As an insurance industry veteran, I’ve had a front row seat to watch many insurtechs adopt growth assumptions borrowed from industries where scale eventually delivers profitability. Insurance doesn’t work that way. Overseeing a $100m turnaround taught me how businesses are learning the wrong lessons – not least their adoption of Silicon Valley’s philosophy of growth-above-all-else.
Let’s start with my industry. In insurance, the rise of digital challengers hasn’t brought greater prosperity; it’s distracted parts of the industry from the fundamentals that make insurance sustainable. Premiums are through the roof, in some cases up 70% in just the last five years. Insurers are retreating from high-risk zones across the U.S., leaving widening coverage gaps.
We’re not the only industry seduced by the growth mindset. Recent history is full of businesses that mistook expansion for resilience and discovered too late that scale alone doesn’t fix weak fundamentals. Hippo had to confront that reality too.
When I became CEO in June 2022, Hippo was entering one of the toughest periods in its history. The low point came in Q3 2023. From there through the end of 2025, we helped drive a turnaround from a $41 million net loss to $58 million in net income. I never lost confidence because, over 30+ years in insurance, I’d seen similar cycles before. Insurance is inherently cyclical. Markets change, assumptions break down, and businesses have to decide whether they adapt or keep relying on conditions that no longer exist.
Our turnaround didn’t come from a single breakthrough or dramatic cost-cutting exercise. It came from recognizing that assumptions we’d relied on – such as stable risk, predictable loss patterns, and the belief that growth would eventually deliver profitability – no longer held.
The reason those assumptions stopped working is simple: the underlying economics changed. Climate volatility increased, losses became harder to predict, and the cost of absorbing risk rose. Businesses built for stable conditions suddenly found themselves operating in a different reality.
As climate-related losses rose, insurers had to increase rates simply to break even, while the cost of attracting the capital needed to absorb risk climbed too. That dynamic pushed premiums higher and affordability lower. Setbacks were often blamed on “extreme” weather events, but the deeper issue was some had stopped doing the hard work of pricing risk accurately and spreading it intelligently.
Too many of our competitors seem to forget that we’re in the risk business; we simply can’t afford to ignore these signals. In a market where risk is compounding and less predictable, growth can become the fastest way to fail.
Those choices have real consequences. Insurers, including us, have paused new business, reduced exposure, and raised rates in some areas. Simply charging customers more may help insurers in the short term, but it doesn’t solve the underlying problem.
Long-term resilience requires investing upstream in prevention rather than continually paying for failure downstream. For this industry, that means building stronger homes, and having better mitigation, updated building standards, and improved insurance models designed around evolving climate risk.
This industry, like others, needs to become willing to make difficult decisions to protect long-term resilience. Sometimes you have to cut off the arm to save the body. The good news is that, if you do it right, the arm grows back.
That philosophy shaped our decisions, ranging from pausing new business in some areas, reducing exposure in concentrated catastrophe-prone regions, and resisting pressure to chase growth, to selling our homebuilder distribution network in 2025. We doubled down on what we do best — underwriting and risk selection — while expanding access to the new home market from six homebuilders to more than 50.
What looked to some like retrenchment was, in reality, a deliberate bet on long-term resilience over short-term momentum. But discipline alone wasn’t enough. We also needed the ability to adjust faster than traditional insurers typically can.
And this is where the insurance industry can learn from the tech sector. We couldn’t have turned Hippo around without the data and analytics that allowed us to adjust faster. That meant advanced underwriting, using external data (e.g. property-level insights and environmental risk data); continuous re-underwriting at renewal; and better segmentation of risk across our own balance sheet and partners.
Rather than chasing growth, businesses across a range of industries should pursue nimbleness. We experimented constantly: tweaking prices, re-underwriting, or reacting to shifting geographic exposure. In fact, we adjusted our plan eight times in under two years, which in the insurance industry is practically heresy. Those adjustments kept us on track.
Silicon Valley still has much to teach other industries, particularly around speed, experimentation, and calculated risk-taking. But in volatile markets, resilience, precision, and adaptability increasingly determine who succeeds. Growth still matters. The difference is that sustainable growth starts with discipline.
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