Hippo Enterprises, an MGA InsurTech focused on homeowners insurance, secured a $350 million capital investment designed to help fuel further growth. A related reinsurance agreement is also part of the deal.

Assaf Wand/Hippo

Mitsui Sumitomo Insurance Company, Lt., a subsidiary of MS&AD Insurance Group Holdings, Inc., is making the investment in what both companies are framing as a partnership. MS&AD Ventures, a company division focused on venture investing, participated in the company’s Series E financing round.

Additionally, Hippo and Mitsui Sumitomo Insurance Company, Ltd. plan to sign a reinsurance treaty. Mitsui Sumitomo will take on a portion of risk to support Hippo’s Insurance Company, a national property and casualty insurer licensed in 50 states and rated A- (Excellent) by A.M. Best Company, the announcement noted.

“This investment and [MS&AD]’s initial investment in our Series E funding round in July 2020 are both signs of a strong alignment between the two companies as is their participation in our reinsurance panel,” Assaf Wand, CEO and co-founder of Hippo, told Carrier Management via email.

Wand noted that Hippo has previously secured investments from other strategic partners including Comcast and Lennar, and MS&AD’s investment is similarly structured.

“The investment by [MS&AD] should not be misconstrued as anything other than a deepening of an existing relationship, which we expect to continue to grow over time,” Wand said.

While some InsurTechs such as CoverHound have allowed themselves to be acquired, Wand said in July that Hippo plans to pursue an IPO in 2021. His comments came in the wake of a $150 million financing round.

Through this partnership, Takashi Sato, a managing partner of MS&AD Ventures, will join Hippo’s board of directors as an observer.

Shinichiro Funabiki, Director, Vice President Executive Officer at Mitsui Sumitomo said in prepared remarks that he looked forward to the companies’ strategic partnership, and “providing high value-added products and services to customers of both companies in the U.S. and Japan.”

Plans call for using the cash infusion to support Hippo’s product rollout in additional states, to reach 95 percent of the U.S. homeowners population within the next 12 months, and to provide additional capital for its insurance and reinsurance companies.

Hippo, based in Palo, Alto, Calif., provides home insurance online, and also offers a smart home device kit for eligible policies and additional coverage for positions such as appliances, electronics and home offices. Currently, its products are available to more than 70 percent of U.S. homeowners.

Sources: Hippo, Mitsui Sumitomo Insurance Company