Hippo's Legs Look Shaky

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Hippo’s Legs Look Shaky

Everyone can point to industries that, in recent decades, have been disrupted and decimated by technology (retail, travel bookings). In other corners, though, are industries where innovation has been harder, but not impossible (health care, investment banking). Somewhere in between has been insurance, a sector obviously in need of innovation. Within the last few years, there have been many would-be disruptors—such as Lemonade and Root—that put the likes of Allstate and GEICO on high alert.

And yet, at best, most of the insurtech disruptors appear to have stalled, reminiscent of the pattern that led to the dot-com boom and bust. One of the most prominent examples has been Hippo, the Palo Alto-based property insurer. It launched in 2015, with promises to use artificial intelligence (AI) and big data to make the insurance experience faster and the business smarter. It raised gobs of venture capital, and in 2020 acquired Spinnaker, a more traditional insurer, which looked like a sign of genuine disruption. The company went public in August 2021, through a special purpose acquisition company (SPAC) transaction backed by LinkedIn cofounder and venture capitalist Reid Hoffman and other heavyweights. On the day Hippo began trading, the company was valued at $5 billion.

But Hippo’s life as a public company has been very rocky—though, to be fair, much of the turmoil has been sector-wide.