Hippo Holdings Inc (HIPO) 2024 Q3 法說會逐字稿

Hello, and welcome to the Hippo Holdings third Quarter 2024 Earnings Call. My name is Maxine, and I'll be coordinating the call today. (Operator Instructions). I will now hand over to Mark Olson, Director of Communications, to begin. Mark, please go ahead when you are ready.

您好，歡迎參加 Hippo Holdings 2024 年第三季財報電話會議。我叫 Maxine，今天我將負責協調電話會議。（操作員指令）。現在我將把發言權交給通訊主管馬克‧奧爾森 (Mark Olson)。馬克，當你準備好了，請繼續。

Thank you, operator. Good morning and thank you for joining Hippo's 2024 third Quarter earnings call. Earlier today, Hippo issued a shareholder letter announcing its Q3 results, which is available at investors.hippo.com. Leading today's discussion will be Hippo President and Chief Executive Officer, Rick McCathron and Chief Financial Officer, Stewart Ellis. Following management's prepared remarks, we will open up the call to questions.

謝謝您，接線生。早安，感謝您參加 Hippo 2024 年第三季財報電話會議。今天早些時候，Hippo 發布了一封給股東的信，宣布其第三季業績，可在 investor.hippo.com 上查閱。今天的討論將由 Hippo 總裁兼執行長 Rick McCathron 和財務長 Stewart Ellis 主持。在管理階層發表完準備好的發言後，我們將開始提問。

Before we begin, we would like to remind you that our discussion will contain predictions, expectations, forward-looking statements and other information about our business that are based on management's current expectations as of the date of this presentation. Forward-looking statements include, but are not limited to, Hippo's expectations or predictions of financial and business performance and conditions and competitive and industry outlook. Forward-looking statements are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from historical results and/or from our forecast, including those set forth in Hippo's Form 10-Q filed today and our Form 10-K filed earlier this year. For more information, please refer to the risks, uncertainties and other factors discussed in Hippo's SEC filings, in particular, in the section entitled Risk Factors in our Form 10-Qs and Form 10-K. All cautionary statements are applicable to any forward-looking statements we make whenever they appear.

在開始之前，我們想提醒您，我們的討論將包含有關我們業務的預測、期望、前瞻性陳述和其他信息，這些信息基於管理層截至本報告發布之日的當前預期。前瞻性陳述包括但不限於 Hippo 對財務和業務表現和狀況以及競爭和行業前景的預期或預測。前瞻性陳述受風險、不確定性和其他因素的影響，這些因素可能導致我們的實際結果與歷史結果和/或我們的預測有重大差異，包括 Hippo 今天提交的 10-Q 表和我們今年稍早提交的 10-K 表中所述的結果。如需了解更多信息，請參閱 Hippo 向 SEC 提交的文件中討論的風險、不確定性和其他因素，特別是我們的 10-Q 表和 10-K 表中題為“風險因素”的部分。所有警告聲明均適用於我們所做的任何前瞻性陳述。

You should carefully consider the risks and uncertainties and other factors discussed in Hippo's SEC filings. Do not place undue reliance on forward-looking statements as Hippo is under no obligation and expressly disclaims any responsibility for updating, offering or otherwise revising any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. During this conference call, we will refer to non-GAAP financial measures such as total generated premium and adjusted EBITDA. Our GAAP results and the description of our non-GAAP financial measures with a full reconciliation to GAAP can be found in the third quarter 2024 shareholder letter, which has been furnished to the SEC and is available on our website.

您應該仔細考慮 Hippo 的 SEC 文件中討論的風險、不確定性和其他因素。請勿過度依賴前瞻性陳述，因為 Hippo 不承擔任何義務並明確表示不承擔更新、提供或以其他方式修改任何前瞻性陳述的責任，無論是由於新資訊、未來事件或其他原因，除非法律另有規定。在本次電話會議中，我們將參考非公認會計準則財務指標，例如總保費和調整後的 EBITDA。我們的 GAAP 結果和非 GAAP 財務指標的描述以及與 GAAP 的完整對帳可在 2024 年第三季股東信中找到，該信已提供給 SEC 並可在我們的網站上查閱。

And with that, I will turn the call over to Rick McCathron, our President and CEO.

