Q1 2021 SelectQuote Inc Earnings Call

Welcome to select code first quarter earnings conference call all license I still need to visit.

Any background noise.

The speeches remarks, there will be a question and answer session. If you would like to ask a question. During this time.

Followed by the number one on your telephone keypad, if you'd like to try your question first the bounty.

Is now my pleasure to introduce that center.

Quote Investor relations since your country, maybe getting your conference.

With the SEC therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in our forward looking statements.

And with that I'd like to turn the call over to our Chief Executive Officer, Tim to anchor Tim.

Dr matching I'll speak more to this in a moment.

Second we successfully hired and Onboarded over 2000, New associates, and our senior division to support our APC isn't more than half of these new associates joined US as license sales agents. We also significantly grew our supporting functions such as license in rollers and customer care agents are ccas, who now number over 300 strong I will.

And some enhancements made in the off season that positions like look for success. These are but the latest examples of the ROI focused investments we have been making for decades. Our approach has delivered the highest retention highest LTV and best unit economics in the industry.

And an important note we firmly believe we can achieve our aggressive growth goals without compromising our industry leading profitability.

I'll start with the senior market as a whole overall growth for Medicare advantage market is expected to be in the 10% range as forecasted by CMS with total Medicare advantage enrollment increasing to approximately 27 million Americans on top of that plan choices will increase about 20%. This year, we believe this increasing complexity and.

Our first quarter marketing was more efficient than last year, and we continue to build momentum as we enter 81, leading indicator is the increase in ATP rep appointments, which were up 30% over last year on a per unit basis, and 80 rep appointments set by consumer to receive a call back when HPP opens up to discuss their plans. These HPP.

Can we typically see a 50% improvement and agent productivity for flex agents that return for the second a peace Corps agents that compounding effect as a unique and powerful part of our model that I wanted to make sure. We highlighted now let's turn to the third leg of our strategy or a purpose built technology powering both are wide funnel marketing and are highly.

Productive internal agent force total investments in technology in fiscal 20 totaled over 25 million and we will continue to invest in the future as technology enables our best in class marketing an agent function for the ongoing season enhancements to our agent workflow and desktop or implemented to improve both customer retention.

Separation of persistency in L. T V results versus our peers as a reminder, R. C. C. A team is focused entirely on policyholder engagement in service. After the initial policy sale. This is important for three main reasons first because nothing to static from year to year, our customers health profile or prescription drug needs or state of residents can change.

Hmm year to year, which has impacts on the suitability of their policy.

By having the costs associated with these investments, but no associated revenue. This obviously pays off during our second quarter when a P starts and these flux agents start selling.

Reagent allowed us to grow our total submitted policies, 118% and total approved policies, 129%. The largest driver of this growth was m- policies, where we grew our M&A submitted and approved policies, 130% we.

We continue to benefit from our strategy of hiring a large flex class for Endo 80, and keeping a large percentage of those flex agents as full time core agents. After this.

This strategy allows us to grow at non peak selling periods, our first quarter and fourth quarter, but more importantly allows us to increase the number of core agents selling during a and b when core agent tend to be over 50% more productive and flex agents.

Moving on to Ltvs for the quarter LTV of an M&A policy was flat year over year, which was slightly above our expectations and primarily driven by slightly lower persistency offset by higher commission rates and positive mix shift.

Nothing has changed on the persistency front since we discussed this last quarter as a reminder, with the introduction of OE.

<unk> and her last rights and other fees for additional services, we can provide the carriers movie.

Moving onto a recapture rate Ah recapture eight year to date is over 25% and has improved each of the last few years due to the customer care initiatives that Tim mentioned before.

One quick point I will make on recapture rate is how we define the metric redefine recapture rate as the number of policyholders that have lapsed since the beginning of the year as the denominator and the number of those policyholders that we have sold another policy to as the numerator <unk>.

Those recaptured customers can be with the same carrier, which technically would not be a current event for six O six or a new carrier, which would be a current event for six O six and a new customer with that new carrier and new L. T V attached to that policy.

Lastly from a cost perspective, while our sales and fulfilment costs were up with the increase in revenue we benefited from a margin perspective as the productivity per agent went up and we staggered or a P hires throughout the quarter, which optimize our spend during the quarter are Legion marketing costs also improved as a percent of <unk>.

Revenue year over year as close rates improved the combination of these items allowed us to improve our margin and swing to a profit versus the loss and the quarter year over year.

If we turn to slide 11, our life Division grew revenue, 55% to $43 million and adjusted EBITDA, 80% to $10 million.

