Spinnaker Insurance Company, the well-known program and fronting service specialist that was founded in 2015 by ex-Arch Re Ingrey family members, has been sold to insurtech Hippo.
Hippo is a high-growth, technology focused insurance company that aims to transform home insurance and ownership completely, with the use of smart home technology and data.
It turns out that Hippo had already been working with Spinnaker as its fronting provider, enabling the sale of the insurtech’s policies across a number of the United States, given Spinnaker’s 50 state license.
Spinnaker, which is rated A- (Excellent) by A.M. Best Company, will join Hippo’s family of companies and become its dedicated insurance carrier.
Spinnaker has been acting as insurtech Hippo’s largest carrier platform since 2017, with Spinnaker-backed Hippo insurance products currently available in more than 18 states.
The acquisition “showcases the alignment between the two companies and the strength of the partnership built over the last 3 years,” Hippo said.
Adding that, “This strategic move will allow Hippo to expand the geographical reach of its modern home insurance policies which also include smart home monitoring kits.”
“Bringing Spinnaker into the Hippo family is a natural next step in growing our proactive home insurance offering,” explained Rick McCathron, Chief Insurance Officer at Hippo. “Spinnaker knows the complexities of our industry, mirrors our same standards for technology innovation and customer experience and has continued to meet, oftentimes exceeding, our expectations over the years. We’re proud of the progress we’ve made as partners and look forward to closing the acquisition.”
The deal does not see Spinnaker shuttering its services to other capacity providers and underwriters though and it will continue to offer services to the likes of ILS capacity. As we’ve written before, Spinnaker has scaled its operations with the support of the insurance-linked securities (ILS) space in part, as well as other capacity providers it works with.
Hippo Insurance will continue to operate as a managing general agent, with now-affiliate Spinnaker underwriting a portion of its premiums and the rest being underwritten by other carrier partners.
Spinnaker will operate independently, albeit under the Hippo umbrella.
This will allow Spinnaker to maintain its position as a best-in-class program and fronting company, working with providers of insurance and reinsurance capital.
Spinnaker will continue to service a diverse portfolio of top-quality program administrators and drive the growth of its value-added program platform, some of which is likely to continue to be backed by ILS sources reinsurance capital.
“Spinnaker is excited to join the Hippo family. Since launching in 2015, Spinnaker has pioneered the concept of value-added fronting: working to create products that benefit the policyholder, the producer, the insurer, and the reinsurer,” commented Spinnaker Chief Executive Officer Dave Ingrey.
“We know Hippo shares these ideals and we appreciate their relentless pursuit of innovative ways to grow their value proposition for all their customers. Spinnaker is very excited that as a result of this transaction, we can continue to transform the customer experience in ways that will help both companies, as well as all our current and future business partners,” Ingrey added.
The acquisition of Spinnaker by Hippo is is expected to close in the third quarter of 2020.