接下來，我將把電話轉給我們的總裁兼執行長 Rick McCathron。

Thank you, Mark, and good morning, everyone. For the third quarter of 2024, we continued the positive momentum we've been building over the course of the year and made a significant step forward on our path to profitability. We also strengthened the foundation for growth in our New Homes channel. During the quarter, top-line premium and revenue continued to grow quickly, while we posted a Hippo bestever year-over-year improvement in our HHIP non-weather loss ratio. Our PCS loss results came in at expected levels despite an active hurricane season.

謝謝你，馬克，大家早安。2024 年第三季度，我們延續了今年以來的積極勢頭，在盈利的道路上邁出了重要一步。我們也加強了新房通路的成長基礎。在本季度，頂線保費和收入繼續快速增長，同時我們的 HHIP 非天氣損失率同比增長了 Hippo 有史以來最好的水平。儘管颶風季節活躍，但我們的 PCS 損失結果仍達到了預期水準。

And we delivered another quarter of improved operating leverage as the investments we've made to streamline our operations continued to pay off. As we've discussed previously, we believe we have the best platform to help buyers of newly built homes secure cost-effective insurance quickly and easily. Beyond the benefits to consumers, Hippo's New Homes program provides homebuilders access to a scalable, embedded insurance solution that streamlines the closing process for sales teams, lenders and homebuyers by automating the evidence of insurance process. In Q3, we expanded homebuilder access to the program in California, Florida and Texas, welcoming new builders Perry Homes and Van Daele to our roster of builder partners, with more additions to come in Q4. By year's end, we expect to be in a position to provide access to insurance for almost 50,000 new homes annually in these states through both our Hippo program and our panel of carrier partners. After the close of the quarter, Hippo sold a majority stake in its independent agent platform, First Connect Insurance Services, to Centana Growth Partners for approximately $48 million, with the opportunity to earn additional proceeds of up to $12 million if First Connect achieves certain performance targets.

由於我們為簡化營運而進行的投資持續獲得回報，我們又在一個季度中提高了營運槓桿。正如我們之前討論過的，我們相信我們擁有最好的平台，可以幫助新建住宅的買家快速、輕鬆地獲得具有成本效益的保險。除了為消費者帶來好處之外，Hippo 的新房屋計劃還為房屋建築商提供了可擴展的嵌入式保險解決方案，透過自動化保險證明流程簡化了銷售團隊、貸方和購屋者的成交流程。在第三季度，我們擴大了加州、佛羅裡達州和德克薩斯州的房屋建築商對該計劃的使用範圍，並歡迎新建築商 Perry Homes 和 Van Daele 加入我們的建築商合作夥伴名單，第四季度還將增加更多建築商。到今年年底，我們預計能夠透過我們的 Hippo 計劃和承運商合作夥伴小組每年為這些州近 50,000 套新房提供保險。本季結束後，Hippo 以約 4,800 萬美元的價格將其獨立代理平台 First Connect Insurance Services 的多數股權出售給 Centana Growth Partners，如果 First Connect 實現某些業績目標，則有機會獲得高達 1,200 萬美元的額外收益。

This transaction allows us to further increase focus on our core business while simultaneously freeing up First Connect to increase its level of investment to fulfill its potential as the premier independent agent distribution channel for carriers and MGAs. Hippo will continue to be an enthusiastic customer, carrier partner and minority shareholder in First Connect. The proceeds from the transaction further strengthen our cash position, and we have taken this as an opportunity to repurchase and retire some of our own shares. Over the past couple of years, we've been striking a balance between improving our efficiency and investing in our business to support future growth. The work our team has been doing is increasingly visible in our financial results, and I'm optimistic about what is to come.

此次交易使我們能夠進一步集中精力於核心業務，同時讓 First Connect 能夠增加投資水平，發揮其作為承運商和 MGAs 首要獨立代理分銷管道的潛力。Hippo 將繼續成為 First Connect 的熱心客戶、營運商合作夥伴和少數股東。交易所得進一步增強了我們的現金狀況，我們藉此機會回購並退出部分自己的股票。在過去幾年裡，我們一直在提高效率和投資業務以支持未來成長之間取得平衡。我們團隊所做的工作在我們的財務表現中越來越明顯，我對未來的發展充滿樂觀。

Now, I'd like to turn the call over to our Chief Financial Officer, Stewart Ellis, to walk through the highlights of our Q3 2024 financial results as well as our expectations for the future.

