Hippo Holdings Inc. (HIPO) Earnings Call Transcript & Summary

All right. I think we're ready to go here. So welcome back, everybody. I have Rick McCathron from Hippo, joining us today. So thanks, Rick, for being with us.

Thanks so much, Alex.

And so what I'm going to do. I got a really quick compliance statement. We'll give Rick to give us a quick background on Hippo and then we'll dive into some of the management changes and the other things going on with the business. So I guess, first, we're required to make certain disclosures in public appearances about Goldman Sachs' relationship with companies that we discuss. The disclosures relate to investment banking relationships, compensation received are 1% or more ownership. We're prepared to read aloud disclosures for any issuer upon request. However, these disclosures are available in our most recent reports available to you as clients on the firm portal. Disclosures and updates to those disclosures are also available by ticker on the firm's public website. In addition, disclosures applicable to research with respect to companies, if any, mentioned herein are available through your investment representative. Also the views stated by non-Goldman Sachs personnel do not necessarily reflect those of Goldman Sachs. Okay, done with that. Rick, do you want to give us the background on Hippo, I know a lot of people are familiar with the company, but maybe a brief background, some of the things that you guys are focused on, and then we'll dive into it.

Yes. No, happy to, Alex, and Good morning everybody. At Hippo, we're really about total home protection. Our view is how can we protect the joy of homeownership to our customers. Insurance is a portion of that, but it's not the complete aspect of what we do. We think insurance is the backstop when things go wrong. But what we're really focused on is what can we do proactively, preventatively through the use of smart home technology, enhanced underwriting, very proactive measures to make sure that we are essentially protecting that joy of homeownership and providing the best claims experience possible, which is avoiding the claim entirely. So if you look at us, as a company, everything that we're doing is very much in that vertical stack of making sure that we are protecting customers for things that could go wrong with their homes. We wrote our first policy a little over 5 years ago, and we continue to grow and enhance our underwriting profitability in the process.

So maybe the first one, just to jump into some of the news you all announced yesterday. Can you speak about the CEO transition? And why you guys thought the timing was right for this change now?

Yes. I recognize that CEO transitions can be significant things for certain companies. At Hippo, this is the biggest nonevent in our history. I've been a Assaf's partner since the beginning. Assaf and I met 5.5 years ago. His role of Executive Chair is absolutely going to be a collaborative one. Assaf and I chat 2, 3 times a day, every day and we very much share sort of the future and vision of the company. This was one of the things when I first met Assaf, the idea was a business development partnership. I was managing an auto insurance MGA and my reinsurance broker suggested that I meet this guy that's getting ready to start a homeowner's insurance company. And this is back in December of 2016. So I flew out to California, I live in Austin, Texas and met with Assaf and a 1-hour business development meeting turned into an all-day meeting and as I was driving back to the airport, Assaf said, Rick, I really need a partner on the insurance side of the business. Will you come and join me? I said, yes, in the car driving to the airport. Then I spent the entire flight home trying to figure out how the heck was I going to divest myself and the company that I was in? So I very much shared Assaf's vision when it was just an idea, and I'm really pleased that we can continue the vision that he had as the company continues to move forward. But I think internally, if you ask the 600-plus employees of Hippo, who would be the next CEO, I think you'd get 595 Ricks, and you get 5 people that would vote for themselves, which is not uncommon. Kind of the culture we have at the company, we actually believe people have an obligation to descend. It allows us to come up with new innovative ideas that people are doing -- that people are thinking about every day. So very little change in the company, and we're just looking forward to what we can do going forward.

And I guess, just in terms of the mechanics, when will it be effective? And also, I guess, how long has it been under consideration?

Yes, it's effective immediately. But again, I've really been running the day-to-day operations of the company for the last several months. I've been on the Board for several years. It's -- this isn't the kind of thing that we actually planned on happening. This is the kind of thing that as the company continues to mature, as the company is shifting its focus a bit to underwriting profitability, when we look at and when the Board looked at different strengths that Assaf has versus I have, thought that this would be the right sort of shifting of responsibilities and the right transition given our various skill sets. But again, it's not -- it's really not a situation where Assaf is going to be any less involved. It's just responsibility shifting a bit more towards something that I have a strength on, which is building a profitable underwriting company while continuing to maintain growth.

