Q4 2021 SelectQuote Inc Earnings Call

Yeah.

Welcome to select coats fourth quart entering conference call all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press.

Our followed by the number one on your telephone keypad, if you would like to withdraw your question press the pound key.

It is now my pleasure to introduce Matt Gunter select quote Investor Relations. Mr. Country, you may begin the conference.

Yeah.

Thank you and good afternoon, everyone welcome to select.

I stopped fiscal fourth quarter earnings call before we begin our call I would like to mention that on our website. We have provided a slide presentation to help guide our discussion. This afternoon. After todays call. A replay will also be available on our website. Joining me from the company I have our Chief Executive Officer, Tim Denker and Chief.

<unk> quote and shall officer RAF sedan.

Following <unk> Tim in RASK comments today, we will have a question and answer session in order to allow everyone. The opportunity to participate we do ask that you limit yourself to one question and one follow up at a time and then fall back into the queue for any additional questions.

As.

<unk> on Form 10-K, and other filings with the SEC.

Our consolidated net income totaled $131 million or <unk> 79 per share.

Is up $50 million compared to last year.

Ralph will detail our guidance for full year 2022 in a minute, but we expect continued strength in our core senior business, including a strong year end run rate for our select Rx business, which is just the start of the significant return potential we see in our broader population.

<unk> health strategy.

Additionally, we will provide some detail and context on persistency impacts and our recent cohorts and some measures. We are taking in 2022 to mitigate tail adjustment in future periods. Overall 2021 was a landmark year for <unk>, both in terms of aggregate revenue and EBITDA growth.

And because of the unique opportunity we have created through population health.

Let's start our review with our full year consolidated results on slide four we grew revenues by 76% or $406 million and have now achieved a compound annual growth rate of 67% over the last two years.

First of all we still see ample runway for continued growth.

Turning to EBITDA, we grew by $74 million over the past year at a margin of 24% as we've outlined since our IPO. Our focus is on EBITDA dollar growth over margins in the near term.

As we'll discuss in a moment or 2022 outlook reflects our continued growth.

Including our investments in population health, which we expect to scale and add EBITDA as we exit the fiscal year.

If we turn to slide five let me give a quick overview of a few of the primary kpis for a strong year in 2021 as mentioned we grew both revenue and EBITDA significantly on top of a strong year in 2000.

And our senior business, we grew both submitted and approved Medicare advantage policies by over 100% and maintained strong unit economics with a three <unk> revenue to CAC ratio.

We operated in 2021 with over 1100 average productive agents, which is up 75% over last year and is all the more.

Impressive given our ability to navigate the pandemic and a remote work environment.

As we've noted in previous calls our ability to execute remotely is highly encouraging and opens new hiring options for our rapidly expanding platform and in fact as we look ahead to 2022, we are pleased with our hiring progress to date, which should drive.

Another strong year of growth.

Lastly, our Ltvs and our senior segment ended the year at $1260, which is down 2% compared to a year ago as mentioned earlier, we're going to provide some additional context on recent persistency and lapsed trends, we're seeing with certain cohorts, but more importantly, we're also going.

To detail the strong returns, we are generating and the same cohort.

On that point, let's turn to slide six as many of you know we conducted a study with investors and our analysts to determine what would be most helpful. In analyzing our results.

Message back was loud and clear.

Being able to see actual cash collection.

<unk> trend relative to our modeled LTV revenues is important to tracking our success.

As a result, we have produced the views on this page to help give context, the cohort level and we plan to update these for you on a periodic basis.

And each of these charts, we are showing a series of lines that represents cash collection curves over.

Overtime and the expected IRR.

The Blue line represents our original LTV at booking of the cohort the Orange line represents the current trend, including the tail adjustment taken in 2021 and the Gray line represents a potential tail adjustments in 2022 that Ralph will detail in a minute ulta.

Ultimately we hope.

This disclosure is helpful and provides insight and context to trends in the business and what they mean returns.

Before I describe the trends let me note that not every cohort is the same and the drivers of actual cash collections include a wide range of factors such as persistency carrier mix plan options Commission structure.

