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January 22, 2019

Interview: Richard McCathron

Hippo's CIO talks about the future of home insurance

Key Takeaway
Moving home insurance into the 21st century means

Home insurance doesn't at first glance seem like the focus for 21st century technology advances.  In fact, many home insurance policies were written in the 1960s and were designed to cover items now considered antiquated. "Like fur coats, pewter bowls, gold bullion, stock certificates, and even the maintenance of crypts,” laughs Richard McCathron, head of Hippo Insurance, in an interview with Oliver Wyman’s Paul Ricard at Insuretech Connect 2018 in Las Vegas this past fall.

Policies written by Hippo Insurance, which operates in about a dozen US states, provide coverage for the things now recognizable in the modern home / office environment.  Their policies cover home offices in excess of the typical $2,000 for electronic equipment and even include the repair or replacement of large appliances and water and HVAC systems and electronic charging stations.  

And the system is proactive in the way it thinks about coverage.  Take natural disasters.  If a home needs to be rebuilt after a catastrophic event, like a storm, the coverage will increase by an additional 25%, reflecting the fact that there is likely to be labor and supply shortages. Hippo is also encouraging its customers to use sensors in their home, so problems like water leaks can be detected early on and fixed before the damage becomes much more intensive.

Richard points to Hippo’s use of data, explaining that the company not only asks all the traditional insurance policy questions, but also goes a step further:  rather than get this information from customers, it goes to third party vendors, like Zillow. That, he says, creates better underwriting results, because a third party verifies the information.  

Powered by this information the system allows consumers to get a quote in less than a minute and buy a policy in less than five minutes.  

As for InsureTech Connect, Richard describes it as the “preeminent event” within the insurance industry with underwriters, technologist, carriers, reinsurance and claims companies in attendance. Even incumbent players, McCathron says, are looking for ways to improve their business and are excitedly embracing Insurtech.

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