And some of the questions that come up around some management changes. One of them is sometimes is the CEO that's moving to a different role, going to sell any stock. I mean is Assaf planning to do any of that?

Certainly don't think so. I think we both feel that the company's future is incredibly bright. Of course, as an Executive Chair, he'd be required to disclose any transaction in that area, but we are as bullish on the company collectively as we have ever been. And I think he recognizes what long-term potential is versus what's going on in the macro environment.

Got it. And then just any other changes we should think about from a management standpoint, anything else structurally going on? Will Stewart continue to be the CFO?

Yes, I'm pleased that Stewart will continue to be the CFO of the company. Stewart has certainly been our partner for the last several years and really excited about the team that we've built. We've been able to really grow the executive leadership team over the last year, 1.5 year to bring on world-class individuals, both on the tech side of the company and on the insurance side of the company. We really think that we've got a leadership team that can stack up with any organization in the world. And they're fully bought in. One of the things that we've really done a good job, I think, is hiring missionaries, not mercenaries. People that absolutely believe in the long-term view of the company, what we're trying to achieve and are sort of fully-in, burnt their boats on the beach kind of folks and we're excited about the team we have. And we think that for the most part, on the executive leadership team, we're well positioned.

Got it. And just in terms of Assaf's level of involvement, will anything change there? How will that be going forward? I think you've sort of answered it or however indicated it with other question, some of your other responses, but just interested if there's any change to expect there?

Yes, I think the biggest, what I would consider noticeable change within the company, is just the real shift of the day-to-day. As I mentioned, this has been happening, but I think now it's more or less official. I think you'll see that. Look Assaf and I chat, all the time. When the Board had its vote on the transition, one of the things that Assaf said is I'm still going to call Rick 15 times a day, and I made a joke much to my chagrin, but the reality is, Assaf and I share the same view of what this company has done, what it will do and the potential it has. And frankly, Assaf is hands-down, one of the smartest original thinking individuals I've ever been around. And I'm going to continue to tap him as much as I can. Assaf's also looking -- constantly looking at strategic opportunities for the company, he's very good at that, and we'll continue to have him do that in his role as Executive Chair.

So I guess as the new CEO, I mean, what is the direction you want to take the company? What's your vision for Hippo?

Yes I think bottom line, it's really doubling down on the total home protection mindset. I think that's something that is often misunderstood at Hippo or about Hippo rather, not internally but externally, is that we really have a business that has insurance at its core, and that core has to be profitable. There must be an underwriting profit in the core business. Ancillary to that, we have the total home protection services, the agency that we have where we cross-sell other products, the fronting carrier that we own at Spinnaker Insurance Company, all of the other aspects of the business that really create fee-based non-risk-based revenue in the company, really along the idea of what is it -- how is it adding to that home protection mindset. As a company, we often get asked questions like, are you going to build an auto insurance product. And our answer is flat out no. We think that our view is doubling down, being very deep in home protection, making sure we're world-class in all aspects of that. And when our customers ask things like, we love Hippo Home, can you help me with car insurance? The answer is absolutely yes. In the agency we own, we are more than happy to pair a Hippo home manufactured product with a best-in-class auto insurance or pet insurance or life insurance or umbrella insurance. Whatever the customer needs, we have an agency and we fulfill that and we get fee-based in the form of commission revenue for that. But anything we build will be built towards the total home protection mindset.

Got it. Okay. So now I'll jump into maybe some more detail or any questions around the business. We've heard a lot about embedded products over the last day with the conference. I know that's something that you all have been focused on with some of your partnerships. Can you talk about what you're doing there? How big is that opportunity for Hippo?

