Ally Financial taps insurtech Hippo on home-insurance offering

Ally Financial entered into a partnership with Hippo, an arrangement that would allow it to offer home insurance to its customers.

Why should we care?
The Ally-Hippo tie-up is a customer acquisition win for Hippo, which will underwrite the policies and sell them to consumers. Meanwhile, Ally will assume the risk and put aside the cash ($500M initially) to back them. The result, for Hippo, will be doubled underwriting capacity, a milestone that will allow it to invest more capital in technology and services. Hippo last week began trading on the New York Stock Exchange, following the completion of its merger with a special-purpose acquisition company backed by Reid Hoffman and Mark Pincus – founders of LinkedIn and Zynga. “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," said Rick McCathron, president at Hippo. “We're thrilled to be working with such a prestigious financial institution and are excited to have their support as we build the home insurance company of the future.” The relationship, according to Ally, “complements and diversifies the ongoing expansion” of the company’s insurance business.