When the news broke that Westwood Insurance Agency had acquired Hippo’s U.S. homebuilder distribution business, it might have seemed like just another reshuffling of insurance channel assets.

However, to those closely watching the evolution of embedded insurance—and the strategic stakes tied to trust, speed, and climate risk resilience in the new-home sales process—this move speaks volumes.

Trust has to flow throughout the homebuying process,” says Alan Umaly, President of Westwood. “It starts with the confidence a buyer places in the builder to deliver a high-quality, resilient home. It extends to the lender to finance their dream home, and ultimately, to their insurance agent, who helps them find the right policy to protect that investment.”

With the acquisition, Westwood gains new access to product innovations and a broader distribution network. It also strengthens Westwood’s capacity to offer forward-looking insurance solutions for the nation's largest homebuilders—20 of the top 25 now rely on Westwood.

A Timely Solution to a Mounting Crisis

This move comes at a moment when insurance for new homes—especially in high-risk areas—is under intensifying strain. As a Brookings Institution analysis by David Wessel (June 17, 2025) points out, homeowners' insurance is becoming increasingly difficult to obtain and more expensive, particularly in ZIP codes vulnerable to climate-related risks. Between 2018 and 2022, premiums rose 8.7% faster than inflation. In the riskiest ZIP codes, average premiums reached $2,321—82% higher than those in low-risk zones—and policy nonrenewal rates were nearly double the national average.

These trends have raised alarms among homebuilders and buyers alike. The Brookings report notes that in markets such as South Carolina, Florida, and California, buyers are often blindsided by high premiums or denied coverage outright.

In that environment, Westwood and Hippo's partnership signals a proactive strategy to de-risk insurance availability and smooth buyer experiences.

Our strategic agreement with The Baldwin Insurance Group [Westwood’s parent] allows us to focus on what we do best,” says Daniel Blanaru, Chief Growth Officer at Hippo. “It also allows us to accelerate the growth of our new homes business by accessing three times as many new construction homebuyers.”

The Tech-Enabled Advantage

In practical terms, Hippo will now run in alignment with Westwood's simplified underwriting system, which removes the buyer from the quoting equation entirely.

We simplify the underwriting process by only using information about the house,” Blanaru explains, “to issue policies that typically provide more flexibility than a standard homeowner's policy for an existing home.”

That automation, paired with Westwood’s longstanding relationships with builders, could create a powerful differentiator in a market where closings are increasingly at risk due to delayed or unaffordable insurance.

Lessons From the P&C Turbulence

For Hippo, the sale marks a sharpening of its strategic focus after a volatile stretch in the property and casualty (P&C) insurance market. In 2024, Hippo managed to improve its gross loss ratio by 28 points by withdrawing from catastrophe-prone zones and adjusting prices to better reflect changing climate risks, material costs, and reinsurance rates.

Blanaru sees the deal as part of that recalibration.

We expect similarly strong results from this partnership and will continue to underwrite with discipline—evaluating all risk against our return targets and strict tolerance thresholds, while enhancing our loss prediction capabilities through better data.”

What Builders Are Asking For

For Westwood, the acquisition is less about scale and more about certainty.

While the core needs have remained the same,” says Umaly, “the stakes have become much higher. Rising premiums and fewer options, especially in climate-impacted regions, mean builders can’t afford delays or complications at the closing table.”

Builders, he says, are more and more challenged to find solutions for reliability, coverage availability, seamless processes, and early cost transparency. Brookings’ data show that the cost predictability of insurance has become a key concern for prospective homeowners, especially in areas where nonrenewal rates exceed 20%.

Westwood has long sought to deliver this through embedded insurance models that quote policies early in the sales journey. However, the Hippo acquisition takes that strategy a step further, providing Westwood with access to a new product tailored to new construction homes and an expanded technology backbone.

Removing Friction From Closings

Buyers, particularly first-timers, remain anxious and price-sensitive. Home insurance is increasingly the bottleneck.

Don’t treat insurance as an afterthought,” Umaly warns. “It can have a big impact on whether a deal closes smoothly—or at all.”

Together with Hippo, Westwood can continue to quote coverage earlier, price with more accuracy, and deliver consistent availability across expanding markets—all without adding friction to the sales cycle.

We’re making it easier for builders to deliver a streamlined, worry-free closing experience—at a time when every point of friction can threaten the deal.”

The Embedded Advantage Expands

Beyond operational efficiency, Umaly sees a more profound shift underway: Embedded insurance is becoming a branding advantage for builders.

Builders who partner with Westwood can offer insurance quotes early in the buyer’s journey,” he says, “which brings much-needed clarity around monthly costs and reduces the chance of surprises at closing. When handled proactively, insurance becomes a differentiator, not a hurdle.”

Blanaru agrees.

By offering policies that reward buyers for choosing homes built to modern codes,” he says, “we believe we can deliver affordable, forward-looking insurance solutions that better fit today’s homebuyers.”

Builders Must Act Now

Insurance used to be a back-office detail—a last-minute item on the closing checklist. Today, it’s a frontline concern with the power to derail sales and destroy trust.

With this move, Westwood is doubling down on solving that problem.

The acquisition places Westwood in a stronger position by adding a purpose-built insurance product for new construction homes to our offering,” says Umaly. “That’s exactly what the market needs right now—clarity, capacity, and confidence.”