In 2023, Hippo faced what CFO Guy Zeltser describes as perhaps the worst quarter in the insurance company’s history. The response was not to chase growth harder. Instead, leadership made a decision that would have seemed counterintuitive during the company’s earlier expansion: shrink part of the business.

Between 2023 and 2024, homeowners insurance premiums declined approximately 30% as Hippo recalibrated the risks it was willing to carry. For Zeltser, the decision marked a turning point in a broader transformation—one that would move the company toward profitability and a more diversified business model.

Today, Hippo supports more than 60 insurance programs, generating fees and commissions alongside underwriting and investment income. That mix matters. Fee revenue offers greater predictability, while improved underwriting performance gives the company confidence to retain additional insurance risk.

Zeltser’s approach reflects an unusual career path. Before McKinsey and corporate finance, he worked in his family’s toy business, where customer complaints and everyday transactions made the consequences of business decisions tangible.

At McKinsey, another lesson emerged: even a board-approved strategy could stall when short-term financial targets overwhelmed longer-term investment.

Both experiences inform his current agenda.

Hippo is also deploying AI across claims and finance operations. Zeltser reports that AI now handles more than 80% of initial loss notifications, while finance has shortened its quarterly reporting timeline.

With Hippo targeting a threefold or fourfold increase in profitability between 2026 and 2028, Zeltser faces a familiar tension: delivering quarterly results without sacrificing the investments required to build a larger business.