現在，我想將電話轉給我們的財務長 Stewart Ellis，介紹我們 2024 年第三季財務業績的亮點以及我們對未來的期望。

Thanks, Rick, and good morning, everyone. Our Q3 results illustrate the benefits of investments we've been making over the past several years. We've delivered strong top line growth and substantial improvement in our loss ratio and operating leverage. As I walk through the key lines of our P&L, I'll explain the drivers behind our results and how the benefits of the investments we've been making are now visible in the P&L. In Q3, TGP grew 21% year-over-year to $368 million.

謝謝，里克，大家早安。我們的第三季業績證明了我們過去幾年的投資成果。我們實現了強勁的營收成長，損失率和營運槓桿也大幅改善。當我介紹我們的損益表的關鍵部分時，我會解釋我們業績背後的驅動因素，以及我們所做的投資的收益如何在損益表中顯現出來。第三季度，TGP年增21%，達3.68億美元。

TGP in our Hippo Home Insurance Program segment declined 18% as a result of managing our exposure to high-CAT geographies, but this was more than offset by TGP growth in our Insurance-as-a-Service segment of 12% and 46% TGP growth in our Services segment. Our TGP mix continued to shift towards the areas of the business that are less exposed to underwriting risk and weather volatility. The collective premium from the Services and Insurance-as-a-Service segments was 81% of our total TGP this quarter, up from 74% a year ago. Revenue growth in Q3 again outpaced TGP growth, increasing 65% year-over-year to $95 million, up from $58 million in Q3 2023. Much like last quarter, the higher premium retention at HHIP and the volume increases in the Insurance-as-a-Service and Services segments were the primary drivers of the growth.

三峽工程由於管理我們對高 CAT 地區的風險敞口，我們的 Hippo 家庭保險計劃部門的 TGP 下降了 18%，但這被我們保險即服務部門的 TGP 增長 12% 和服務部門的 TGP 增長 46% 所抵消。我們的 TGP 組合繼續轉移到承保風險和天氣波動較小的業務領域。本季度，服務和保險即服務部門的總保費占我們總保費的 81%，高於去年同期的 74%。第三季的營收成長再次超過 TGP 成長，從 2023 年第三季的 5,800 萬美元年增 65% 至 9,500 萬美元。與上一季一樣，HHIP 的保費留存率提高以及保險即服務和服務部門的銷售增加是成長的主要驅動力。

As we have discussed previously, our increasing confidence in both the magnitude and the predictability of our loss ratio has enabled us to retain a greater share of the premium we write on our own balance sheet. As a result of this higher premium retention, net earned premium as a percentage of gross earned premium in our HHIP business rose to 75% in Q3, up from 23% a year ago like in previous quarters, Insurance-as-a-Service revenue growth was mostly driven by the premium growth from existing programs, augmented by slightly higher risk-retention with some of the programs. In our Services segment, revenue grew more slowly than TGP due to the continued mix shift from our agency, where we earn commissions on a gross basis, to our First Connect platform, where we take a percentage of the gross commissions paid by carriers to our agency customers and recognize revenue on a net basis. We will not see this effect in future quarters because following the sale of First Connect on October 29th, our agency will be the only driver of the Services segment's financials. Loss results in Q3 improved substantially year-over-year despite an active hurricane season.

正如我們之前所討論的，我們對損失率的幅度和可預測性的信心不斷增加，這使我們能夠在自己的資產負債表上保留更大份額的保費。由於保費留存率提高，我們 HHIP 業務中淨保費佔總保費的百分比在第三季度上升至 75%，與去年前幾季度一樣為 23%，保險即服務收入增長主要得益於現有計劃的保費增長，部分計劃的風險留存率略有提高。在我們的服務部門，收入成長速度低於 TGP，這是由於業務組合持續從我們的代理商（我們按總額賺取佣金）轉向我們的 First Connect 平台（我們從承運商向我們的代理商客戶支付的總佣金中抽取一定比例並按淨額確認收入）。我們不會在未來幾季看到這種影響，因為在 10 月 29 日出售 First Connect 之後，我們的代理商將成為服務部門財務的唯一推動力。儘管颶風季節活躍，但第三季的虧損結果比去年同期大幅改善。

HHIP PCS accident period loss ratio came in at 18%, an improvement of 20 percentage points quarter-over-quarter and an improvement of 7 percentage points versus Q3 of last year. Despite the significant improvement in our PCS results, the real star of the show this quarter was the improvement in our HHIP non-PCS accident period loss ratio, which improved an unprecedented 15 percentage point year-over-year to 52%. This improvement was driven by aggressive rate and underwriting actions across the portfolio as well as a favorable mix shift toward new homes, which generally experience lower non-weather losses than older homes. We achieved this improvement despite the shift at a portfolio level away from higher-CAT geographies, which, all things equal, would tend to raise the non-PCS loss ratio. The combination of year-over-year improvements in both weather and non-weather loss ratios drove a substantial improvement in our total HHIP accident period loss ratio, which improved by 22 percentage points to 70% from 92% in Q3 of last year.

