beginning part of to work in japan was more specifics on for some although i do want to introduce to the group i'm chris donahue a christmas or chief operating officer he's been with us now for nearly two years and cricket team have been instrumental all in a significant loss ratio improvement and the geographical diversification that we've achieved in such a short time period because of these improvements we did see very strong support for the reinsurance markets in fact we had nine participants on the program this treaty and in keep in mind when our reinsurers are evaluating the participation
spk_1: they do a tremendous amounts of for looking calculations taking all the actions that we've already put into place and bringing everything to current rate level and i think that's where you saw sort of the boss nature that they had on on our program
spk_6: am i am pleased that we we actually achieved improve terms and conditions during a very difficult reinsurance market i'm in because of all of these things because of the improvements we're we're structurally shift been to an environment where we're going to retain more risk in areas that we can control sort of the day to day attritional losses i'm yet we're still very much protecting the balance sheet and that are outside of our country such as the weather so that's kind of the structural components to what you want to jump in short a that how could add a little bit of color in terms of and agile an act of the treaty twenty twenty three
spk_3: as rick that were were making a structural shift but also the treaty and twenty twenty three going to bring a premium that retain more in line with often
spk_6: we retain our twenty twenty two treaty at last participation features that men or the non severe weather portion of the rest we retain about thirty percent of the exposure but only retain around twelve percent of that retained premium ah in twenty twenty three that numbers are gonna come much closer together or
spk_7: our underlying exposure in the non year whether category and up to around forty two percent or t v and that we're going to retain it's up to thirty nine percent so much larger increase in a premium and underlying exposure the way that will work itself into our financials is
spk_6: as healthy portfolio transitions from the twenty twenty two treaty onto the twenty twenty three treaty at each of the runners you'll start to see the economics play out in the financial so we look imagine that gap between growth and net loss ratio
spk_3: when ab in in que one most of the economics will still be on the twenty twenty two tree and we have doctrine and he a high
spk_1: like net loss ratio there because of that mismatch between was retention and and premium retention but by the fourth quarter of twenty twenty three were expecting it to be much much closer so i would say probably going to be in that two hundred watts percent range in the first quarter but by the end of twenty twenty three till date be down below hundred
spk_0: along with a the gross loss ratio perfect that very helpful we should the answers
spk_6: thanks man thinking the security the next question as the line of tommy with toying with kbw please proceed hey good evening as links are taken my questions so i do appreciate them the the increase disclosure of the segment level if you could sum it up just what is the nypd some i guess of business either on revenue or earnings are not subject to this loss ratio volatility and if you could you so or described that in terms of either twenty twenty two or twenty twenty three and then just thinking about longer term i use your next shift and yeah absolutely a sonic for the question
spk_8: i think i'll start by getting a little bit of contact them in terms of how we think about the didn't have increasingly were viewing the hippo customer experience which with you at differentiated in the market as not limited to people who are covered by have a policy that also will include people who buy a policy
spk_6: from a third party carrick from a third party carrier through hit up as an agent
spk_3: have you if you and i and appreciate you mentioning their supplemental package where we talk about twenty twenty three guide and this is all laid out in that packets i'd encourage everybody the take a look at it
spk_6: but if you classify the component of our business five business model they fall into three basic categories there's recurring the best revenue know underwriting exposure were calling that services
spk_3: and that's about forty percent of are expected twenty twenty three are generated premium
spk_6: the second bucket is in that primarily feebates revenue that had limited exposure to underwriting result
spk_2: qatar and occur program that that's where we support other and g eight by by renting our balance sheet to them in exchange for ah for feet
spk_6: that's about thirty percent of are expected twenty twenty three will generate a premium ah and the final bucket which is about home insurance program where the economics of be seen are primarily based on the underwriting result of the about thirty percent of our twenty twenty three military your tamia if if i could have one more thing i actually think this helps the for chairman of generation better customers when we actually have options the don't necessarily fit our underwriting appetite or the way we think of customers who truly want a partner to help them protect all aspects of their home we still have the ability to meet their needs and place them with one of our partner carriers that my very well have a different underwriting appetite in a different business model now those customers over time we still can provide hippo home services to
