Shares of home insurance group Hippo Holdings Inc. (HIPO) surged over 20% on Wednesday after the company reported better-than-expected third quarter results and announced the sale of a majority stake in its subsidiary First Connect Insurance Services.

For the quarter ended September 30, 2024, Hippo posted revenue of $95.5 million, up a robust 65% year-over-year and exceeding analysts' expectations of $94.1 million. The strong revenue growth was driven by continued improvement in Hippo's core home insurance business.

Hippo's net loss attributable to shareholders narrowed significantly to $8.5 million, down 84% compared to the same period last year. The company also reported positive operating leverage, with fixed expenses declining while revenue increased due to investments in operational efficiencies.

In a separate announcement, Hippo revealed it has sold a majority stake in its First Connect Insurance Services subsidiary to growth equity firm Centana Growth Partners. The deal will see Centana invest over $60 million into First Connect to fund its future growth plans.

First Connect is an insurtech platform that digitally connects independent insurance agents with carriers. By divesting the subsidiary, Hippo can now focus more intently on enhancing its core home insurance operations and advancing towards profitability.