<unk> and things like AEP OUP in any sep's each of these factors contribute to persistency throughout the life of a policy.

So with that let me give some detail around each of our last four cohorts as shown on this page if we start on the top left and move clockwise you can see that our 2017 cohort is performing above our original.

Model and our 2018 cohort is largely performing in line with our model.

Both cohorts are currently projected to earn IRR in excess of 20% and best yet both are already realized IRR of around 30% and 10% respectively.

At the bottom left of the page. So let me describe our 2019 cohort.

Which we have discussed this year the larger tail adjustment taken in 2021 was primarily driven by lower than expected persistency tied to the introduction of ODP.

As you can see our original IRR expectation for the 2019 cohort was 45% and as a result of our adjustments to date expected IRR is now trending to.

39%. Additionally, we would note that the current realize the IRR and the cohort is already 13%.

Now if we turn to 2020, we are seeing the same types of pressure impact this cohort, but to date, we have had enough constraint to offset this pressure that said we have utilized a significant portion of our constraint due.

Due to lower than modeled persistency as a result, our fiscal 'twenty two guidance contemplates the risk of potential cohort tail adjustments, which would impact the cohort as depicted by the Grey line on this chart regarding.

Regarding the 2020 cohort lower persistency was driven primarily by the introduction of ODP again for context, our adjusted.

The trend for 2020, assuming Intel adjustment next year would still generate an IRR of 24% compared to our original 28% expectation.

So if we turn to slide seven let me talk about what these tail adjustments mean relative to our view of the business and our strategy going forward.

Bluntly our strategy.

As largely unchanged markets are fluid and have been throughout <unk> 36 year history as a company. We have built a model that embraces change and adapt to rapidly changing markets are not a new challenge for us and we remain confident in our execution against the large and long tailed opportunity in fact, we view 2020.

One is a landmark success for the company and as Ralph will outline we see another strong year of growth ahead in fiscal 2022. So why are we so confident the short answer is that despite a fluid market returns. We are generating are extremely attractive to be crystal clear we model. Our LTV revenue is based upon.

The information from our most recent cohorts and apply those trends to our upcoming season.

It is a formulaic process, but the fact is we also face a fluid market and experienced variability in persistency early in cohorts from year to year based on the factors like the ones I discussed just a second ago.

As we see it.

Sponsor ability to shareholders is twofold as we grow in this dynamic market.

It is our job to provide detail and context on trends driving our returns which is our intention with the new disclosure on the previous page. Additionally, as you can see on the table here, we are showing a range of return outcomes based on different persistence.

The scenarios on the left most of the table, we are showing scenarios with cumulative outperformance or shortfalls in persistency compared to our original LTV assumption for our 2021 cohort.

On the right side, we're showing the resulting impact on IRR in revenue.

To use the bottom case in the table.

Or we could experience a 10% Miss in persistency and every year of renewal for the cohort compared to our original model and still generate an IRR in the high teens for reference a 10% shortfall in persistency every year is a very stress scenario for this cohort, especially as it already assumes lower persistent.

System sales.

And the fact that we generally see lower variability in the middle and later years of the cohort.

As I noted before this context has been difficult to discern from our results in the past and we are committed to sharing more detail about our cohort performance and returns going forward.

So on to our second responsibility to shareholders.

Which is to invest your capital at attractive returns as you saw on the previous page select dose cohort irr's are highly attractive and compare very favorably versus major investment classes.

These high returns paired with a large and long tailed addressable market or would have us so excited about the opportunity, especially given.

Given the strategic advantages and differentiated approach, we take to the business.

To that point, let me shift gears and talk about another engine of growth for select quote and population health on slide eight.

As a reminder, we formed population health because of the unique position within the health care landscape as we market and speak to an important and growing.

<unk> population of American seniors every day.

Like what has the opportunity to leverage our connectivity and marketing efforts with these customers to provide much needed services such as high touch medication management Pharmacy program health risk assessments and care coordination services with leading health care providers, including senior focused primary.

Care behavioral and home based care.