Yes, I think it's significant. Our fastest-growing channel is our partnership channel. And for the most part, our partnership channel includes embedded insurance products, whether you're a homebuilder like Lennar or you are a loan originator or a loan servicer title or escrow or real estate, as example, smart home companies where you're looking to protect your home, you're looking to close a loan, you're looking to move into that new home, having an insurance offering within that partner's flow to make the process as streamlined and as simple as possible for the customer really is a direction that we've seen great success in. It's also generally positively selected customers. Those customers are buying a house that's new to them, and so they care about it. They want to make sure it's maintained. I think you see this in the greatest way in our builder channel. They're brand new construction homes. People are excited to get into it, but the last thing they think about is insurance. Insurance is a friction point in that transaction and where you can embed a Hippo offering within that flow, it benefits the partner because they remove friction from the transaction. It benefits the customer ease of doing business, getting world-class solutions. And it benefits Hippo because we are getting customers at a relatively low acquisition cost that truly do want to partner with us to protect their home. So those are the reasons why it makes sense. We're excited about the partnership. That partnership also includes our ability to sell other products. So a lot of my insurance friends will say things like for homebuilders, Rick, if a homebuilder is building a lot of product or new homes in a particular area, you don't want to oversaturate yourself by taking too many houses in a particular neighborhood, maybe North Texas and a tornado may come through a Lennar neighborhood and wipe out 30 homes. We agree with that theory, and that's why we have other insurance companies that we partner with and other risk bearers that we partner with to make sure through the same flow, the customer is getting the best option imaginable, along with a diversified Hippo portfolio in the portions we take risk.

Makes sense. And just a reminder to the audience, if anybody does want to submit questions, feel free to e-mail them to me, [email protected] or you can submit them to Zoom, just wanted to remind everybody. So Rick, maybe going into the different channels you go to market, could you take us through some of the other channels outside of just partnership and some of the things you're doing in those channels?

Yes, happy to, Alex. I think the first thing that's probably most important is that we truly have an omnichannel approach. We think it's a mistake to tell customers how they should buy our product. We think the best solution is to be where the customers are, whether it's direct-to-consumer, untouched by human, direct-to-consumer touched by a human in our call center, maybe they have questions, that experience in itself is different than a traditional experience. Often times, we see a customer starting the online purchase and they pick up the phone or open up a chat and ask a question. We answer the question, they say thank you very much. They hang up the phone, they disconnect from the chat, then they finish the transaction themselves. So it's still a very easy nontraditional transaction. There's a certain subset of customers that very much enjoy that type of interaction. And we've built world-class technology to support it, technology that allows a customer to get a quote in 60 seconds, buy a policy in 4 minutes. We love that channel. It's obviously has very high lifetime value. You're not paying a commission split to an agent, what have you. But there are also agents -- excuse me, there are also customers that want to buy through an agent that they worked with for years. And so, we think it would be a mistake to significantly reduce the addressable market by telling customers, no, no, no, you can only buy our product a particular way. And so, we have built technology equal to our customer online experience to make the agent's life easier. And we sell close to 50% of our policies in an agent or other insurance company mindset where it's much more traditional. Now as that pendulum starts to swing from more agent-driven business, and I'm talking on a macro level, to direct-to-consumer business, we're well positioned because we've built both. Then as we mentioned before, the third aspect is that partnership channel that we're very excited about. We think it is the right blend of getting to the customer at the right point in time through a frictionless process that are positively selected individuals. So I think all of those channels is something that we embrace because we do think insurance companies really need to stop looking at the agent as their customer, look at the end customer and say, what does the end customer want? And, by the way, I've spent my entire 30-year career working with agents. The agents want the same thing. The agents want their end customer to have a very frictionless experience that they can be proud of, a story they can tell. If you think about some of the smart home technology we provide to customers through our smart home program, that creates a talk track for agents to say, Look, I'm going to put you with a company that's going to partner with you, if you opt in to their smart home program, you're going to get IoT devices, risk mitigation devices to help protect your home. That is a message that really resonates with the best types of agents that aren't just interested in selling something and moving on, but truly want to partner with us. And so what we really look for is what is the best way to put a Hippo product in front of as many people who really want to protect their home.

