Hippo Holdings Inc.

1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Hippo Holdings Inc., referred to herein as “Hippo” or the “Company,” is an insurance holding company incorporated in Delaware. Hippo has subsidiaries that provide property and casualty insurance products to both individuals and business customers. The Company’s headquarters are located in San Jose, California. Hippo conducts insurance underwriting through its regulated carrier subsidiaries. Its operations include providing insurance capacity and related services for its owned managing general agent (“MGA”), as well as in partnership with third-party MGAs and services that support the placement and servicing of insurance policies.

Basis of Presentation and Consolidation

The unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and include the Company’s consolidated subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain information and disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been omitted accordingly.

The unaudited interim financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Interim results are not necessarily indicative of the results that may be expected for the full year. Certain percentages herein may not sum or recalculate due to rounding.

Segment Reporting

The Company has a single operating segment, the property and casualty insurance business. The property and casualty insurance business generates revenues primarily from net earned premiums, commission income, and net investment income.

The Chief Operating Decision Maker (“CODM”) is the Company’s Chief Executive Officer. The significant segment expenses provided to the CODM are consistent with the categories shown in the Company’s unaudited interim condensed consolidated statements of operations and comprehensive income (loss) and there are no other segment expenses at a more disaggregated level used by the CODM. The CODM reviews the Company’s net income as reported in the Company’s unaudited interim condensed consolidated statements of operations and comprehensive income (loss), which is the primary measure of segment profit and loss. The CODM reviews this measure to monitor budget versus actual results and in competitive analysis by benchmarking to the Company’s competitors. The budgeted versus actual results analysis along with the competitive analysis are used to make resource allocation decisions. While the Company’s CODM also reviews the revenue streams attributable to individual lines of business, operations are managed, resources are allocated, and financial performance is evaluated on a consolidated basis. The measure of segment assets is reported in the Company’s unaudited interim condensed consolidated balance sheet as total consolidated assets.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ significantly from those estimates.

Significant items subject to such estimates and assumptions include, but are not limited to, losses and loss adjustment expense (“LAE”) reserves, provision for commission slide and cancellations, reinsurance recoverable on paid and unpaid losses and LAE, the fair values of investments, stock-based awards, acquired intangible assets, valuation allowance on deferred tax assets, uncertain tax positions, and revenue recognition. The Company evaluates these estimates on an ongoing basis. These estimates are informed by experience and other assumptions that the Company believes are reasonable under the circumstances.

Cash, Cash Equivalents, and Restricted Cash

Cash consists of cash on deposit. The Company considers all highly liquid securities readily convertible to cash, that mature within three months or less from the original date of purchase to be cash equivalents. This includes money market funds, commercial paper, U.S. government and agency securities, and other securities. The Company’s restricted cash relates to cash restricted to support collateral to insurers and fiduciary assets. Restricted cash includes fiduciary assets of $13.5 million and $28.7 million as of September 30, 2026 and December 31, 2025, respectively.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs.

In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This guidance provides a practical expedient that entities may elect when estimating expected credit losses for current accounts receivable and current contract assets arising from ASC 606 transactions, allowing entities to assume that conditions as of the balance sheet date remain unchanged over the life of the asset. ASU 2025-05 is effective for annual periods beginning after December 15, 2025, with early adoption permitted. The Company adopted ASU 2025-05 effective January 1, 2026 and elected the practical expedient. The adoption did not have a material impact on the unaudited interim condensed consolidated financial statements.

ASUs issued but not yet adopted

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses, which requires additional disclosure of the nature of expenses included in the income statement in response to longstanding requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The effective date of ASU No. 2024-03, as clarified by ASU No. 2025-01, is described below.

In January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Clarifying the Effective Date, clarifying the interim reporting date when an entity must adopt ASU No. 2024-03. According to ASU No. 2025-01, ASU No. 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. The Company is currently assessing the impact of ASU No. 2024-03 and ASU No. 2025-01 on the Company’s consolidated financial statements and notes to the consolidated financial statements.