HHIP PCS 事故期損失率為 18%，比上一季改善了 20 個百分點，比去年第三季改善了 7 個百分點。儘管我們的 PCS 結果有了顯著改善，但本季真正的亮點是我們的 HHIP 非 PCS 事故期損失率的改善，該比率同比前所未有的改善了 15 個百分點，達到 52%。這項改善得益於整個投資組合積極的利率和承保行動，以及向新房的有利組合轉變，新房的非天氣損失通常低於老房子。儘管在投資組合層面上，我們已從 CAT 較高的地區轉移，而在其他條件相同的情況下，這往往會提高非 PCS 損失率，但我們仍實現了這一改進。天氣和非天氣損失率的同比改善推動了我們的總 HHIP 事故期間損失率大幅改善，從去年第三季的 92% 改善了 22 個百分點至 70%。

This portfolio-level improvement, combined with the improvements to our reinsurance structure, drove an even larger improvement in our HHIP net loss ratio, which came in at 84% during the quarter, an improvement of 67 percentage points versus Q3 of last year. Excluding the benefits of reserve releases in Q3 of '23, this improvement would have been 126 percentage points. In Q3, we again delivered significant top line growth while simultaneously reducing our operating expenses both as a percentage of revenue and on an absolute dollar basis. Relative to Q3 of last year, our GAAP sales and marketing, technology and development and general and administrative expenses collectively declined by $17 million, a year-over-year decrease of 33%. When combined with the increases in our revenue over the same period, these costs fell from 89% of revenue in Q3 of last year to 36% of revenue this quarter.

投資組合層面的改善，加上我們再保險結構的改善，推動我們的 HHIP 淨損失率得到更大改善，本季達到 84%，比去年第三季改善了 67 個百分點。如果不考慮23年第三季釋放儲備金的好處，這增幅將達到126個百分點。在第三季度，我們再次實現了顯著的營收成長，同時降低了營運費用佔收入的百分比和絕對美元金額。與去年第三季相比，我們的 GAAP 銷售和行銷、技術和開發以及一般和行政費用總計下降了 1,700 萬美元，年減了 33%。與我們同期收入的成長相結合，這些成本從去年第三季營收的 89％ 下降到本季營收的 36％。

Q3 net loss came in at $8.5 million, a $45 million or 84% improvement versus Q3 of 2023. Compared to last quarter, our net loss improved by 79% or $32 million. The primary drivers of the year-over-year improvement were a 67 percentage point improvement in our HHIP net loss ratio, better operating leverage, continued growth in our businesses that are less susceptible to weather and underwriting volatility, an $8 million gain on the sale of a shell insurance carrier, and a $5 million reduction in stock-based compensation. Our Q3 adjusted EBITDA loss came in at $7.5 million, a $31 million or 81% improvement versus Q3 of 2023. And compared to last quarter, our adjusted EBITDA loss improved by 70% or $17 million.

第三季淨虧損為 850 萬美元，較 2023 年第三季減少 4,500 萬美元，成長 84%。與上一季相比，我們的淨虧損改善了 79%，即 3,200 萬美元。與去年同期相比，業績改善的主要推動因素包括：HHIP 淨虧損率提高了 67 個百分點、經營槓桿更高、業務持續增長（受天氣和承保波動影響較小）、出售空殼保險公司收益 800 萬美元、股票薪酬減少 500 萬美元。我們第三季的調整後 EBITDA 虧損為 750 萬美元，與 2023 年第三季相比改善了 3,100 萬美元，降幅為 81%。與上一季相比，我們的調整後 EBITDA 虧損改善了 70%，即 1,700 萬美元。

Q3 ending cash and investments increased quarter-over-quarter by $54 million to $545 million. This increase was driven primarily by higher collections from reinsurers, reducing the amounts outstanding that are owed to Hippo and the $8 million of proceeds from the sale of a shell insurance carrier, partially offset by the losses from operations. And now, 2 additional updates beyond our Q3 financials. After the end of the third quarter, on October 29th, we entered into an agreement with Centana Growth Partners to sell a majority of our shares in our independent agent platform, First Connect Insurance Services. As part of the agreement, Centana invested additional capital in First Connect to support its future growth, and Hippo realized cash proceeds of approximately $48 million, with an opportunity to earn up to an additional $12 million over the next few years if First Connect achieves certain performance targets.

