Shares of the home insurance company Hippo Holdings (HIPO -0.30%) had jumped nearly 34% as of 11:22 a.m. ET today after the company announced earnings results for the first quarter of 2022.
Hippo reported a loss per share of $0.12 on total revenue of $24.5 million, both numbers that missed analyst estimates for the quarter.
However, the company's gross loss ratio, which looks at losses paid out by the company expressed as a percentage of premiums earned, fell to 76%, down from 198% in the first quarter of 2021 and the best gross loss ratio the company has produced since going public. Total generated premiums in force also hit $634 million the quarter, up significantly year over year.
"We achieved our Q1'22 loss ratio despite 19 points of catastrophe loss events (as defined by PCS) stemming from winter storms across the US," Hippo's Founder and CEO Assaf Wand said in a letter to shareholders. PCS refers to property claims services.
He added: "As we've discussed in our previous letters, as we add greater geographic balance and scale to our book of business, the impact of individual events should lessen. The additions of New York and other states will add significantly to this balance."
Hippo maintained its full-year revenue guidance of at least $140 million of revenue and also expects the full-year gross loss ratio to come in below 100%, which would be a significant improvement compared to 138% in 2021.
Despite missing analyst estimates, all signs point to improvement with a much better loss ratio and continued growth in insurance premiums, which explains the jump in the stock today.