In September 2025, the FASB issued ASU No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which amends guidance related to the accounting for internal-use software development costs. The amendments are intended to modernize the recognition and capitalization framework to reflect current software development practices, including iterative and agile methodologies, by removing references to “development stages.” It also clarifies the criteria for capitalization, which begins when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. This ASU is effective for annual periods beginning after December 15, 2027, and interim periods within those annual periods. Early adoption is permitted. The Company is currently assessing the impact of the ASU on the Company’s unaudited interim condensed consolidated financial statements and notes to the consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This ASU is intended to improve the navigability of guidance in ASC 270, Interim Reporting, and clarify when it applies. The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods. This ASU is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, and permits prospective or full retrospective adoption. The Company is currently assessing the impact of the ASU on the Company’s unaudited interim condensed consolidated financial statements and notes to the consolidated financial statements.

In December 2025, the FASB issued ASU No. 2025-12, Codification Improvements, which addresses thirty-three items, representing the changes to the Codification that (1) clarify, (2) correct errors, or (3) make minor improvements. Generally, the amendments in this Update are not intended to result in significant changes for most entities. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within those annual periods. The adoption method of this ASU may vary, on an issue-by-issue basis. Early adoption is permitted. The Company is currently assessing the impact of the ASU on the Company’s unaudited interim condensed consolidated financial statements and notes to the consolidated financial statements, but does not expect this standard to have a material impact on its financial statements.

2. Investments

The amortized cost and fair value of fixed maturities securities and short-term investments are as follows:

The following tables present the gross unrealized losses and related fair values for the Company’s investments in available-for-sale debt securities and short-term investments, grouped by duration of time in a continuous unrealized loss position as of September 30, 2026, and December 31, 2025:

The Company has determined that unrealized losses as of September 30, 2026 and December 31, 2025 resulted from the interest rate environment, rather than a deterioration of the creditworthiness of the issuers. Therefore, an allowance for credit losses was not necessary as it is more likely than not that the Company will not be required to sell the investments before the recovery of the amortized cost basis or until maturity. As of September 30, 2026, none of the Company’s fixed maturity portfolio was unrated or rated below investment grade.

The amortized cost and fair value of fixed maturities securities by contractual maturity are as follows:

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

Net realized gains and losses on fixed maturity securities were insignificant for the three and nine months ended September 30, 2026 and 2025.

The Company’s net investment income is comprised of the following:

Pursuant to certain regulatory requirements, the Company is required to hold assets on deposit with various state insurance departments for the benefit of policyholders. These special deposits are included in cash and cash equivalents, fixed maturities, or short-term investments on the unaudited interim condensed consolidated balance sheets. The carrying value of securities on deposit with state regulatory authorities total $9.9 million and $13.3 million as of September 30, 2026 and December 31, 2025, respectively.

3. Fair Value Measurement

When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions, and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

•Level 1 — Quoted prices in active markets for identical assets or liabilities that are publicly accessible at the measurement date.

•Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3 — Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The following table summarizes the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis:

The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels at the end of each reporting period. There were no transfers between levels in the fair value hierarchy during the nine months ended September 30, 2026.

Non-Recurring Fair Value Measurements

The Company has an approximately 19% ownership stake in First Connect Insurance Services (“First Connect”), a non-public company. The Company estimates the fair value on a non-recurring basis using the fair value of First Connect’s common stock, as applicable. Because of the nature of the unobservable inputs, the Company classifies this retained interest as Level 3 in the fair value hierarchy. The fair value of the Company’s investment was $4.5 million as of September 30, 2026 and December 31, 2025, and included in other assets on the unaudited interim condensed consolidated balance sheets.

4. Intangible Assets

Amortization expense related to intangible assets for the three months ended September 30, 2026 and 2025 was $0.3 million and $0.2 million, respectively, and for the nine months ended September 30, 2026 and 2025 was $0.7 million and $1.5 million, respectively. The amortization expense is primarily included in sales and marketing expenses and general and administrative expenses on the unaudited interim condensed consolidated statements of operations and comprehensive income (loss).

5. Capitalized Internal Use Software

Amortization expense related to capitalized internal use software for the three months ended September 30, 2026 and 2025 was $4.3 million and $4.2 million, and for the nine months ended September 30, 2026 and 2025 was $13.0 million and $12.9 million, respectively. The amortization expense is included in insurance related expenses on the unaudited interim condensed consolidated statements of operations and comprehensive income (loss).