And I had one come in from the audience that I think is probably good to pivot to. When you talk about total home protection, could you talk about like some of the services that you provide as part of that, what could that look like in terms of the fees and the pay structure? And how does that factor into the way that you may partner with some of the other incumbents in the industry?

Yes I think, first of all, from an insurance perspective, total home protection would be insurance products that help customers protect their home, things like flood insurance, home warranty, homeowner's insurance, gap insurance for leases, sort of those types of ideas that really help the customer protect against a typical peril, one that one would expect. The part when we really emphasize and talk about total home protection and something we're really driving to over the next couple of years is the idea of preventative. The idea of having a home health concierge go to somebody's house and identify items that are problematic that might create a loss down the line. An example, have one of our total home protection concierge go to your house, they look at your hot water heater. They see the bottom of its rusting out. They know that, that's going to rupture in the next year or so. Maybe that hot water heater is in the second story closet. So when it ruptures, it's going to go 200 gallons right through the floor, all the way down on to the grand piano that might be below the hot water heater. The idea of partnering with those customers and saying, hey, let's get a vendor out here that can get that thing fixed for you on your timeline as opposed to waking up some morning completely flooded out of your home. It's that proactive piece of that. It's understanding what utility -- excuse me, what appliances they have in their house, understanding what failure points might exist, really trying to prevent claims in the future. That's -- it's really that proactive preventative piece. So if you look at the economics of this type of business, it benefits the underwriting side and the insurance side because you truly are taking a risk that one might construe as average and making it a better risk because you're eliminating exposures. A great example of that is our partnership with Lennar. Lennar puts a water shut-off valve in every new construction home. That all but eliminates interior water from that particular home. That is the best preventative measurement that you can take in a home. So those types of things are the types of things that we're doing, which improves the underwriting result. Also, there's fee-based revenue for the services, and there's revenue split with the vendors that we partner with that come and help the customer protect those items or fix those items. So this is, of course, an iterative process. We are, of course, developing into this but we have strong conviction this is what the customers want, and we're continuing to build that total home protection platform that we don't think exists in the industry.

So now maybe shifting gears a bit. I wanted to talk about the repricing effort, obviously, between inflation, some of the severe weather that's out there, et cetera, there's been some shifts going on in the overall industry, and I think some specific to you in terms of the repricing that you have going on in some geographies. So could you talk about that? Where are we with that process? There's been a pretty meaningful rate take and I know that's got to earn-in, but sort of where are we in sort of the waiting aim for some of that to begin earning in?