Just did EBITDA margin improved and 21% to 24% as a result of a higher year over year mix a final expense revenue, which has a higher margin versus term life revenue.

As our final expense policies are becoming a larger and larger portion of the life Division, we've decided to specifically break out the premium associated with spinal expense versus other ancillary products revenue growth was driven by 70% increase in total premium which was a combination of our term life premium increasing 1%.

And our final expense premium growing 397%.

For our term life product, we are seeing strong demand on the front end of the sales cycle. However, as mentioned before the impacts of Covid has been a headwind as consumers have delayed getting blood work done and completing the process to get their policies and the force.

For our final expense product over the last several quarters, we are significantly ramped up our investment in agents and marketing to sell this product. It's a great example of leveraging the platform that we have built to be able to launch new products. We again generated more premium from our ancillary products and the first quarter and we did our term life products.

This will change in the second quarter as we shift some of our lives health advisors, who sell this product to our senior division to self senior products. During a P. P. Turning to auto and home on Slide 12 revenue declined 5% to $10 million and adjusted EBITDA increased 45% to $4 million.

As discussed in prior quarters, the decision to reallocate agents from our auto and home business to our senior Division and final expense efforts has had an impact on a auto and home revenue, while we didn't write as much premium and revenue was down 5% are adjusted EBITDA was actually up year over year.

This was driven by the fact that the agents we did have in our auto and home business with more tenured agents and therefore more productive which meant on a relative basis, we can generate almost the same amount of revenue with fewer agents <unk>.

And with more efficient marketing as tenured agents clothes rates are also higher.

Turning to slide 13, let me briefly detail R capital position heading into a P.

As we've stayed in the past we raised enough proceeds through the I T O in private placement to be able to grow the business for the next several years and we enter this a P and the strongest cash position in the company's history.

During the quarter, we use $9 million in cash from operations as we significantly grew our policies and our senior division as I stated earlier. This included $11 million with costs associated with Onboarding in training or flex agents.

In addition, we used about $4 million in cash from general Capex.

We ended the quarter with $347 million in cash or cash equivalents $325 million, a term loan debt and zero drawn on our $75 million revolver.

We also ended the quarter with $628 million of accounts receivable and short and long term commissions receivable balances.

Turning to our guidance on 514, given the performance of the first quarter, which was above our internal expectations and the strong start to a T. We are seeing we're raising our guidance for fiscal year 2021.

We currently expect consolidated revenue to be in the range of $840 million to $880 million. This would imply consolidated revenue growth of between 58% and 65% year over year, we expect adjusted EBITDA to be in the range of $220 million to 235 $9.

Which would imply consolidated adjusted EBITDA growth of between 43% and 53% year over year.

Lastly, we expect net income to be in the range of $130 million to $141 million.

Increasing guidance is primarily driven by additional policy growth in our senior business and growth in our sales with final expense policies and with that let me now turn the call back to the operator for your questions.

As a reminder to ask the question you need your pet Star one on your telephone with bright question, just a pound or husky.

He's limit yourself to one question and one follow up you stand Bible, we compiled a Q&A Ross.

Growth implied in the business.

We're expecting 87% of the waiting.

Persistency at to reflect the most recent persistency. So it allows us to basically reflects what we're seeing in the business, but not overreact, either when it's going up or when it's going down.

So.

That's worked well for us and.

That those are the assumptions that are in there.

In terms of.

Different carriers, having different persistency.

In general there in a range, but yes different carriers do has a slightly different persistency and we have seeing a mix shift towards carriers that have higher persistency now that's not driven by our agents steering business, one way or the other we're an open platform and so it's really a function of those carriers having plans.

Which are competitive in the marketplace.

And those plans basically taking a larger piece of share.

Great. Thank you.

Our next question comes from Joel Anderson.

Your line is open.

Hi, Thanks, everyone I want to dig more into the Companys guidance increase of $65 million on revenues and 20 be down EBITDA clearly.

Revenue was at least the guidance raise it more than the beat in the quarter or help us understand little bit more about the drivers. There is it driven by some early positive trends youve seen during the first few weeks of a b or is it that you have exceeded your hiring targets you talked about the productivity just flush out a little bit more about what has changed in the past three months that you are more comfortable.

Raising guidance by 65 million up at this point.

Yes, I think it's really a combination of several factors some of which you mentioned, yes, we beat in the first quarter compared to our internal expectations. So that obviously goes into the calculation I think Tim mentioned.