spk_3: two and couple home care so it really does create an environment where the a couple experience is a combination of hippo home placed policies third party policies including cross cell and the ability to generate more customers that would participate in it belong here
spk_6: thanks in and series biggest clarify said that those those figures wanna on a t p basis
spk_3: as you think about just kind of the earnings i guess contribution of those to do those ratios er percentages hold generally true as we look at twenty three three i think the answer that question it in print and twenty twenty three than it would be over the long term because right now a bow is not profitable it isn't business
spk_9: and that it primarily as we discussed on previous calls because we're still working on
spk_3: improving the loss ratio lot of the activity that need the undertaken to improve lottery in particular the ad or a plan are largely
spk_10: largely underway and and with a very confident that were on the right track their but in twenty twenty three
spk_3: services business we expect that you lose money but that's a good idea for us from an economic standpoint because the the underlying business there is profitable and so most of the losses are gonna be coming from growth oriented expenses i'm dead
spk_11: insurance or the service program businesses actually acted to be profitable in twenty twenty three and the bulk of the losses
spk_12: florida the overall hippo consolidated business
spk_0: come from the hippo insurance program but added that those we feel very confident are shrinking overtime as the loss ratio down so we can talk there's more detail in the upper mantle package and we really today on the guide there but a yeah today
spk_2: is not the same as as what i expect the long term ah contribution to be a because i think long term each of these businesses are going to be profitable great a double thank you thank you mister mic joint the next question as from the line of yarn you know whichever you prefer seen
spk_6: good afternoon this is andrew on for your own can you help us think about how the company views it's read adequacy and and pricing needs for twenty three
spk_13: andrew i think this is a great question for up for krista take so christie wanna answer that friends are great great things enter question yeah the reply that we accept set forth and twenty twenty two twenty three twenty three is er physicians top priority
spk_6: we're you continuing to proved overall rate level but also improve our ability to line or a tourist so we can price risks are properly and marketplace
spk_13: the majority of the efforts that we need to achieve our our our goal of the sixty five loss ratio ultimately have didn't put in place are underway
spk_2: in two thousand twenty two we already talked about twenty percent written rate increase we made sixty four plans and in twenty eight days are the benefit of those rate increases or have started to earn in and will continue to impact on a twenty two twenty twenty three and twenty point of course forward in twenty twenty three will take increases in the hiking so will do pretty much the same thing that we we accomplished in on twenty two and will make seventy three bottlings and thirty one states we've already taken significant round next using that strategy with eighty five percent of the filings necessary to achieve that about having already been submitted to a department of insurance a nice to be spawns was significantly and dec twenty twenty three will continue to see the compound in effect of the last two year years of rate earning in through twenty twenty four and see that in fact the significantly the loss ratio last results that we see going forward yeah and your i think this thought this explanation explanation is very much aligned with my own opening comments related to reinsurance in the bullish nature that the reinsurers have because their answers forecast out all of these actions already taken think everything up to current rate level take both exp
spk_14: poser and rate changes into account and identify what both are medium and long term loss ratio is going to be so we're really pleased at the the activity that the and an actual team has have already done for twenty twenty three
spk_2: grade that that's very helpful thanks and as we think about ongoing underlying improvement ear is the correct comp the sixty six percent and twenty two relative to the sixty seven and twenty one so you're just given the rate actions over the last year and perhaps in the twenty three as well so we think about the pace of that improvement accelerating not totally following your question k up mean look at ease
spk_3: sure yeah do you think about the sixty six percent gross loss ratio excluding cat and poi the as about a hundred basis points year every year improvement the from sixty seven percent and twenty one so just given the that pays a rate filings with should we expect the a stronger improvement and underlying loss ratio and twenty three yeah but that the really good question yes as you continue to as these rate actions continue to work themselves into the portfolio rate actions that we've taken generally do help the underlining loss ratio pretty significantly this is why we have great confidence that saw that we're going achieve our goals of casual positivity by by the end of twenty twenty four we are very much a we're very much on track in in feel very good about what we what we presented during our investor day they had done that with a were going to get there i don't the lepage it at a little that a color