Additionally, we are aligned in this effort with carriers and believe through data, we are helping carriers make a significant impact on avoidable medical cost.

There is a significant revenue and return opportunity for select quote with attractive cash flow dynamics through population health and most.

Primary <unk> our efforts in population health serve to improve the lives of customers and also benefit our health care insurance partners here.

Here on this slide we want to provide an update on the strong early uptake and momentum we are seeing in population health initiatives and offerings to date when.

When we discuss population health membership with consumers.

Imports about 80% are choosing to opt in representing around 1200 opt in to each day on the same consumers, we're conducting health risk assessments for over 85%, which provider carrier partners with valuable patient information to help them better coordinate care.

Turning to the right side of the page for the.

<unk> Rx business, we have seen a three times increase in the number of daily enrollments since we acquired the platform.

Our opt in rate for target customer is currently around 70% importantly around three quarters of all the customers we engage with our currently taking eight or more monthly prescriptions.

This data illustrates.

Illustrates a clear need and opportunity to impact health outcomes for seniors who need it most.

The takeaway here is that there is real value in what we can offer our base of senior customers and the early results are encouraging.

Longer term it is clear to us that the secular shift in outcome based health care is happening and select quote through.

Select dilation health will be an increasingly important partner for carriers and providers given our unique connectivity with the end patient.

On that point, let's turn to slide nine where I'd like to share our vision of how select Rx and population health more broadly can impact our unit economics and returns.

On the left.

Poppy fee. The makeup of the revenues we generate for each approved core policy. Today. Currently the majority of our revenues are made up of commissions earned through our core Medicare advantage and Medicare supplement business.

We also have some ancillary product commission revenues and revenues from production bonuses advertising and revenues from health risk assessment.

If you can on the right our medium term expectation is that rising adoption of our select Rx and other population health initiatives have the potential to increase our revenue per approved core policy to approximately $2000, which is more than a $500 increase from today.

First of all the return on our investments at.

This should be highly attractive and should improve our future cash flow profile <unk>.

Additionally, we can drive higher revenue dollars on the same marketing spend which should significantly increase the IRR that we showed you earlier, while helping consumers navigate the complex health care journeys and it's important to remember that with our diverse.

These service lines of business and the significant customer demographic overlap between lines of business like senior and final expense our focus on cross selling continues to increase.

<unk> forward, we will provide additional visibility into these global customer economics as thats increasingly how we view and manage our business.

Lastly, while not included in this illustration select Rx and population health make <unk>, a more important partner strengthens our tie to both customers and carriers. We believe these initiatives should make a meaningful impact on our customer retention for the simple reason that we are improving their experience and health outcomes. We can do this.

Given our unique ability to match and maximize the utilization of their policies and planned benefits better service and experience drives better outcomes and better retention. It's a simple concept, but it takes our level of data and connectivity to execute.

With that let me turn the call over to Ralph to review our <unk> results.

Well as detail our outlook for 2022, including our LTV assumptions as well as our expectations for select Rx graph.

Thanks, Tim I'll start on slide 10, with our consolidated results Tim.

Tim has already reviewed our full year results with respect to the fourth quarter, we generated 100.

$88 million of revenue and $21 million of adjusted EBITDA.

Revenue grew 33% and adjusted EBITDA declined 47%.

Revenue growth was driven by our growth and our senior business and final expense business somewhat offset with lower revenue in our auto and home segment driven by the strategic decision we made towards the.

The end of last year to pull back on some of the growth in that segment.

Adjusted EBITDA was lower than last year, which to be clear was always expected and part of our guidance from the beginning of the year. This is driven by the following items in our senior Division. We did not have a special election period. This fourth quarter like we did last year, which impacted.

That agent productivity and the efficiency of marketing, we also kept more agents and our senior division and its been hiring agent classes for AEP earlier than we did last year.

The investments in population health and select Rx also drove lower margins relative to last year, which we outlined in our last earnings call.

In.

Our life Division, our term life business increased margins slightly but for final expense, we significantly ramped up new agent hiring during the quarter and that combined with some product changes from our carriers impacted conversion rates and margins for the quarter.