The first several weeks of October.

Have been have.

I've been very robust and strong and we've seen really good agent productivity and specifically on the flip side.

So that that goes into the equation as well and then also just given the investment that we're making.

In in final expense policies.

Certainly towards the back half of the year.

Thats driving some of that over performance as well so.

Those are those are the primary drivers of our confidence in terms of being able to raise guidance at this point in time.

Quarter, and and then yes, and and some of the things good positive trends were seen.

Yeah. That's helpful quick follow up a question on here <unk> given that fiscal second quarter is still critical for your business. I was wondering if we can provide any guidance around M. A L. D. V transfer you expecting the card is a famous fly to expert for the full year and what are your growth expectations for M. A prude policies in Fisk.

<unk> second quadrate in particular.

Yeah. So they will come to the second one first uhm, we're not necessarily providing quarterly guidance. So the guidance. We've given has been annual I think in general that sort of follows a relatively similar pattern in terms of the quarterly spread of that and it'll guidance and so.

You know they have taken in the in the guidance, we just gave.

So disproportionately probably in in the second quarter than third quarter, then fourthquarter just based on how the the business <unk> works and then the drivers that could we laid out there in terms of L. T V of a policy I think we still think that on for the full year. The L. T V will be relatively flat mm there can be some variance from quarter.

Quarter, depending ultimately answer to the mix of businesses Britain Uhm, but nothing really has changed in terms of or for all expectations Sir.

Great. Thanks.

Our next question comes from Andrew.

Anderson with debit card your line is open.

Hi, guys. Thanks, so much for that question I have a question how are you seeing the marketing expense Uhm <unk> I'm in a P N sort of how should we think about it going forward, obviously with all the election I'm spending I would imagine some channels, where I'm more expensive, but is that hopefully resolved itself. Shortly that's.

Would be maybe a tailwind for you can you they should've talk around some color around that.

Yeah, absolutely. So it's a great question certainly you know the the marketing spend what is it place to the election has ramped up through Q1 and it certainly both a combination of marketing it's been and then breaking news. The last you know a couple of days absolutely effect you know the market.

<unk> experience I think one of the reasons time back to the previous question, though that we felt so confident about you know how weird is two one even though we were seen in you know all the spin going on with the election I think it's a real testament to our model that we were able to really keep costs under control and drive really high quality.

Leads that led to some of the things that Tim talked about earlier would for both they're really good close rates with our agent as well as a P. A lot of a P. Rep appointments, which are really really good you know for a really good leading indicators for how a P is gonna go as if we gotten into you know it as we've gotten into.

A P. Certainly you know again, it's a tough environment as it relates to the election, you've got breaking news you get channels being bumps all those things with that said I feel like we've done and feel really good about where we are right now how we performed through that which makes us all the more confident when we get on the back side of this and some of that stuff starts to.

Kind of taper away I think it bodes really well for the rest of a P. And then also you know as we get out through the year that we're able to perform that strongly you know kind of through through that environment.

Perfect. That's I have and then you mentioned in the first quarter. Your Medicare advantage came as an upside here uhm expectations can you is there something you could point to or can you should've unpack where that upside came found with it or a solid ted's like Margaret <unk> marketing send better efficiency on this tale signs of add that you mentioned or.

Or something else.

So I'll go to a couple of comments or Oh, all of the <unk> you had on two of them and really strengthen marketing I think bill and his team have done an excellent job, we're always optimizing for our our marketing engine and and we are seeing a lot of strength, you're gonna really flush with leads there and then really age.

Productivity, we indicated the you know first quarter eight per cent improvement and agent productivity. We're also seen <unk> early and a P. We're seeing a lot of strength N. R. Flex agents in terms of productivity per day, and I think that ties back to some of the comments that the Bob Grant made.

Regarding investments in technology I'd also say our talent acquisition team that Bill manages is really just made it a step function of improvement in the quality of folks that we're attracting you know we had tested <unk> remote prior to Covid and had some good early when.

So we've accelerated that now we're recruiting on a national basis, it's really because of the way that we recruit all backgrounds. All walks of life can be successful at our company. So that's really opened up the talent footprint force, which makes US feel you know very bullish about our ability to continue to scale profitable into the opportunity.

Perfect. Thanks, so much.

Our next question comes from Frank Morgan with RBC Capital. Your line is open.

Good afternoon.

So during earnings season, all the managed care companies have talked about an expectation for lower plans switching this year and so I just kind of wanted to get your reaction to that in terms of the impact you felt that would have on your business and then the second question is you know <unk> you got new carriers coming on board and what has been your history.