Yes I think for us, there's really 3 components that we're focused on. So the first, of course, is the repricing, making sure that we have adequate price for each of our customers. The second -- and I'll double-click on these in a second. The second of this is the idea of underwriting, really identifying customers that resonate towards that total home protection and write those customers with Hippo. And so, it's the underwriting, making sure that we've closed any sort of gaps that we might have in our underwriting process. And the third, which has sort of been the bane of our existence from early on is the geographical concentration, being overly saturated in places like Texas and California. All 3 of those are well in flight. So our view is that we have very clear line of sight of where we need to get to and the steps we need to take to do them. And we're generally sort of halfway through that process. And by halfway through it, I mean, we identify what we need to do. We file the change with the regulator. The regulator takes time to approve the change, some states, it takes a week or 2; other states, it takes 10 months. Letting the regulator approve it, our technology stack allows us to implement very, very quickly. So there's really no delay on the technology side of the house and then applying it to a renewal of a policy and then let it earn in. If you look at that entire process, it's a couple of year process. Much of the work has already been done, and you're starting to see it on our gross consolidated loss ratios over our last several quarters. And it's our belief that we just need to continue to go down that path, let those earn in, also be very proactive as it relates to rising inflation costs and what's going on with weather patterns. So one thing that we do very differently, which I believe is the reason we were oversubscribed in our core reinsurance treaty in January is that we reprice every single policy at every single renewal as opposed to some standard inflation guard, which has been relatively the standard for the industry over time. Our ability to see real-time inflation and apply it real time to that policy at its renewal, really does allow us better than anybody in our estimation to keep up with the shifting prices. If you're an incumbent carrier and you have a 5% inflation guard filed in your 8 filings, and it goes up 20% -- inflation goes up 20% labor and materials, you're really underpriced. So you've done 2 things: One, you're not getting enough price, so your loss ratio is going to be impacted; and secondly, you're not really providing the coverage that the customer needs because the customer becomes underinsured pretty quickly in an environment like this. So it really is a win-win for a customer perspective and from our perspective. So that's one of the things that I think is material. The other aspect is that geographical diversification, and that does have a lot to do with what's going on with weather patterns, weather changes, making sure that we have a broad portfolio. It's not that we are overly concerned with catastrophic risk, we are as much as anybody, what we're more concerned is a disproportionate amount of our business in a particular area that's going to get hit by catastrophic risk. If you're writing business in Texas, you should write business in the Northeast that might have different types of catastrophic exposure. We're not overly exposed to hurricane exposure, but if you're getting write hurricane, you also want to write some that has severe conductive storms or maybe wildfire. Again, we generally have a view of not being overly concentrated in those areas, but it's important to make sure you have a balanced portfolio, and that's really what we've done. We've just recently launched New York to help. It's a massive market that we have not been in, that will help our geographical diversification pretty considerably. Still a few other large states that we haven't gone into North Carolina, Massachusetts, other states that have non-correlated catastrophic exposure. And then, of course, which I think most people know, we are a pretty significant buyer of reinsurance. We believe in a capital-light model. We believe in protecting the balance sheet both for the company we own, which is Spinnaker and for our partner companies like Ally and Incline. So I think all of these things, we are well in flight, and we're excited about the progress and the results are starting to show.

And maybe just on retention, you're -- I think, a little ways in now to going through the renewals with the higher rates. You guys have had great retention in the past. How has that changed, if at all, through this process?

It stayed pretty static, which is we're happy with because we do have very strong premium retention numbers. And of course, the trick really isn't how much you're charging it in terms of retention, it's how much everybody is charging in terms of retention. And where companies sometimes get themselves in a bind is one end of that spectrum or the other, either they're way behind on taking rate, so their underwriting results really suffer or they're way ahead of taking rate, good underwriting results, but they're losing customers because the customers are going somewhere else that maybe hasn't taken rate. So it's finding that balance of making sure that you're proactively taking care of the direction that loss costs are going. You don't want to sacrifice the underwriting results. And as a company, we're not going to do that. But we also need to either explain to the customers the value add that we provide in our total home protection mindset and why it may make sense to stay with us. And it's the timing of how our rate changes impact others. We've done a pretty good job with that thus far, and we're bullish that the -- that our very high retention numbers are continuing -- will continue.

And just thinking through the balancing of growth and profitability, do you still feel like you can hit your longer-term growth expectations that you've previously talked about, even making out over more of a multiyear period with this new sharpened focus on profitability? Is there enough sort of going behind the growth engine to sort of overwhelm that?

Yes, we do. We've got confidence that we're going to hit any guidance numbers that we've suggested. I think the most important thing is recognizing that growth with core underwriting results makes absolutely no sense. There's no reason you can be a long-term sustainable business with core underwriting results. Equally, it's important for us to continue to grow the business. And our total generated premium comes from multiple sources, and we continue to develop those sources such as our agency business that is nonrisk total generated premium that brings fee income to the company. So we're excited about our growth prospects. Look, with our omnichannel approach, our top of the funnel is massive. Now we just need to make sure that we're only allowing the customers in the top of the funnel that really resonate to our total home protection mindset. So we think we'll continue to show the numbers that we've displayed previously. And we're continuing to improve the underwriting results.