6. Other Assets

Policy acquisition costs deferred, net for the three months ended September 30, 2026 and 2025 were $26.9 million and $19.0 million, respectively, and for the nine months ended September 30, 2026 and 2025 were $62.6 million and $56.6 million, respectively. The Company amortized deferred policy acquisition costs of $18.8 million and $12.3 million for the three months ended September 30, 2026 and 2025, respectively, and for the nine months ended September 30, 2026 and 2025 amortized $46.8 million and $39.2 million, respectively.

7. Accrued Expenses and Other Liabilities

8. Surplus Note

The Company issued a surplus note on June 2, 2025 in the amount of $50.0 million with a fixed interest rate of 9.5% for a term of 15 years. The surplus note is callable by the Company in 7 years from the issuance date. Interest on the outstanding principal is payable on September 1 and March 1 every year. Payment of principal and interest requires regulatory approval before such payment may be made. The Company paid $4.8 million in interest for the nine months ended September 30, 2026.

The Company’s surplus note is recorded at its carrying value net of unamortized debt issuance costs. The estimated fair value of the surplus note as of September 30, 2026 was $46.9 million, and is classified as Level 3 within the fair value hierarchy. The surplus note’s fair value is estimated using a discounted cash flow technique with a rate constructed of a duration-matched risk-free anchor plus credit and illiquidity spread.

9. Losses and Loss Adjustment Expense Reserves

The reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses, net of reinsurance is summarized as follows:

The gross losses and LAE reserve is included in losses and loss adjustment expenses and the reinsurance recoverables are included in reinsurance recoverable on paid and unpaid losses and LAE on the unaudited interim condensed consolidated balance sheets.

Prior year loss development occurs when actual losses incurred vary from the Company’s previously estimated losses, which are established through the Company’s losses and LAE reserve estimate processes.

Net incurred losses and LAE experienced favorable prior years development of $4.6 million and $10.6 million for the nine months ended September 30, 2026 and 2025, respectively. The prior period development for the nine months ended September 30, 2026 of $4.6 million includes a $2.6 million gain from a reinsurance commutation, as well as $2.0 million of favorable net loss development from catastrophe reserves relating to the Company’s property lines, primarily from accident years 2023 and 2024. These changes are primarily a result of ongoing analysis of claims emergence patterns and loss trends.

The prior period development for the nine months ended September 30, 2025 of $10.6 million was driven primarily by favorable net loss development relating to the 2024 and prior accident years, resulting in a net release of $8.2 million from attritional reserves and $2.4 million from catastrophe reserves. These changes are primarily a result of ongoing analysis of claims emergence patterns and loss trends.

10. Reinsurance

The Company maintains a comprehensive reinsurance program to manage risk exposure, reduce earnings volatility, and safeguard capital. By ceding a portion of its underwriting risk to highly rated reinsurers and alternative capital providers, the Company limits the financial impact of catastrophe events and large loss activity. Nevertheless, the Company remains ultimately responsible for policyholder claims should a reinsurer fail to perform.

The Company’s reinsurance strategy includes a mix of quota share and excess of loss (“XOL”) structures, alongside collateralized protection through catastrophe bonds. The Company works with reinsurers rated “A-” (Excellent) or better by A.M. Best or require appropriate collateral. Contracts often include provisions allowing for replacement of reinsurers whose financial condition deteriorates.

The Company’s catastrophe reinsurance program supports property risks underwritten by the Company on behalf of the Company’s MGA and third-party MGAs. These risks are protected mainly by a corporate level group catastrophe XOL (the “Group Cat”) and in some cases by program-specific XOL treaties, catastrophe bonds, and quota share reinsurance. The Company is also protected by participation in the Florida Hurricane Catastrophe Fund (“FHCF”). This catastrophe reinsurance structure is designed to provide protection against severe loss events across the portfolio. Effective June 1, 2026, the catastrophe reinsurance program has an occurrence limit of $512.9 million and an aggregate limit of $776.9 million.

Hippo’s 2026 program, established in the second quarter of 2026, reflects a shift in the way the Company purchases catastrophe reinsurance. The Company consolidated multiple program level XOL contracts into a single Group Cat structure. The new structure also incorporates the previous corporate catastrophe cover. The Group Cat covers all catastrophe exposed business written by the Company and attaches after inuring any program specific reinsurance, the FHCF, and the catastrophe bonds.