When you do bring you carriers owned the word do you do you normally get a sort of a higher sit right early on in the process or does it have to build over time and I just related it to that that can you tell me that sir carriers have hired a persistency like what are the characteristics of the company's policy you said.

Have higher persistency versus where we're persistency. Thanks.

Those are all.

Really good questions and as far as the the plan designs and the carriers feeling good kind of a browns what's gonna happen. This year, we are definitely seeing really strong plan designs from the carriers. They took a lot of the money from they have and some other things I think that happened this year.

And really put that into benefits for consumers. So we feel really strong about that especially in regards to kind of our book in the conversations that we get to have with our book, which would be on the first one as far as the the switchers and then you go to your second question as far as when we bring a carry around it really depends on the <unk>.

Size scale and competitiveness of that carrier since we were in it now agnostic uhm platform it will.

Uhm.

It will really depends on the size of that so like for example, we brought on welfare as a partner last year and we've seen M. B a good kind of material portion of our of our book because they have a really strong plan they've got a lot of scale and then they're expanding quickly some of the smaller carriers they don't.

They don't get quite as big a percentage, but we really try to focus on carriers that can increase our offerings. So we can touch more of the country is Tim alluded to so even a 1% to 2% impact for us can be really meaningful cause it can increase our clothes rates by that because it's pure incremental business dependent on the carrier so.

I know that that was a long winded way to to say that but it just depends on the carrier.

Thank you.

Our next question comes from Jonathan Young with Barclays. Your line is open.

Hi, Thanks for the question just on the marketing and productivity improvement that you're punishing I'm curious if you're hitting all the calls that are coming in given the improve productivity are you still kind of a meeting some.

Kind of on the wayside, because you're you're getting so much it's just gonna come out on that.

Yeah, I I could talk a bit a little bit about how would we deal with that so certainly when you're managing yeah. You know T V spends and things like that you do get you do get spikes in volume, we absolutely tried to take the best advantage of all fixed costs that we possibly can we have kind of a a waterfall effect between.

The quality of lead that we think we're gonna get from a specific channel you know so let's say you know in terms of.

Some channel history channel, let's say, we think that generates you know really great leads we'll try to match those with our level one agents and we have an algorithm that we basically built on how long we will only try to match it to our level one ages before we waterfall it down we have multiple lines of defense in terms of how we waterfall. These.

You know first it's gonna go to all of our agents then if we get one a big call. Spike then it's gonna start going to other departments such as you know maybe it's C. C. As what we call S. D. As what you're basically screening wraps things like that right that are gonna try to ultimately open up the waterfall. So we can make sure that we we're able to answer every call.

We also have option that you know, we're seeing a really big call Spike. We're certainly we can put that call in queue in terms of let's say that somebody more down the funnel and answers. It basically takes a message and we say hey will call you back within you know whatever time frame. They Wanna set so that we can get back to them later, so that way we are leveraging all the fixed cost.

We can but certainly if we run on a big channel and there's a lot of eyeballs on T V. Right now some of those spikes are are uncontrollable. We do we take a really good job of maximizing everything we can and also making sure that the the calls that we do have a drop their the right calls that were dropping medium really low intent consumers verses high.

You know heightened birdie consumers.

Great and I'm curious on a pug relationships uhm is there any deviation between the pod person nonparty agents in terms of productivity and our carriers, whether new or legacy looking to add or extend that population relationship.

In terms of productivity no really it it just depends I mean, we have more agents in obviously our exchange pop. So I would say there's more level. One agents in you know just start our normal. So I quote you know poor force, but we see some of our top producing agents and the company within our parts.

You know I think one of the things that they they have to think about less right when they're pitching the plan. So they know the plan designs in and out they know the benefits of every little thing there. So they can get really really zeroed in on how to do those and they do you know a you know a really good job there Bob do you have anything you want to add to that.

Yeah, I think it was an interesting question on the the pod expansion and whether the carriers kind of asked for that.

Yes, I think that depending on what investments those carriers are making and kind of how they work closely with us They will ask us at times to expand that that's tricky given them like inner period, but we can plan ahead and plan for shifting folks over to the pot if need be if we see strength on either platform, especially this year I mean I think.

You've heard the carrier speak to it but they are extremely dependent right now on telephonic and digital channels. So we are having really meaningful and strong conversations with the carriers you know around growth and some of that growth can't come through our our part and somebody can come through our our core appointment.

Thank you.

