InsurTech Hippo, a home insurance group focused on proactive home protection, announced Monday that it has appointed President Richard McCathron as chief executive officer, replacing founder and prior CEO Assaf Wand.
Wand has become executive chairman of the board to focus on long-term strategic initiatives, the company said.
McCathron, recently interviewed by Carrier Management’s Elizabeth Blosfield about the company’s improving underwriting results, has served on Hippo’s board of directors and as the company’s president since February 2017. (Related article, “Hippo Sets Sights on Improved Gross Loss Ratio, Geographic Expansion for 2022“)
Before joining Hippo’s executive team and board, McCathron held senior executive positions at multiple insurance companies including First Connect Insurance as its president and CEO from 2012 to 2017, Superior Access Insurance as president and CEO from 2007 to 2010 and Mercury Insurance Group, as a regional vice president from 2004 to 2007.
In his role as president of Hippo, McCathron was responsible for all day-to-day operations of the company, enabling him to develop a deep understanding of Hippo’s customers, partners, and unique technology capabilities.
Wand said that McCathron has been his “partner every step of the way, from the creation of Hippo’s strategic vision, to growing our strong stable of partnerships, to driving the company forward every day,” adding that it is a natural progression for McCathron to step into the CEO role during Hippo’s next phase of growth so that Wand can focus on the longer term.
During the recent interview with Carrier Management, McCathron described the improvement in Hippo’s first-quarter gross loss ratio to 76 (down from 198 in first-quarter 2021) as dramatic. For the full year in 2021, Hippo’s gross loss ratio was 138, according to information in the latest 10K filing.
“Underwriting profitability is really what will be the sustainable future” for Hippo, he said, explaining that insurance leaders hired over the last year set their sights on improving the loss ratio and expanding nationally to improve geographic diversification. While Hippo has been talking about such expansion since 2018, when it first partnered with Spinnaker Insurance, ultimately acquiring the carrier in August 2020, the 76 loss ratio in first-quarter 2022 was the best quarterly loss ratio that Hippo has recorded since becoming a public company last year.
“As a new player, it takes time to get the underwriting results where you want them,” McCathron told CM. “You have new customers, not seasoned customers. You’ve only gone through a few underwriting cycles as opposed to multiple underwriting cycles. And we recognize that now as a public company, it is very, very important for us to have credibility in the market.”
In addition to expanding geographically to counterbalance a concentration in Texas and Florida, with its most recent move going into New York, Hippo has also tightened underwriting and hiked rates in problem areas, he said.
Read the full interview in the related article, “Hippo Sets Sights on Improved Gross Loss Ratio, Geographic Expansion for 2022.”
For three straight years, McCarthron has also authored Executive Viewpoint articles for Carrier Management giving his predictions for the industry at the start of each year. His articles are: “In 2022, Innovation Will Prevail“; “Executive Viewpoint: 2021 Will Bring Bolder Bets on InsurTech Innovation“; “Executive Viewpoint: In 2020, InsurTechs Will Lead the Way”