For our corporate segment, the increased public company costs and investments in population.

<unk> House, specifically on the technology development side drove higher costs relative to last year. As a reminder, a lot of the spend is to make sure. We're in a position to take advantage of the incremental volume we see in AEP to sell these services.

If we take a step back and think about the quarter relative to our expectations. The.

The quarter did come in a little lower than we originally expected we.

We did have higher N a production driven by higher than anticipated agent productivity and we also saw strong demand in inside response.

R N a cohort tail adjustment, which we discussed last quarter was in line with our original expectations. These items were offset.

All set by some year end true ups to our provision we will get into this in more detail on the next few pages, but we have seen higher new and renewal intra year lapse rates and our senior business, we anticipated that after OSP, we would see lower lapse rates, especially relative to last year as we didn't have an S F.

You've heard this year, however that did not happen and elevated lapse rates continued during the quarter.

As a result, we did have to increase the provision for these items and did make a year end true ups during the quarter.

Turning to final expense, while we grew significantly year over year production did come in lower than our extra.

Expectations, driven by the factors I've already discussed above.

Lastly, our corporate costs came in slightly more favorable than internal expectations.

Turning to slide 11, and our senior Division.

Tim noted we had a strong fourth quarter. We grew our total approved policy is 43% and our MAA.

Electrolysis is 54% and it's worth noting that this growth was compared to last year's fourth quarter growth, which included in S. E. T again, emphasizing kim's point that the growth opportunity remains significant and long term.

With respect to M. A L. T V's, we always anticipated M. A L T D for the quarter.

We're going to be down one or 2%. However, the yearend true up to our provision for entering your lapse rates impacted the fourth quarter M. A LTV, which ended up being down 11%. However, the right way to look at this as really on a full year basis as the true up reflected full year activity on a full.

Year basis M. A ltvs were down 2% without the provision true up full year M. A L. T v's would've been flat, which is what we've been guiding to most of the year as discussed in the past. This was a result of lower persistency offset by higher rates.

On slide 12.

Through our investor perception.

Perception study, we heard that investors want more information and education about how persistency works and its impact to cash flows. This slide provides some additional context about how cash flows progress in our cohorts.

The chart here depicts our modeled cash flow and IRR progression for the most recent 2000.

'twenty one cohort the.

The Blue bar represents all the costs associated with the senior division in fiscal year 'twenty. One all of that is incurred in year one.

The orange bars represent the lifetime revenue booked for the fiscal 'twenty, one cohort and the timing of when that revenue should be received from a cash perspective.

The black dotted line represents the cumulative lifetime revenue collected at different points in time.

The Green line represents the cumulative cash flow at different points in time and finally, the dashed Gray line represents the IRR at different points in time.

A few things that we'd like to call out the cash flows to select quote.

A very front end weighted we collect approximately 45% of our total lifetime revenue in the first year and by the third renewal we have collected roughly 75% of the lifetime revenue. This.

This is important because collecting that cash early has a big impact on the IRR.

Leaves fewer and fewer dollars at risk to persist.

Assistance in the out years, and there's less and less variability in the out year persistency rates.

We break even on the investment to write the policies within two to three years and that's the total cost of the investment within the first year or so we've already recouped almost all of the variable marketing expense to write the policies.

So that has a one year payback period.

My renewal year, three we have collected around 75% of the lifetime cash.

We would already expect to be at an IRR in the low teens and it should only grow from there based on the initial modeling the total IRR for the 2021 cohort is expected to be around 26.

Per SEC.

Lastly, even if we do experience some variability in persistency the predictability of renewals tends to increase as cohorts age and there are fewer and fewer renewal dollars at risk.

Moving on to Slide 13, we wanted to update the chart that we've shown to you in the past which is the progression.

Of how our historical cohorts have been performing.

For those of you who are new to the slide let me ground you on what Youre looking at.

We've shown the cost and expected cash flow for each cohort broken out into cashews collected so far and cash we still expect to collect.

The Orange bar represents total senior.

Division cost the great part of the revenue bar is the cash we collected in the first year.

