AM Best Comments on Credit Ratings of Spinnaker Insurance Company Following Merger Announcement

AM Best has commented that the Credit Ratings (ratings) of Spinnaker Insurance Company (Spinnaker) remain unchanged following the announcement that its ultimate parent, Hippo Enterprises Inc. (Hippo), has entered into a definitive agreement to become publicly traded through a merger with Reinvent Technology Partners Z (Reinvent). The transaction is subject to customary closing conditions, including shareholder approvals. The outlook of Spinnaker’s ratings is stable.

As a result of the transaction, the combined company will be publicly traded. Hippo’s existing stockholders are expected to retain approximately 87% ownership of the combined business on a pro forma basis after the closing of the merger. AM Best anticipates that the transaction will close in mid-2021 subject to customary closing conditions, including the approval of stockholders. Pursuant to the merger agreement, a director appointed by Reinvent will join Hippo’s Board of Directors at the closing of the transaction.

The aforementioned merger agreement is supported by a fully committed private investment in public equity of $550 million at $10 per share, which was led by existing Hippo investors, mutual funds and Reinvent Capital. In addition, the combined company is expected to have approximately $1.2 billion in cash at closing of the transaction, including up to approximately $230 million of cash held at Reinvent that was raised during its initial public offering in November 2020.

AM Best plans additional discussions with company management over the near term to discuss further details regarding the transaction as they become available and will provide further commentary as deemed appropriate.

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper media use of Best’s Credit Ratings and AM Best press releases, please view Guide for Media - Proper Use of Best’s Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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