Our next question comes from Daniel those things with city, you're mine is open.

I congrats on the corner guys. Thanks for taking the question and that that last answer was actually a good segue into what I've been wondering about on this corner. So as you mentioned all the carriers are investing heavily and the telephonic channel both external distribution and internally uhm. So I wonder if it gets really on that internal investment of the telephonic <unk>.

<unk>, how do you think that's gonna impact the competitive environment <unk> H E. P. And then looking for 220 22 as they become more comfortable with that internal telephonic channel. How do you think that impact 2020 or a P. In 2021 for paying your 2022.

Yeah, I think doing a great question I mean, we are we really are partnered with carriers on on multiple levels and we've we've hit on a few today and that's one is just at a fundamental level being a line with them on the other fundamental gross and I think you've heard <unk>.

One of the recent managed care organizations talk about the importance of their <unk> you know their channel partners and the growth a phenomenal growth of direct to consumer. So we think that's important.

Important you know a validation of I guess, what we've been saying is you know we're probably one of the big Russ drivers. We also touch recently here on the pod relationships as ways for us to really kind of accelerate our our relationships with strategic partners and then finally, Bob and his team I've been doing a lot of great work.

With respect to helping her carrier partners achieve some other strategic totals I think value base cares a great example of ways that we're integrating with them to do education with kind of our our joint policyholders around ways that they they can take advantage of valued they scare with respect to direct and you know I'm at.

Growing you know what I think we have really kind of proven that you know our model is very efficient we've got the highest lifetime values in the industry. We have a very efficient mousetrap. If you will for carriers I think that's why they continue you know this is going on before the covid environment its own.

Been accentuated post covered with carriers coming to proven models highly efficient models like select quote for growth.

Hobbies, and you'd like to to add to that.

Yeah, I think one thing to add to that she was there just certain consumers that are not going to respond to the direct carrier ads and things like that because they know that it's not going to necessarily be an agnostic platform and I think the market is getting more and more comfortable with agnostic choice space platforms, helping them navigate through.

You know plan choice and they understand better than they have in the past that even though there may be multiple zero premium plans. We see you know sometimes upwards of multi thousand dollar differences in total cost when you take into account drugs and doctors and all those things for a consumer between the different carriers uhm. So I think the carrier.

Really know that they need to rely on us because we may have better response rates and we may be more efficient for them to Tim's point. So I, we don't really do it as a massive competition, we actually kind of work in concert with each other and don't see that changing anytime soon.

Yep Yep, that's that makes sense and then I get you started the final expense product. She noted you know there is a tremendous cross-sell opportunity there between that product tennis in your product I think you mentioned 650 core Medicare policies were sold from a final expense referral is that right and what about the other way.

How many final expense policies were sold from a from a senior referral.

Yeah.

Great question, Daniel the we're very excited about filing stuff. So I just wanted to get that out there I. It is another large market opportunity. There is a fundamental consumer need here and I think you know you, we sided or grow statistics, which are pretty phenomenal, 179% versus prior year and 397% in the quarter with a very.

I've Cashflow profile, Bob you want to speak to what we're doing with the cross-sell opportunities between the two and as well as anything kind of coming back the other way.

Yeah, we do see success coming back get away. We're not we're not just because you can kind of exactly what that is but to put it can get some color there, but our C. C a team.

Uhm works with our Medicare population to ensure that they round out their overall benefits and final expense is one of the choices that we add there you know as far as final expenses of business, though to Tim's point. We are really excited it's it's a large market. That's traditionally dominated by street agents, who have really you know kind of low Tech X.

Lucy partnerships with carriers, so similar to what we saw as we got into Medicare you know, we feel like it's really ripe for a disruption in use of technology and unique plan designs to put somebody into the right plan for their needs, while kind of maximizing savings for that client and and it sounds funny I needed to ask how you saved for.

Money on those types of plans well it really just depends on their underwriting cause final expense uhm has different layers of of a choice. So there are some that have you know 25 house questions. Some that are five and some that really have zero and it's depends on how it carrier takes on that risk and we provide that choice and that way just like we do in the other.

Mm Division. So we're really excited as we get into that on how we can scale and what we can do.

Got it alright, guys. Thanks very much.

Our next question comes from Okay with Morgan Stanley Your mind is open.

Great. Thanks, so much maybe just piggybacking a little piggy.

Piggy backing a little bit on that last one kind of a bigger picture of perspective, I I think there's been some concern the market around the white police opportunity or the or the tan for the direct to consumer brokers like yourself would love to hear your your account or to that and then as he said that how are you thinking about.