The change to portfolio level management of the Company’s reinsurance program allowed the Company to place a whole account quota share that provides coverage for both property and casualty programs.

The whole account quota share was a strategic reinsurance program placed June 1, 2026. The contract covers all lines of business, including both property as well as casualty, for which the Company has a retention at least equal to the reinsurance participation. This aligns the Company’s interests with that of the reinsurer. While the whole account quota share provides some property catastrophe relief below the attachment of the Group Cat, it was mainly placed to increase future growth optionality and manage the business on a portfolio basis.

For business written by the Company’s MGA, the Company strategically retains a significant level of risk, reflecting the Company’s confidence in the portfolio’s underwriting performance. The business written by the Company’s MGA is primarily covered by catastrophe XOL protection.

The Company also utilizes collateralized reinsurance through Mountain Re Ltd., a Bermuda-based special purpose insurer. The catastrophe bonds issued through Mountain Re Ltd. provide multi-year per occurrence coverage for a range of perils, including hurricane and wildfire, for business written through the Company’s MGA.

The following tables reflect amounts affecting the unaudited interim condensed consolidated statements of operations and comprehensive income (loss) for reinsurance as of and for the three and nine months ended September 30, 2026, and 2025.

As of September 30, 2026 and December 31, 2025, a provision for sliding scale commissions of $50.3 million and $36.0 million, respectively, is included in provision for commission on the unaudited interim condensed consolidated balance sheets.

As of September 30, 2026 and December 31, 2025, a receivable for sliding scale commissions of $70.0 million and $37.6 million, respectively, is included in ceding commissions receivable on the unaudited interim condensed consolidated balance sheets.

As of September 30, 2026 and December 31, 2025, a provision for loss participation features of $16.1 million and $17.4 million, respectively, was recorded as a contra-asset in reinsurance recoverable on the unaudited interim condensed consolidated balance sheets.

11. Geographical Breakdown of Gross Written Premium

Gross written premium by state is as follows:

12. Commitments and Contingencies

Purchase Commitments

As of September 30, 2026, the Company has total minimum purchase commitments, which must be made during the next three years, of $3.2 million.

Legal Proceedings

From time to time, the Company may become involved in litigation or other legal proceedings in the ordinary course of business, including claims from policyholders. The Company does not believe it is a party to any pending litigation or proceedings that are likely to have a material adverse effect on its business, financial condition, or results of operations.

13. Stockholders’ Equity

Common Stock

The Company’s common stock trades on the New York Stock Exchange (“NYSE”) under the ticker symbol “HIPO”. Pursuant to its Certificate of Incorporation, the Company is authorized to issue 80 million shares of common stock, with a par value of $0.0001 per share. Each share of common stock is entitled toone vote. The holders of the common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors. No dividends have been declared or paid since inception.

Stock-Based Compensation Plans

The Company maintains equity compensation plans adopted in 2019 and 2021 (the “plans”). The material terms of the plans were previously disclosed in the Company’s Annual Report on Form 10-K. There have been no material changes to the plans during the current fiscal year.

Stock Options

The following table summarizes option activity under the plans:

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2026 and 2025 was $1.2 million and $4.6 million, respectively, and is calculated based on the difference between the exercise price and the fair value of the Company’s common stock as of the exercise date. There is no unrecognized compensation cost as of September 30, 2026 related to stock options.

Restricted Stock Units and Performance Stock Units

The Company grants service-based RSUs and performance-based RSUs (“PSUs”) as part of the Company’s equity compensation plans. The Company measures RSU and PSU expense for awards granted based on the estimated fair value of those awards at the grant date. To estimate the fair value of PSUs containing a market condition, the Company used the Monte Carlo valuation model. The fair value of all other awards is based on the closing price of the Company’s common stock as reported on the NYSE on the date of grant. The RSUs generally vest over a period oftwo tofour years. The PSUs vest based on the level of achievement of the performance goals and continued employment with the Company over aone- tofour-year performance period.

