InsurTech Hippo Holdings said it has “initiated an organizational realignment” by laying off about 120 employees, or 20 percent of its workforce.
The company said in a filing with the U.S. Securities and Exchange Commission on Oct. 26 that it expects to record charges of about $2.2 million to $2.7 million for severance, benefits and related costs as a result of the layoffs.
Hippo said most of the layoffs will take effect Nov. 1, a day prior to its scheduled release of financial results for the third quarter. For the second quarter, the Palo Alto, Calif.-based home insurer reported a net loss of $105.2 million compared to a loss of $72 million during the same time a year ago. As of June 30, Hippo recorded a net loss of $173.4 million.
Last year within the third quarter, Hippo laid off about 10 percent of its staff, or about 70 employees.
Early last month, Hippo CEO Rick McCathron said a nationwide pause in writing new business on Hippo paper, which was put in place the prior month, would slowly be lifted. Speaking at a Keefe, Bruyette & Woods Insurance conference, McCathron said the insurer would “start turning the spigot back on in a very selective way in areas in which we think that we are priced adequately.”
But also last month a shareholder group sent a letter to members of Hippo’s board, calling for a strategic review. The shareholder group, one of the company’s largest, said Hippo has reported “abysmal financial results and operated in an unsustainable manner” since becoming public in 2021.
The news out of Hippo is the latest among insurers announcing layoffs. Liberty Mutual announced last week it was laying off 850 employees. Earlier this month, GEICO announced it was laying off 2,000 associates. American Family Insurance has also recently confirmed staff reductions, following news in August from Farmers Insurance that it would let go 11 percent of its workforce.
In the InsurTech space, Branch Insurance, Corvus Insurance and Pie Insurance announced layoffs earlier this year. Last year, Thimble, NEXT, Lemonade, and Root were among other InsurTechs trimming their workforces.