第三季末現金和投資季增 5,400 萬美元，達到 5.45 億美元。這一增長主要得益於再保險公司收款增加，減少了欠 Hippo 的未償金額，以及出售空殼保險公司所得的 800 萬美元收益，但部分抵消了經營損失。現在，除了我們的第三季財務數據之外，還有 2 個額外更新。第三季結束後，10月29日，我們與Centana Growth Partners達成協議，出售我們在獨立代理平台First Connect Insurance Services的大部分股份。作為協議的一部分，Centana 向 First Connect 投入了額外的資本以支持其未來的發展，而 Hippo 實現了約 4800 萬美元的現金收益，如果 First Connect 實現某些績效目標，則有機會在未來幾年內額外賺取 1200 萬美元。

Hippo also retains a 19.2% stake in First Connect. This transaction allows us to further increase focus on our core business while simultaneously freeing up First Connect to use the incremental investment from Centana to increase its level of investment in its future growth. The proceeds from this transaction have further strengthened our cash position. After the First Connect transaction closed, Hippo used $15.6 million of the proceeds to repurchase and retire 957,242 or 3.8% of our total shares outstanding. This reduction in shares outstanding is reflected in the shares outstanding we reported today on the cover of our Form 10-Q.

Hippo也持有First Connect 19.2%的股份。此交易使我們能夠進一步集中精力於核心業務，同時讓 First Connect 能夠利用 Centana 的增量投資來增加對未來成長的投資水平。此次交易的收益進一步增強了我們的現金狀況。在 First Connect 交易結束後，Hippo 使用 1,560 萬美元的收益回購並註銷了 957,242 股或總流通股數的 3.8%。我們今天在 10-Q 表封面上報告的流通股數量反映了流通股數量的減少。

Turning now to our Q4 guidance. The removal of First Connect from Hippo's financials from the beginning of November will lower our expected Q4 TGP by approximately $50 million to $60 million and expected revenue by approximately $1.5 million to $1.8 million, but will have only a negligible impact on our expected net loss and adjusted EBITDA. Even with these effects and the expected impact of Hurricane Milton, we'd like to reiterate our previous Q4 guidance for revenue of $95 million to $99 million and adjusted EBITDA of positive $5 million to $6 million. And with that, operator, I'd now like to open the floor to questions.

現在談談我們的第四季指引。從 11 月初開始將 First Connect 從 Hippo 的財務報表中剔除，將導致我們預期的第四季度 TGP 減少約 5000 萬美元至 6000 萬美元，預期收入減少約 150 萬美元至 180 萬美元，但對我們預期的淨虧損和調整後的 EBITDA 的影響可以忽略不計。即使有這些影響以及颶風米爾頓的預期影響，我們仍想重申先前對第四季營收 9,500 萬至 9,900 萬美元以及調整後 EBITDA 500 萬至 600 萬美元的預期。接線員，現在我想開始回答問題。

(Operator Instructions)

（操作員指令）

Yaron Kinar, Jefferies.

傑富瑞的亞龍基納爾 (Yaron Kinar)。

Thank you. Good morning. So I want to start with the entry into California, Florida and Texas, homebuilders that will offer access to 50,000 new homes annually. Can you maybe offer us an equivalent kind of nationwide number?

謝謝。早安.因此，我想先介紹進入加州、佛羅裡達州和德州的情況，這些房屋建築商每年將提供 50,000 套新住宅。您能給我們提供一個全國範圍內同等的號碼嗎？

So, you're on, nice to hear from you. This is right, I would reclassify it not as an entry into California, Florida and Texas. We are already in California, Florida and Texas with our existing homebuilder partners. These are the additional homebuilder partners in those particular states. As of now, the homebuilders that we've publicly announced in this quarter, those are states that they are heavier in and concentrated more in, but we feel very good with both the quality of expected loss ratio from these builders and the diversification we have from other builders already on our platform and those that will be joining our platform in Q4. So we feel good that we're doubling down on our homebuilder channels in markets that we feel positive in.

