Ally Financial Inc. ALLY partners with home insurance group Hippo Holdings, as it agrees to back the home insurance policies provided by Hippo. The new issuing carrier relationship is being built between Hippo and Ally Financial’s subsidiary, Motors Insurance Corp.
As part of the relationship, Hippo will underwrite the insurance policies and sell them to customers, whereas Ally Financial will save the cash required to back the policies, hence, assuming risk.
Such an arrangement will help in doubling Hippo’s underwriting capacity and ultimately leave it with more money to invest in improving its technology and services.
The policies will be initially offered in 10 states before being rolled out nationally.
Hippo’s president, Rick McCathron, stated, “As we are a fast-growing company, it’s very important for us to have plenty of underwriting capacity to support our growth.”
McCathron added, “By working with Ally, we are bringing significant growth and diversification to our business, offering Hippo’s protective insurance products to more homeowners across the country. Our innovative and proactive approach aligns perfectly with Ally’s customer-centric mission to serve the needs of the customer and help protect people’s financial future, which includes their most valuable financial asset: the home.”
Mark Manzo, Ally Financial’s president of insurance, stated, “This relationship complements and diversifies the ongoing expansion of Ally’s insurance business. Hippo’s innovative model and proactive approach to helping their customers protect their most important investment aligns with our commitment to be a relentless ally for all things financial. We’re excited to build on the investment from our strategic investment arm, Ally Ventures, and support Hippo’s national growth.”
Ally Financial primarily provides insurance to only automotive dealers and their customers. Its insurance business accounts for almost 20% of total net revenues.
Of late, it has been trying to diversify into banking products and, hence, has forayed into the mortgage business, which is supporting earnings growth. Also, the company has been making efforts to enhance digital offerings and introduce products to further boost its profitability.
So far this year, shares of the company have gained 52.2% compared with 56.2% growth recorded by the industry.
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Currently, Ally Financial carries a Zacks Rank #2 (Buy).
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