The Blue bar is all the renewal cash we've already collected.

Yellow bar is the remaining cash we expect to collect this year based on the policies that they have already renewed and lastly, the green bars, the future cash we expect.

To collect on future renewals.

We've added two lines to this chart, a black line, which shows where the top of the Blue line was last year. When we showed this chart the.

The difference between the Black line and where the top of the Blue line is now is the cash was collected for each cohort in the last 12 months.

The other line we.

And it is the Green line shows where the top of the Green Bar was last year. When we showed this chart.

The difference between the Green line and where the top of the Green Bar is now is the impact of cohort tail adjustments on provision true ups. We took this year.

If we focus on the 19 cohort, which we spoken about multiple times over the last.

Last year, well that cohort has underperformed relative to our original expectations and we have taken some cohort two adjustments that cohort has already recouped all of the costs of running those policies. It sits at an IRR to date of around 13% and any incremental dollars, we still expect to receive should only.

Add to that IRR.

As Tim alluded to earlier that cohort is still on track to produce an IRR in the high 30% range.

We plan to provide this chart annually. So you can track the progress of each cohort and how theyre progressing.

Turning to guidance for fiscal 'twenty, two we currently expect revenue to.

To be in the range of 1.25 billion and $1.4 billion, which would represent revenue growth of 33% and 49% year over year.

We expect adjusted EBITDA to be in the range of $255 million in Q1.

And $85 million, which would represent adjusted EBITDA growth of 12% and 25% year over year.

We will go into this in more detail on the next few pages.

Included in our guidance next year, we have a $65 million placeholder for the potential risk of a cohort tail adjustment next fourth quarter.

If you exclude the impact of this potential cohort tail adjustment the implied revenue range would be one.

Air B, one 5 billion to $1.465 billion and the EBITDA range would be 320 million to $350 million, representing growth of 40% to 56% and 40% to 54% respectively.

One thing to note is that we have made the decision to move.

Three policy level persistency historically, if we had a customer that was switching their policy, but staying with the same carrier we were tying the cash from the new policy to the original policy that was lapsing. So that type of activity did not impact persistency move.

Moving to policy level persistency aligns with.

Move to carriers think about it and there's less reliance on getting timely and accurate information from carriers, which is proving more and more difficult.

As our recapture rate has been increasing the number of same carrier switzer policies has increased dramatically and we believe this change should result in more accurate estimate of persistency going.

Forward.

This change to simplify things substantially for every policy, we sell we will book first year and renewal revenue on every policy and that policy falls off then it lapsed policy.

Going forward. This switch should be net revenue neutral as M. A LTV per policy should come.

Come down around 6%, but we should recognize 6% more policies.

For historical policy is already sold this change has a net zero impact and does not change the underlying economics of the business in any way. However, it may trigger slightly higher and earlier cohorts.

Investments as future policies sold will not get tied back to replace lapsed policies, but overall, we should be recognizing more policies, which should offset this.

With respect to the Calgary <unk> of our guidance. If you think about the midpoint of our range for revenue the cadence of revenue should be around.

<unk> sent in the first quarter around 40% in the second quarter around 30% in the third quarter and in the mid to high teens for the fourth quarter.

From an EBITDA perspective, we will likely have losses in our first quarter of between 50 million and $55 million in the fourth quarter of around 10 million to $15 million.

Temporary second quarter EBITDA margins should be in the high thirties, and the third quarter margins should be in the low thirties.

If we move to slide 15, we can walk through some of the drivers of the fiscal 'twenty two guidance.

If you assume the midpoint of the range that would imply $270 million of EBITDA for next year.

So the core senior business, excluding select Rx and the potential risk of cohort tail adjustments, we're projecting a $126 million increase in EBITDA.

We will detail the major drivers on the next page.

Turning to select Rx, while these figures will be embedded in a senior numbers, we did want to.

Some more detail on our assumptions for the year as we scale that business. We currently anticipate generating approximately $50 million of revenue from select Rx and an EBITDA loss of around $5 million, we were ramped new members significantly during the course of the year and I will review a separate slide on that in a few minutes.