And I have another question from the audience. And I guess just on the underwriting front, you mentioned earlier that you sort of been largely behind a lot of the things that are going on operationally in the business for some time. And I think the question is around -- what changes have you made to the underwriting process to the actual risk selection since you've sort of had your hands on it? And how is that changing the profitability of the company?

Yes so, I'll be careful not to let out too much secret sauce here, Alex. But sufficed to say, we run expected loss ratio on every piece of new business that is being quoted. And we identify customers that we think we can hit our target expected loss ratio in those customers that we can't. We're on our third version of our underwriting model, iterating, enhancing and advancing as new data sources come available as our book continues to grow, as we see a shift in mindset, which is important. The sort of the psychographic characteristics of a customer that really wants to protect their home is very different than somebody that says, "Man, I have to have home insurance. I just need to get this box checked." It's a different mindset. And I think as time goes on, our marketing message will continue to drive that sort of partnership mindset home partnering in this context with customers that really want to do it. So it is important to recognize the pedigree of individuals we brought in on the insurance team over the last 12 to 18 months that have really put these underwriting characteristics, these pricing algorithms in place, the claims handling, let's not forget claims is a major component of underwriting profitability. Our new Chief Claims Officer, Grace Hansen, is absolutely phenomenal. And the measurements that -- the steps that she's taking the measurements are starting to show and the results are starting to show. So it's an iterative process. I try to remind people that when Michael Jordan was 5, he had a lot of promise, but he was 5. And when he played against the high school kids, they beat them up a little bit. Eventually, Michael Jordan grew up and I think that's what you're seeing that sort of maturization of certain Insurtechs. They're starting to grow up. They're starting to get scale. They're starting to recognize how their book and how their characteristics of their customers perform. And with the tech platform that we have, it really allows us to react faster than the industry has generally. So I don't think Michael Jordan, in our context is going to grow up 1 year at a time, I think there's accelerated growth, and we're excited about the future.

All right. Next one I have for you is on the capital front. So when I think through the combination of the hard market for property reinsurance and the capital markets volatility that's out there, it's made cheap capital much harder to come by. Can you talk about what you already have available to you in terms of capacity? How much runway there is for you to grow the company?

Yes it's -- this is something that I think well positions us for the future. We're fortunate that we have a significant amount of cash on the balance sheet to sort of weather the storm of both the reinsurance marketplace and the sort of the macroeconomic components, $772 million of cash available is significant. Now what's important is that we have discipline on how we deploy that capital, where we deploy it. From an underwriting capacity perspective, a combination of our own carriers in the Spinnaker Group and the third-party carriers that we have with Ally and Incline, we have significant underwriting capacity in terms of balance sheet capacity for the foreseeable future. So we don't think we are going to be bleeding cash necessarily to support our growth. We think we have plenty of balance sheet capacity, both internally and through our third party. But we need to have discipline. We need to be cost conscious. We need to make sure that we can weather the storm. Companies that weather the storm well are going to come out of this in a very favorable position, and frankly, will have some opportunities because not everybody is going to weather this very well. So we have a lot of discipline around that. You asked about Stewart previously, our CFO. We spent a tremendous amount of time with our entire executive team on what are the things we need to focus on, 1, to hit our long-term objectives to really build that world-class home protection platform and what's the appropriate amount of focus and fiscal prudence to make sure that we don't run out of cash and we're disciplined in that.

Let's see. I have another one from the audience on the geographic expansion. And I guess the person was just interested in hearing about the progress expanding into different states. I think maybe by this point, I think it has been pointed to you maybe be a little over 40% and maybe we're a touch behind that. So just interested in how that's progressing and when you expect to sort of get to full capacity in terms of the states you can write in?