那麼，您好，很高興收到您的來信。這是正確的，我不會將其重新歸類為加利福尼亞州、佛羅裡達州和德克薩斯州的入口。我們已經與現有的房屋建築商合作夥伴進軍加州、佛羅裡達州和德州。這些是這些特定州的額外房屋建築商合作夥伴。截至目前，我們在本季度公開宣布的房屋建築商是他們在這些州的業務較重且更集中，但我們對這些建築商的預期損失率質量以及我們平台上已有的其他建築商和將在第四季度加入我們平台的建築商的多樣化感到非常滿意。因此，我們很高興能夠在我們看好的市場加倍拓展我們的房屋建築商通路。

So if there are about, what, just over one million homes built annually currently in the United States, how many of those can you service today?

那麼，如果目前美國每年建造的房屋大約有 100 多萬套，您今天可以為其中多少套提供服務？

Yeah. We have access to approximately 200,000 of the new homes with our existing partners. Again, I'll reiterate that we have an active business development cycle with various partners at various stages in that cycle. I think the number is a little bit more than a million. I think on average, it's somewhere between one million and two million. And we anticipate closer to 1.5 million as the addressable market in 2025.

是的。我們與現有合作夥伴共同擁有約 20 萬套新房。我再次重申，我們與處於不同階段的不同合作夥伴有著積極的業務發展週期。我認為這個數字略多於一百萬。我認為平均金額在一百萬到兩百萬之間。我們預計 2025 年的目標市場規模將接近 150 萬。

Great. And maybe too early to say given a somewhat limited history here, but do you have any data points that would offer any color on the retention rates in the homebuilders' channel as the insured homes roll off of the builders' warranties? And maybe also similarly, how the loss ratio looks as the roll off occurs?

偉大的。鑑於歷史有限，現在下結論可能還為時過早，但是，隨著投保房屋不再獲得建築商的保修，您是否有任何數據點可以提供有關房屋建築商渠道留存率的信息？也許也類似，當發生滾轉時，損失率會如何？

Yah. Certainly, it's a very high, very favorable retention rate. And there's a couple of different ways of looking at it. The way we look at it is these customers come to us more as an agency than as a particular Hippo home insurance product. So at times, we place those policies on HHIP, and at other times, we place those policies with our carrier partners. And both HHIP and our carrier partners typically offer policies that shift or transition as those homes become older into more of a traditional homeowner's policy. So we not only have a very high retention, but we have the opportunity to transition those homes from a new construction policy to a more traditional policy as those homes age.

是啊。當然，這是一個非常高、非常有利的保留率。有幾種不同的看法。我們的看法是，這些客戶更多是作為代理商來找我們，而不是為了購買特定的 Hippo 家庭保險產品。因此，有時我們會將這些保單放在 HHIP 上，有時我們會將這些保單放在我們的承運合作夥伴上。而且，HHIP 和我們的承運合作夥伴通常都會提供隨著房屋變舊而轉變的保單，使其更接近傳統的房屋保單。因此，我們不僅擁有非常高的保留率，而且隨著房屋的老化，我們還有機會將這些房屋從新建政策轉變為更傳統的政策。

Yaron, this is Stewart. On the loss ratio side, I agree it's a little bit early for us within our own portfolio to really have a longer-term view on ours specifically. But the early data that we do have suggests that the new homes perform better than older homes, both in PCS events and also on the non-weather losses. And that this is -- at a portfolio level for us, it is a highlight and one of the drivers of improvement to our loss ratio. I think, as Rick said, the policies shift to more traditional homeowners' policies as the homes age. And so you'd expect that after 10, 20 years, et cetera, these things would start to look more like sort of a traditional homeowner's loss ratio. But we're excited about the results that we're seeing on the loss ratio for the earlier period of the homes lives.

亞龍，這是史都華。在損失率方面，我同意現在對於我們自己的投資組合來說，真正對我們的損失有更長遠的眼光還為時過早。但我們掌握的早期數據表明，無論是在 PCS 事件中還是在非天氣損失方面，新房的表現都比老房子好。從我們的投資組合層面來看，這是一大亮點，也是我們損失率改善的驅動力之一。我認為，正如里克所說，隨著房屋老化，政策將轉向更傳統的房主政策。因此，您可以預料，經過 10 年、20 年等之後，這些情況將開始變得更像傳統的房主損失率。但我們對房屋早期損失率的結果感到非常興奮。

Got it. And then one quick one, if I could. I understand that the First Connect stake sale would have a negligible impact on EBITDA. But I assume it's a negligible positive impact because it was loss running, right, and as it was building up?