spk_15: to that question i think what you're seeing in in the results
spk_3: despite all the rate action i and basically why why at the non pps or loss ratio only come down to a little bit and i think what not easy to see if you don't live it every day and businesses that we've actually been lowering your geographic diversification the overall exposure to at risk and the portfolio and so if you have a a home that in a paper has very low at read nearly all of the premium is related to the it's
spk_2: lot if you have a home that it in a very high tatras you know part of the country and a substantial portion of their premium is paying for that cameras and so as we bring the overall cat exposure in the portfolio down you would otherwise expect to see a non pc as core loss ratio increase
spk_16: because more the premium would be going to to pay for those attritional losses
spk_6: the fact that we're bringing it down is a function of the the rape plan and under any improvements that with nato up here
spk_17: yeah andrew the and the last thing that i would say on the topic is really understand in the way we categorize or the category of losses so we have two categories we have p c s claims and all other the all others a combination of attritional and on p c s weather so they're still weather in
spk_12: that sixty two our sixty seven whichever particular number you want to refer to but it's it's not on pc yes whether if that's awful
spk_0: yep thanks
spk_18: have a look at you know the core lottery you just look at you for that the corn on pts loss ratio was if people are present so that they detected that is a average over the course of the year but we are being a positive trend rapidly throughout the year
spk_19: good thank you thinking that's nice the next question comes on the line of out caught with goldman sachs please proceed
spk_3: yeah
spk_6: question
spk_3: you're pursuing a healthy guy who's just the and be updated reinsurance program did you have this thing through is the last participation still remaining i thought you know in the slides did your local you can only modestly higher than the premium or irritating in a base case as good mckenna variability we have around there like helmet laws participation are you
spk_6: go have how does it compare to where you didn't have any to help bring more that birth
spk_20: out thanks to the question is the stewart of darden any requests that am happy to attend an opponent us
spk_19: the lot participation features in the only twenty three treaty are still there over were being paid or the taking a risk ourselves to that's that's what we said earlier about that the higher retain premium in general the court ours we have are narrower
spk_3: than in the twenty twenty two treaty oh there's less variability from from the corridors ah and they attach at rates that are more favorable to about and they did and twenty twenty two so at are expected loss ratio i'm expecting a date and to be a much smaller percentage of our overall economic x in and twenty twenty three and they were in twenty twenty two yeah that that's helpful
spk_2: them and then you know the the common the didn't know to get the required capital to do is they do that as well i mean there's a part of it looks at it says your your your paintings so much more in almost borax more than you were before and like i didn't use to the put more cameras in place because you unplug that a little bit more person or business and how i mean it's into going to be truly get this much more premium and and it doesn't require more capital athletic there to thing going on there the actual underlying risk retained it not for acts what it was because of the locked especially teachers in the twenty twenty eight so ah the risk retention is modestly higher but not for x higher even though the retain premium is closer to four act
spk_3: higher so if it is at an economic shifting away we're thinking about the the treaty but oct i think that reflect and leave the
spk_6: it'll improve many that the loss ratio twenty twenty three relative to twenty twenty two the other yeah the there's one other thing to alex to keep in mind as as we continue to geographically diversify the exposure from catastrophes is actually come down and when you calculate all of the
spk_3: but the pm owls versus the exposure
spk_21: we actually look like we have less exposure to whether in particular state or other or other large events like fire so to diversify the diversification on the geographical exposure is also helped ah
spk_3: the total exposure to the company adnan sorry that he are the one final point i wanted to make was i'm in twenty twenty two we were such heavy buyers of reinsurance and had we looked at the and that be higher score and know
spk_6: when navigating the air
spk_3: zarif maintenance of our and that a minus rating and eight the calculations actually analyzing us with a credit risk and i'll be on the reinsurance that we were buying and so and we actually increased our participation and and and bought let go to share insurance we actually get abbott