Provide next item is the cohort tail adjustment risk for the fourth quarter of next year of $65 million.

Received data from carriers later this year than we have in the past.

That is a bit of an anomaly and as a result persistency from the January renewal event has declined over time as we've gotten updated data.

In addition, we have experienced higher first year and renewal lapse rates this year.

While this didnt really impact the 'twenty 'twenty cohort this year as the constraint, mostly offset the pressure on persistency as we look towards next year. There is a potential that the constraint maybe used and that would trigger a cohort tailored.

In addition, we on boarded a new carrier last year, we've had some onboarding and data integrity issues with this carrier does have lower persistency than other carriers, but they have also been very constructive in working with us to build the relationship.

They value the volume that we were able to deliver for them.

And we are working proactively together to try to offset some of the teething problems, we've had with them.

They're also very aligned with the value we can provide to population health and select Rx when we expect them to remain a key partner, having said that there's a risk that some of the policies. We sold last year may generate a cohort tailing adjustment.

As early as next year.

Lastly on this topic, while there may be another cohort tail adjustments. The 19 cohort next year it should be smaller than this year and there are less and less dollars remaining in the tail and the persistency in the out years is less volatile.

We've shown that even with potential cohort Taylor.

Adjustments that IRR from each of these cohorts should still be very attractive.

Moving on to our life Division, we expect to grow EBITDA $17 million. This will be all be driven by our growth of final expense, we expect our term life business to be flat year over year.

We also expect our auto and home business.

Wow.

Lastly, our corporate expenses are expected to grow $31 million year over year and in line with our revenue growth. This is driven by higher cost to scale, the business, including recruiting costs and incremental technology development costs as we invest in population health and select Rx.

Turning to slide 16, if we look at our senior Division specifically.

Projecting approximately 60% revenue growth, 24% EBITDA growth and margins of 26%. If you strip out the potential risk of the cohort tail adjustment that would imply approximately 69% revenue growth 50.

50% EBITDA growth and margins of 30%.

The big assumptions embedded in this guidance are a 72% increase in MAA submitted policies driven by an 84% increase in average productive agents for the year offset by a 9% decrease in agent productivity.

The decline in agent productivity.

It's driven by a higher mix of flex versus core agents relative to last year.

Additionally, it is worth noting that the last two years, we have significantly increased agent productivity in years that we grew our senior business by over 100% each year.

Turning to M. A L T v's actual persist.

In 2019, and 2020 has trended below initial model.

While the returns remain highly attractive as Tim noted, we are taking proactive steps to mitigate tail adjustments to our model and future cohorts, specifically beginning with fiscal 'twenty, two we will increase our constraint from 5% to 6%.

Three our assumptions for first year and renewal provisions.

Additionally, the persistency assumptions and our LTV model will remain based on actual weighted average trailing 36 month data and the continuation of lower persistency is captured next year.

Put another way the assumptions in our LTV.

And even become progressively more conservative.

We expect M. A L T v's to be down 8% for the year.

6% of this impact is due to the switch to policy persistency, which to be clear has no impact to revenue as the lower LTV should be completely offset by a 6% increase in <unk>.

He has recognized that.

The remaining 2% of this impact is due to a combination of lower policy persistency higher first year and renewal provision assumptions and our higher constraint assumptions somewhat offset by CMS Commission increases and higher commission rates in specific carriers that we have updated contract.

Policies with.

We anticipate a rev to CAC multiple to remain around three ex for the year and we expect that to grow over time as we leverage the platform to sell additional products and services.

Overall as Tim noted this is an extremely attractive business with returns that we will continue to pursue.

In terms of strategic advantages and ability to scale in the long term opportunity.

To be sure our model assumptions are moving with the market, but it's a market that we remain excited about.

Lastly on slide 17, we are very pleased with the early traction and demand we're seeing for select Rx as we ramped.

Given our X next year, we wanted to provide some more visibility into how we think about that.