知道了。如果可以的話，我再快速說一句話。我理解 First Connect 股權出售對 EBITDA 的影響微乎其微。但我認為這是一個可以忽略的正面影響，因為它一直在虧損，對吧，而且還在累積？

That's correct. Yes. It's a small positive impact on adjusted EBITDA because it is on an operating income basis still not yet profitable. And one of the things that, that business it makes sense for them to do is to increase their investment over time. So we felt like this was a nice time to allow that business to chart its own path. Creating a marketplace to connect agents and third-party carriers is a great business, but it's not our core business, and it's at a scale where allowing it to make the choices that are right for it and its future growth and value makes all the sense in the world.

沒錯。是的。這對調整後的 EBITDA 產生了微小的正面影響，因為基於營業收入，它尚未獲利。對他們來說，明智的做法之一就是隨著時間的推移增加投資。因此，我們覺得這是一個讓該企業規劃自己道路的好時機。創建一個連接代理商和第三方承運人的市場是一項偉大的業務，但它不是我們的核心業務，而且它的規模使得它能夠做出適合它及其未來成長和價值的選擇，這在世界上是非常有意義的。

Yeah, makes a lot of sense. Thank you.

是的，很有道理。謝謝。

Tommy McJoynt, KBW.

湯米·麥喬因特，KBW。

Hey, good morning guys. Thanks for taking my questions. Did you talk about sort of the rationale for why Spinnaker sold that that shell part of the business? Was it just a noncore unutilized piece? Or was there any other rationale there?

嘿，大家早安。感謝您回答我的問題。您是否談論過 Spinnaker 出售該空殼業務的原因？它只是一個非核心的未使用部分嗎？或者有其他理由嗎？

Yeah. Hey Tommy, this is Rick. It is something that was dormant sort of on our shelf. So if you think about Spinnaker as a fronting carrier, Spinnaker actually has 4 different companies within its banner. So it has Spinnaker, which is the admitted A- rated carrier. It has Spinnaker Specialty, which is also rated surplus lines carrier. We had Mainsail, which is the one that we sold that was an unused asset, widely licensed. And we also have Wingsail, which is an unused asset. We had a partner that wanted access to their own carrier, and we thought it was a great way to monetize that transaction on an asset that was redundant given the fact that we also have Wingsail. So it just made sense to move it out, but there was really no other rationale behind it.

是的。嘿，湯米，我是瑞克。它是我們書架上閒置的東西。因此，如果您將 Spinnaker 視為前端運營商，那麼 Spinnaker 實際上旗下有 4 家不同的公司。因此它擁有 Spinnaker，這是公認的 A 級航空公司。它擁有 Spinnaker Specialty，也被評為超額線路承運商。我們有 Mainsail，這是我們出售的未使用資產，已獲得廣泛許可。我們還有 Wingsail，這是一項未使用的資產。我們有一個合作夥伴想要使用他們自己的承運商，我們認為這是一個很好的方式，可以利用多餘的資產來賺錢，因為我們也有 Wingsail。因此將其移出是有道理的，但實際上沒有其他理由。

Okay. Got it. It makes sense. And then switching over to the HHIP program. Obviously, it's been a great turnaround in that segment, in that program. With a lot of the underwriting actions that you've taken, are you looking to kind of re-grow -- sort of growing that business into 2025? What are some early thoughts when you think about the potential growth rate in that segment?

好的。知道了。這是有道理的。然後切換到 HHIP 程式。顯然，該環節、該節目已經有了巨大的轉變。透過許多核保行動，您是否希望重新發展—將業務發展到 2025 年？當您考慮該領域的潛在成長率時，您最初的想法是什麼？

Yeah. I think, Tommy, that as we've said since really Q2 of 2023, our first priority is to remediate the historical or legacy portfolio that was in HHIP. We've made a ton of progress on that. And I think not all the progress that we have made is actually even showing in the financials. As you know, these things take effect at renewal, and then it takes an entire year after renewal to work it into the financials. So there'll still be a positive impact on that. We still have a little bit of work to do to clarify that portfolio, but we are also writing new business in areas that we believe strongly in that don't contradict the hard work our team has done to turn it around. A lot of that is around the new builder channel. But we are accelerating our growth in that. There will still be a bit of a headwind for another quarter or 2 on the stuff that we're still getting rid of, but we are writing new business in areas we have a high likelihood of a positive expected loss ratio.