spk_19: oh relief from and that in the be our model and so we were we were paying a heavy penalty in that in that framework because we were such a heavy lezard reinsurance now are we sort of found sweet spot where where matching up you know that benefit we get the glacier insurance and the exposure that we're taking out it's that
spk_2: we can go into more detail on that it yet further questions but it's the function of book exposure and the at the way we're getting off the roof
spk_22: john it is that help home
spk_2: and the maybe one more equipment for me a little bit analyst the own i mean how how would you think about earthquake exposure and to give you when we're constantly california earthquake activities of embed just in general globally some discrediting drew a get your policies burnham covered with a they may cover like the sec
spk_23: canary buyers with it because he liberals think drew like now you're in turns program would have been with that kind of or it
spk_24: yeah alex i think i mean clearly your hundred percent right you know quakers quake is not covered by fire following is an fire following would be subject to any type of other exposure we have in the in the portfolio so we don't think
spk_0: it's a significant exposure for us
spk_25: chris anything you want it knights it is covered with in the rangers regret but as doubling rp driver barrel of of a brisk for us and we feel it's it's managed within our portfolio it make you
spk_2: thinking it's just got i love sustenance from the line up pablo things on with jp morgan frequency hi thanks for taking my questions or the first one i had was a dozen the upper shooting the home builders market can you give a sense of the market constitution their below the top ten i can get reference a half of the market but no of the is the top eleven to twenty a good chunk of the fifty percent or that more this even the to be read and then of as a fall under that didn't describe you know your sales organization are talking about i'm offering your services to the to be percent of the market there yeah i think gum ethics of them to keep in mind this is the question that has come up in the past which is if there are slowing housing starts a reduced housing starts how much did that impact our growth and that particular channel and whether your top ten eleven to twenty or the long term what we call long tell builders of the more regional our local builders on for the purposes of the of the builder agency that we established hippo is such a small person vintage of the total compared to the total it we still believe we're right it early stages of maximizing the sales funnel with those particular builders i'm even in down and depressed years they're still over a million housing starts and we are a small percentage of those so the other the vast majority of the of the homeless been built are being built but along tell builders not the top ten builders so really gives us an opportunity to maximize growth in that particular channel over time now when we think about ourselves organization or
spk_25: cells organization as it relates to home builders is not a be the see effort for the most part it generally is working with the builders in creating partnerships in which they believed that the technology that we've built it hippo allows for quick real time quoting on a house that has not even been built yet and that is a significant advantage to what we built in the builder channel because if you go to a traditional agency and you're looking to you're looking to build or she read to ensure a house
spk_2: haven't been built yet what is the address of that house you know is that lot seven section sex it it's very difficult and what we do is we actually get the data files on every model of the builders we partner and that make the transaction close quicker and at the end of the day that's what everybody wants the consumer wants to get into their new dream house the builder wants to close the transaction and we facilitate that i'm in a meaningful way thank you and then my second question was about the first connect the says guess to here
spk_26: any contacts he can provide their out when did you set it up and i guess of the that the how do you think it compares as an independent is the platform against alternatives out there or something of clusters and aggregators and if you could go to serve you know that the revenue model hi charged with your business for by but i guess it's overall how you think about that as an alternative
spk_12: versus what's out there for independent eight attacks
spk_0: yeah i i so first of all first connect with an acquisition that we made a few years ago so it wasn't something that we started from scratch now what we have done since our acquisition of first can act is we've invested hippo technology into the infrastructure that first connect had so hippo as build tools for
spk_2: independent agents i'm and our internal cells people to really accelerate the quote the buying process and we felt it was appropriate to offer the same types of tools not just for a hippo policies but for non hippo policies to the network of into penny insurance agents that utilize the first connect platform so it's not just a traditional aggregator it's an aggregator with significant technology that helps agents streamlined the quota buying flow and we monetize that through a commission split and other fee
spk_0: these that we generate from from other services that we're providing so we think it's an important platform and it utilizes the technology that we already have
Disclaimer