The competitive landscape more broadly, particularly you know walmarts announced that if they're entering the market as well.

Yeah Lorne good question good to hear from you you know on the on the F. E side, just real quickly on the addressable market. We think that's upwards of a 10 billion dollar market opportunity you know with respect to the kind of course senior business. That's really you know our our our perspective that this is you know about it.

That should call. It a 30 billion dollar market opportunity for senior 60 million eligible today growing to 77 million and we really feel like the growth opportunity.

Really surpassed is just the incremental people that are becoming Medicare eligible and that's really because of this shift in terms of distribution as well as you know the 10% growth in N M. A so we really feel like you know there's a massive market out there I think there's been a multiple research analyst that's okay. That's a big.

Four direct to consumer players or somewhere around call. It five per cent of some of the market. So I think any way you kind of define it we think it's a pretty big market opportunity in terms of a Walmart you know there's not a lot of new news here.

We do know that this is not the first foray in the Medicare They had partnered with a direct to consumer broker a few years ago they've done some in store trials. We're hearing in the market. This is you know for this a E P less than call. It 100 agents. So they're clearly reputable company fundamentally a giant retailer we.

View this is an entirely different business model at our core right. It's <unk> a technology company data company for utilizing highly skilled agents to help consumers make important decisions both upfront and on an ongoing basis, because we know that this is not static. So we play an important role as an educator and.

Adviser.

Additionally, this is a pretty operationally heavy business you know kudos to build a Bob the rest of the team. There is a lot of complexity in this business across carriers technology marketing hiring agent pertaining agents compliance a lot to do it right I think the final point I'd make is it's you know turn it back to the Tam.

This is a massively underpenetrated market, even right now with the the four large direct to consumer players, there's literally thousands of agents.

Selling a Medicare policies right now during a P again, making up less than 5% of the market. So even if Walmart decides to.

And you know hundreds of agents next year, it will still be relatively small in the grand scheme of things given the size of the market. So we don't take it lightly because it's Walmart, we'll monitor it and we'll see how 'bout a balls.

Great. Thank you so much.

Our next question comes from my or C. O P. D. W. Your line is open.

Okay. Thanks, I wanted to ask about the impact of the O M. P and I know, it's early but I was wondering if you have what you've been able to expect so far about the persistency of customers that did change carriers during the L. A P and those that did not in terms of future persistency.

So I think you know we saw lower persistency based off of last year's O. A P. Having said that I think uhm one positive trend that we are seeing is that the lapse rates throughout the course of the year.

Has gotten better on a year over year basis, and so well. That's you know you have to wait to sort of get to your annual renewal in January so that's completely tie that back to Ah persistency direction I think that's a good leading indicator in terms of how those policies are are doing and and and the fact that we're seeing a really positive.

Friends on a year over year basis. The other thing I would note is it it's <unk> nobody can can protection this as well, but since June yeah. We made some some operational changes within the business and we have seen significant improvements and laughs rates since those changes maybe Bobby.

Want to touch on some of those so the changes that we made.

Absolutely. We we've said before you know we we use data to really help us define process and ultimately make decisions in our book is no different than what we do upfront. So we've been collecting data really for years to figure out how to target you know different risks audit risk audiences on our book and ultimately provide them additional value city.

They'll stick with Slack road and we've seen we made some pretty material changes in June and July as Ralph alluded to and we've seen that'd be really impactful on how we treat that population and we will use the same datasets that we have been using on our new model during O a P and we we.

<unk> that that could be extremely impactful as well and to be clear. We don't have that in any of our models. That's that's purely kind of upside for us, but but we do we have seen the impact of different treatment plans that we do with certain risk pools of our population.

Okay fantastic. Thank you so much.

Thank you there are no further questions at this time I'll turn the call back over to him Dangerfield, that's living room or.

Well. Thank you all we appreciate all of the interest and fly quote and all the great questions I'm Gonna close by restating, our excitement and confidence in our position in this rapidly growing sector are really given the quality and the profitability in the long term durability of the model. We built we we do <unk>.

Back to continue to deliver a high quality results were very encouraged <unk> about the trajectory that we are seen in a T.

It's a nine day P. It's I think it's easy to say that we've never been is well positioned as we are right now for growth. So I also want to thank all of our dedicated so I quit associates, who work tirelessly everyday to provide Americans the protection that they need so thank you all again for joining and we look forward to.

Talking to you again this winter.

This concludes today's conference calling you may now disconnect.

Okay.

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