Yes. It's a really good question. I think the reality is what are the states that matter, either from a geographical diversification perspective or from a growth perspective, right? There are a lot of states that I personally love to go visit on vacation, but they really don't either provide that geographical diversification or they don't have a population base that really makes sense that will move our needle all that much. And so, we're focusing on the bigger states that do provide that diversification. There's only 2 or 3 states left that handle that -- that help with both of those. Now we also think it's irresponsible to either deploy a state or grow a state that we do not believe that state can produce a positive underwriting result after that sort of new business penalty that you would have when you're entering a new state. And so, we're being diligent on which states we expand into, making sure our underwriting model is refined to give us the best chance of maximizing underwriting profit in that particular state. So we've intentionally slowed the growth, both from geographical expansion and from within states that we're already in, to make sure that the rate action, the underwriting model, what we've done previously catches up to our desire to grow in those particular states. It's frankly the only responsible thing to do. And we're super close on that, as I mentioned before. We really feel like we've got a clear line of sight on what we need to do. And there's only a few states left, I mentioned 2 of them, North Carolina and Massachusetts. Those are the only 2 large population states that we -- that we're not in that we want to be in.

Next question I had one from the audience just on the competitive landscape. So maybe you could talk broadly about what you see in terms of the competitive landscape. And I guess, the person was just pointing out that there are a lot of homeowners insurance companies that are writing over 100 combined ratio and that's probably have a bit more scale than you all have. And with that going on, are you able to achieve the price and drive the kind of new business that you want?

Yes I think you have to have a certain belief that what we're doing is different. If you really view us as a traditional incumbent insurance company, I think you'll be woefully disappointed, and I'm glad that you'll be disappointed because we're not a traditional insurance company. Yes we have the discipline that a traditional insurance company has, Insurtech is made up of 2 words, insurance and technology, and we absolutely have the insurance pedigree to compete with much larger, more established companies. But that's not what Hippo's about. What Hippo is about is that total home protection mindset. What we can do, not a year out, but 5 years out, what is going to be a customer's expectation in protecting their home 5 years from now, not what they compare us with name incumbent here, mindset. And I think the important thing is to recognize there's a combination of measurements and actions we're taking with that proactive preventative mindset that does give us, over time, as our business matures, a disproportionate advantage because of the proactive measurements. And then from a bottom line profitability perspective, the fact that you're getting fee-based revenue in other areas that are not correlated with risk is a very different mindset. We do not believe there is a competitor currently that has the same vision that we do on the direction that the homeowners' insurance industry is going, and we're glad about that, because it gives us an opportunity to really refine the messaging, refine the actions that we're taking to build the company for the future. When I met Assaf the first time in that meeting, I shared with you, when Assaf asked me if I would join, I asked him 2 questions. The first question I asked him was who's going to run the insurance side of the business? He said, well, you are, that's why I'm hiring you. Great. Thank you. The second question I asked them is, are we building the business or are we building a venture? And remember, this was just right after the first fundraising round, when a lot of entrepreneurs would say how we're going to build a venture, we're going to maximize valuation, we're going to do XYZ. Assaf looked at me and said, Rick, we're building a business because if it doesn't stand the test of time, what are we doing here? We're building something that is going to change the way that the industry thinks about home protection. Every one of our employees is bought into that mission to make sure that we're driving that. And that's what we're keeping our eye on the price, keeping our head down, not trying to listen to the noise, really staying true to our North Star. What do we need to do to change the way people view home protection? And that's what we're going to accomplish.

Maybe the last one just for the last minute or 2 we have here. What is most top of mind for you for Hippo over the next few years? Where do you see the company and how are those top of mind items can contribute to it?

Yes, 2 different things: One, continuing the course that we laid out a year ago on improving the underwriting result, so continuing to see those things work in the business. By the way, it is not just a -- let's do it and we're done, it's a constant focus on making sure that our underwriting result improves, but then it continues to have a very positive result. That's one thing. The second thing is making sure we refine our messaging, making sure there are customers out there that truly want a partner to help them protect the joy of home ownership, very excited about our early progress in that. I think we've figured out at least in version 1.0 of what that looks like and now it's time to deploy it in a greater way.

All right. Well, thanks very much for joining us today. Good luck with everything, and thank you to everybody in the audience.

Thanks, Alex. Thanks, everyone.