是的。湯米，我認為，正如我們自 2023 年第二季以來所說的那樣，我們的首要任務是修復 HHIP 中的歷史或遺留投資組合。我們在這方面已經取得了巨大的進展。我認為我們所取得的進展並非全部都真正體現在財務上。如您所知，這些內容在續約時生效，並且需要續約後整整一年的時間才能計入財務狀況。因此這仍然會產生正面的影響。我們還有一些工作要做，以明確這一投資組合，但我們也在我們堅信的領域開展新業務，這些業務不會與我們的團隊為扭轉局面所做的艱苦工作相矛盾。其中許多都圍繞著新的建造者管道。但我們正在加速這一領域的成長。在接下來的一兩個季度裡，我們仍會面臨一些阻力，因為我們仍在處理這些阻力，但我們正在一些很可能出現正預期損失率的領域開展新業務。

Okay. Got it. So we should still think of the services and IaaS growth rates into '25 as larger than the HHIP?

好的。知道了。所以我們仍應認為 25 年的服務和 IaaS 成長率高於 HHIP？

That's right. We're going to give our guidance for 2025 next quarter, but IaaS, the Spinnaker platform, is doing exceptionally well, as is our agency, both in top line growth and operational efficiency and -- in the Spinnaker realm and quality of programs that it partners with. And that will be -- that will continue to be our primary driver in the short run, but we're looking forward to rebuilding the top line momentum in HHIP as well.

這是正確的。我們將在下個季度提供 2025 年的預期，但 IaaS（Spinnaker 平台）表現非常出色，我們的機構也是如此，無論是在營收成長和營運效率方面，還是在 Spinnaker 領域以及與其合作的專案品質方面。而這將繼續是我們短期內的主要驅動力，但我們也期待重建 HHIP 的營收動能。

Okay. Got it. And then just last one. The decision to repurchase some shares, did you feel that was a onetime sort of bullet with the proceeds from the sale of First Connect? Or should we think about buybacks being a recurring part of the story going forward?

好的。知道了。接下來是最後一個。決定回購部分股份，您是否認為這只是用出售 First Connect 所得的一次性資金做出的一次性舉措？或者我們應該認為回購是未來故事中不斷重複的一部分？

This is Stuart, thanks for the question. Tommy, this is Stewart. As you know, the Board has previously approved a programmatic share buyback program. And after the second quarter of 2023 with the wind and hail events, we paused the purchases under that program just to get a little bit better sense of kind of the trajectory of the business and how things were going to be developing. As we get closer to profitability, I think we'll continue to explore ways to be opportunistic when we feel like repurchasing shares would be in the best interest of our shareholders. In this case, we had an opportunity to acquire shares at a discount to market with the incremental cash from the First Connect transaction. And I think with our increasing -- our increasingly close proximity to profitability, we will continue to look for opportunities to be optimistic.

我是斯圖爾特，感謝您的提問。湯米，這是史都華。如您所知，董事會先前已批准了程序性股票回購計畫。2023 年第二季出現強風和冰雹天氣後，我們暫停了該計劃下的採購，只是為了更好地了解業務的發展軌跡和事態將如何發展。隨著我們越來越接近獲利，我認為我們將繼續探索機會方式，當我們認為回購股票最符合股東的利益時。在這種情況下，我們有機會利用 First Connect 交易中獲得的增量現金以低於市場價格的價格收購股票。我認為，隨著我們越來越接近獲利能力，我們將繼續尋找保持樂觀的機會。

Thanks for the call.

感謝您的來電。

(Operator Instructions) We have no further questions. So I hand back over to Rick mccathern for closing remarks.

（操作員指示）我們沒有其他問題了。因此我將發言權交還給 Rick McCathern，請他作最後發言。

Well, I would just like to thank everybody for joining the call. We're very excited about the progress in Q3, and look forward to sharing our continued improvements in Q4. Thank you, everyone. Have a great day.

好吧，我只想感謝大家參加電話會議。我們對第三季的進展感到非常興奮，並期待在第四季度分享我們的持續改進。謝謝大家。祝你有美好的一天。

Thank you. This does conclude today's call. Thank you for joining. You may now disconnect your lines.

謝謝。今天的電話會議到此結束。感謝您的加入。現在您可以斷開線路了。