During the nine months ended September 30, 2026, the Company granted PSUs to certain executives of the Company where vesting is based on the Company’s internal financial measures over athree-year period. Between 0% and 100% of the granted amount may vest based on the level of achievement of the performance goals and continued employment with the Company. Total compensation expense at the grant date assuming 100% achievement is $3.2 million.

During the nine months ended September 30, 2026, the Company also granted PSUs to certain executives of the Company where vesting is based on the Company’s total shareholder return (“TSR”) relative to a peer group over athree-year period. Between 0% and 100% of the target shares may vest based on performance. The awards are classified as equity and were valued on the grant date using the Monte Carlo simulation. Expense is recognized over the service period regardless of TSR outcome, provided continued employment. The weighted-average grant-date fair values ranged between $20.21 and $26.66 per unit, depending on the grant date. Total compensation expense at the grant date is $2.5 million.

During the nine months ended September 30, 2025, the Company granted PSUs to its CEO. Vesting is based on the Company’s TSR relative to a peer group over athree-year period. Between 0% and 100% of the target shares may vest based on performance. The awards are classified as equity and were valued on the grant date using the Monte Carlo simulation. Expense is recognized over the service period regardless of TSR outcome, provided continued employment. The weighted-average grant-date fair value was $24.08 per unit. Total compensation expense at the grant date is $1.0 million.

Stock-based compensation expense for RSUs is recognized based on a straight-line basis over the employee requisite service period. Stock-based compensation expense for PSUs is recognized on a graded accelerated basis over the employee requisite service period. The Company accounts for forfeitures as they occur.

The following table summarizes the RSU and PSU activity for the nine months ended September 30, 2026:

Total unrecognized compensation cost related to unvested RSUs and PSUs is $34.2 million as of September 30, 2026, and it is expected to be recognized over a weighted-average period of 2 years.

2021 Employee Stock Purchase Plan

The Company adopted the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which is designed to allow eligible employees of the Company to purchase shares of the Company’s common stock with their accumulated payroll deductions at a price equal to 85% of the lesser of the fair market value on the first business day of the offering period or on the designated purchase date of the offering period, up to a maximum purchase amount of $25,000 during the calendar year. The 2021 ESPP offers asix-month look-back feature as well as an automatic reset feature that provides for an offering period to be reset to a new lower-priced offering if the offering price of the new offering period is less than that of the current offering period. During the nine months ended September 30, 2026 and 2025,45,861 and 88,878 shares were issued under the 2021 ESPP, respectively. In addition, the number of shares available for issuance under the 2021 ESPP is increased annually on January 1 of each calendar year ending in 2031, by an amount equal to the lesser of (i)one percent of the shares outstanding (on a converted basis) on the last day of the immediately preceding fiscal year and (ii) such number of shares as may be determined by the board of directors.

Stock-Based Compensation

Total stock-based compensation expense, classified in the accompanying unaudited interim condensed consolidated statements of operations and comprehensive income (loss) was as follows:

Share Repurchases

As of September 30, 2026, $18.1 million of common stock remains available for repurchase. Shares repurchased by the Company are accounted for when the transaction is settled. During the nine months ended September 30, 2026, there were no share repurchases.

Warrants

The Company’s warrants (the “Warrants”), issued in November 2020 and delisted from the New York Stock Exchange in September 2024, expired on August 2, 2026. The material terms of the Warrants were previously disclosed in the Company’s Annual Report on Form 10-K.

14. Income Taxes

The consolidated effective tax rate was 0.7% and 0.04% for the three months ended September 30, 2026 and 2025, respectively. The consolidated effective tax rate was 3.9% and (0.2)% for the nine months ended September 30, 2026 and 2025, respectively. The difference between the rate for the three and nine months ended September 30, 2026 and 2025 and the U.S. federal income tax rate of 21% was due primarily to a full valuation allowance against the Company’s net deferred tax assets, partially offset by state income taxes.

As of September 30, 2026 and December 31, 2025, the Company has $5.6 million and $5.2 million of unrecognized tax benefits, respectively, fully offset by a valuation allowance. No material interest or penalties were incurred during the nine months ended September 30, 2026 and 2025.

15. Net Income Per Share Attributable to Common Stockholders

Net income per share attributable to common stockholders was computed as follows:

The potential shares of common stock that were excluded from the computation of diluted net income per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows: