Investments

3 Months Ended

Mar. 31, 2025

Investments, Debt and Equity Securities [Abstract]

2. Investments

The amortized cost and fair value of fixed maturities securities and short-term investments are as follows (in millions):


	March 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Fixed maturities available-for-sale:
U.S. government and agencies	$	29.3	$	0.1	$	(0.1)	$	29.3
States and other territories	10.5		—		(0.2)		10.3
Corporate securities	135.6		1.4		(0.5)		136.5

Residential mortgage-backed securities	20.9		0.1		(1.2)		19.8
Commercial mortgage-backed securities	7.1		—		(0.3)		6.8
Asset backed securities	9.5		—		—		9.5
Total fixed maturities available-for-sale	212.9		1.6		(2.3)		212.2
Short-term investments:
U.S. government and agencies	129.2		—		—		129.2
Commercial paper	8.4		—		—		8.4
Corporate securities	37.8		—		—		37.8
Total short-term investments	175.4		—		—		175.4
Total	$	388.3	$	1.6	$	(2.3)	$	387.6


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Fixed maturities available-for-sale:
U.S. government and agencies	$	24.8	$	—	$	(0.2)	$	24.6
States and other territories	11.2		—		(0.3)		10.9

Corporate securities	131.8		0.8		(1.1)		131.5

Residential mortgage-backed securities	21.5		—		(1.5)		20.0
Commercial mortgage-backed securities	7.2		0.1		(0.4)		6.9
Asset backed securities	11.8		—		—		11.8

Total fixed maturities available-for-sale	208.3		0.9		(3.5)		205.7
Short-term investments:
U.S. government and agencies	118.5		—		—		118.5
Commercial paper	17.5		—		—		17.5
Corporate securities	31.6		—		—		31.6
Total short-term investments	167.6		—		—		167.6
Total	$	375.9	$	0.9	$	(3.5)	$	373.3

The following tables present the gross unrealized losses and related fair values for the Company’s investments in available-for-sale debt securities and short-term investments, grouped by duration of time in a continuous unrealized loss position as of March 31, 2025, and December 31, 2024 (in millions):


	March 31, 2025
	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities available-for-sale:
U.S. government and agencies	$	8.9	$	—	$	1.9	$	(0.1)	$	10.8	$	(0.1)
States and other territories	1.9		—		4.8		(0.2)		6.7		(0.2)

Corporate securities	36.4		(0.1)		19.1		(0.4)		55.6		(0.5)

Residential mortgage-backed securities	3.8		—		9.9		(1.2)		13.7		(1.2)
Commercial mortgage-backed securities	1.4		—		4.1		(0.3)		5.5		(0.3)
Asset backed securities	2.1		—		2.4		—		4.5		—
Short-term investments:
U.S. government and agencies	1.9		—		—		—		1.9		—
Commercial paper	8.4		—		—		—		8.4		—
Corporate securities	18.0		—		—		—		18.0		—
Total	$	82.8	$	(0.1)	$	42.2	$	(2.2)	$	125.1	$	(2.3)


	December 31, 2024
	Less than 12 months				12 months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
Fixed maturities available-for-sale:
U.S. government and agencies	$	14.5	$	(0.1)	$	1.9	$	(0.1)	$	16.4	$	(0.2)
States and other territories	5.0		(0.1)		5.5		(0.2)		10.5		(0.3)
Corporate securities	55.2		(0.5)		25.4		(0.6)		80.6		(1.1)

Residential mortgage-backed securities	7.4		(0.1)		10.1		(1.4)		17.5		(1.5)
Commercial mortgage-backed securities	0.4		—		4.1		(0.4)		4.5		(0.4)
Asset backed securities	—		—		4.1		—		4.1		—
Short-term investments:
U.S. government and agencies	—		—		—		—		—		—
Commercial paper	6.3		—		—		—		6.3		—
Corporate securities	7.4		—		—		—		7.4		—
Total	$	96.2	$	(0.8)	$	51.1	$	(2.7)	$	147.3	$	(3.5)

The Company has determined that unrealized losses as of March 31, 2025 and December 31, 2024 resulted from the interest rate environment, rather than a deterioration of the creditworthiness of the issuers. Therefore, an

allowance for credit losses was not necessary as it is more likely than not that the Company will not be required to sell the investments before the recovery of the amortized cost basis or until maturity. As of March 31, 2025, none of the Company’s fixed maturity portfolio was unrated or rated below investment grade.

The amortized cost and fair value of fixed maturities securities by contractual maturity are as follows (in millions):


	March 31, 2025
	Amortized Cost		Fair Value
Due to mature:
One year or less	$	39.0	$	39.0
After one year through five years	102.4		102.5
After five years through ten years	32.7		33.4
After ten years	1.3		1.2
Residential mortgage-backed securities	20.9		19.8
Commercial mortgage-backed securities	7.1		6.8
Asset backed securities	9.5		9.5

Total fixed maturities available-for-sale	$	212.9	$	212.2

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

Net realized gains and losses on fixed maturity securities were insignificant for the three months ended March 31, 2025 and 2024, respectively.

The Company’s net investment income is comprised of the following (in millions):


	Three Months Ended March 31,
	2025		2024
Interest on cash and cash equivalents	$	2.1	$	2.2
Fixed maturities income	2.8		1.8
Short-term investment income	1.1		2.0
Total gross investment income	6.0		6.0
Investment expenses	(0.2)		(0.1)
Net investment income	$	5.8	$	5.9

Pursuant to certain regulatory requirements, the Company is required to hold assets on deposit with various state insurance departments for the benefit of policyholders. These special deposits are included in cash and cash equivalents, fixed maturities, or short-term investments on the condensed consolidated balance sheets. The carrying value of securities on deposit with state regulatory authorities total $12.7 million and $12.2 million as of March 31, 2025 and December 31, 2024, respectively.

Hippo Holdings Inc. 10-Q