As noted earlier, we're expecting total fiscal 'twenty to revenue of $50 million and an adjusted EBITDA loss of around $5 million. However, we will be ramping the business. During the course of the year, while we expect to lose a mom.

Select out of EBITDA in the first three quarters, we anticipate breaking even in the fourth quarter and ending the year with approximately 25000 members.

If you look at the run rate financial impact of those 25000 members that would represent $170 million of annual revenue and $25 million of EBITDA.

Because of the ongoing cost of service to clients, we will not book lifetime revenue on this line of business. However, the lifetime revenue of the new members added in fiscal 'twenty, two is expected to be approximately $370 million.

On a standalone basis, we are big believers in the profit opportunity.

And the value creation associated with leveraging the leads we've already acquired on the distribution side of our business to build this unique high touch medication management pharmacy program. Additionally, our core senior business should benefit from select Rx and our other population health initiatives as we drive education and better features.

Utilization for our consumers.

Ultimately select quote becomes an even more valuable partner for our customers and carriers.

We expect there should be a positive impact on retention and avoidable medical cost.

Lastly on select Rx It is worth noting that this business has a very attractive cash flow.

Ctrip and we expect it to be a significant source of cash as we ramp it over the next few years.

In fact, one of the requests we've had from investors over the last year is information about when we will become cash flow breakeven. We believe there's a path to become cash EBITDA positive in fiscal 'twenty four and have paused.

While cash from operations in fiscal 'twenty fives, depending on their respective growth of select Rx and our core senior business, we plan to share additional multi year views of this as we get more visibility into how we are scaling select Rx.

With that I'll turn the call back over to Tim for some final thoughts Tim.

Positive before we turn to questions. Let me quickly summarize on slide 18.

First our fiscal year 2021 exceeded our expectations, we outlined at the beginning of the year and validates our view that our technology enabled agent led strategy is built to execute against our long term growth opportunity we see.

Thank you and have us.

Second the returns from our senior business remain extremely attractive despite lower than expected persistency in our most recent cohorts. These types of returns drive significant value for our investors and we plan to aggressively pursue them.

Third we are committed to providing leading disclosure to our investors.

See in front of the analysts to help contextualize trends in our business as our cohorts season.

Fourth our population health initiatives, including select Rx represent an exciting extension of our business and should deliver attractive returns for our company and shareholders with that let's turn to your questions operator.

Thank you Sir we will now begin the question and answer session. If you would like to ask a question. Please do so by pressing star one on your phone.

Please press star followed by the number one when your telephone keypad. Please note to limit yourself to a question and a follow up.

Our first question is from Jeff Garro with Piper Sandler Your line is open.

Yeah. Thanks for taking the questions, maybe we'll dive into the guidance and some of the drivers there.

First yes.

Interesting that you guys have factored in this possible negative tail adjustments.

So maybe just some more comments on the likelihood that you'll need to use the assumption and then just wanted to ask if the $65 million if that represents a base case scenario or if there's any situations in any scenario, where the magnitude of that could end up higher.

So maybe I'll take that.

No I think.

Clearly, if we wanted to be proactive and highlighting them certainly information around cohort scale adjustments right.

I think there was some confusion last quarter and we want to make sure of is crystal clear sort of what's embedded in our guidance and what we're saying.

$65 million as a placeholder for.

The potential risk of a cohort tailing adjustment next fourth quarter, because that's when we do that.

M a analysis.

And it's based on what we're seeing right now you know, we have experienced lower persistency and higher lapse rates.

As we anticipated and so that's kind of.

The fix it into that number and as we learn more about the lapse rates and persistency.

We'll be proactive about communicating what were seeing and its changes need to be made to that estimate to updating those changes.

Got it that's helpful.

I'm sure there'll be more questions on persistency and tail adjustments.

It's fact, but I'll use my follow up for another topic and ask about hiring some peers have talked about hiring challenges I know you guys have been proactive in an early and more year round effort. So just curious where you are relative to your goals.

What you've been seeing in terms of resources needed to.

Individuals' retention of your current force and.

And then just overall, what you see in expected demand to fuel the outlook you have in the the need you have on the hiring front.

Yeah, Jeff This is Tim Great question alternatives.

A traveler to our Seattle Bill Grant.

Provide the outlook, where we're up bill.

Yeah, Great question.

While we still have some hiring to do we are very confident and pleased with where we are given some of the changes.

In the market. So we feel very good about that.

<unk>.

The labor market is certainly different this year, but I think our recruiting team and operational team did a great job working to make the job more and more attractive in terms of some of the ways that we tweak the compensation and when I say tweaked Mick.

Mixing kind of the variable component with the fixed component.

We're able to come out roughly.

Turn it ups neutral, but makes a job we think substantially more attractive with the current labor market. We also think certainly you know we're uniquely positioned in terms of the percentage of the people. We can offer full time jobs on the backend.

Our other business lines, so I think that that sets us up very well as it.

Coins too.

And it kind of turnover with with our our groups, especially the groups that we kind of pride ourselves on what the level ones and level twos.

Not seen any material impact at all our attrition remains very strong and we think that just speaks to the attractiveness.

Model and our job as it relates to those people's kind of happiness with the company.

<unk> ability to make a really good wage so overall I.

I think two parts feel really good about where we are with AEP team certainly had to adapt but we're really confident there and then as it relates to kind of our core.

Armed with attrition feel really havent felt it there so.

Great. Thanks for taking the questions.

Okay.

Your next question is from Frank Morgan with RBC capital markets. Your line is open.

Sure.

Folks good afternoon appreciate all the details of embedded in your guidance.

Just wanted to pick up on one of the things you mentioned at the end of around the 24049 I think cash flow.

Operator positive in 'twenty.

When you think about.

The next couple of years getting.

Going.

And given the recent trends what are your levers that you can pull in terms of I guess number one do you need access to external capital between now and then and then what are the levers that you can pull between now and the end to drive better better cash flows will be my first question.

Yeah I think.

We have plenty of cash available to achieve our goals outlined for this fiscal 'twenty two guidance and we do plan to draw down an additional 145 million of term debt sometime during the year.

We are we secured that as part of our term debt agreement last year.

And in the back half of the year, we probably will we'll draw down on that with respect to future capital raises I mean, we may need to raise additional capital depending on how fast we're able to scale select Rx and the relative growth of senior and so as we have more information about.

How those businesses are scaling certainly on the.

And to get the Rx side, now that will influence sort of how much and when them, but again, we will be proactive about explaining that.

Got you.

I'll change gears on my follow up just the timing of that $700 of incremental per member related to population health.

On the slide.

Probably a tough one to really <unk>.

Project, but what's your best guess I mean are we talking about over the course of the next year or two or are we talking maybe three to five years out before you can realistically expect to see that kind of contribution. Thanks, Frank Frank Great question. This is Tim the goal of that.

Particular.

View is really to help Orient, how you should think about the business over time and what we can do with our platform beyond just MAA LTV certainly we think historically thats been the right way to look at the business, but overtime, we want that to evolve and that has a lot to do with the very.

<unk> unique.

We have the diversified platform.

Alrighty around cross sell we're seeing a lot of synergy between our senior and final expense.

And as I think you are alluding to obviously population health and select Rx. So we.

We think over time, we're gonna be we're highly confident that we can build upon.

What are today.

Model that existing very attractive returns.

Layer on additional revenue from pop health select Rx, we think that's very powerful to answer your specific question. It does indeed depend upon the ramp of select Rx, but we think that could be achieved inside the next two years.

Okay.

Your next question is from Elizabeth Anderson with Evercore ISI. Your line is open.

Hey, guys. Thanks, so much for the question.

Our data was super helpful answer thank.

And my question is I guess, maybe my child sauce I thought how do you think about like what the optimal growth rate is for the core senior business in and that's how to think about it you know the expenses that you would incur and in hitting our given our growth rate I'm just trying.

You said that you have maybe you think about it maybe for 'twenty two or a few of US I wanted to just talk about it more broadly that would be helpful. Thank you.

Yes, maybe I'll start just kind of more broadly and then ask Rob to talk about it financially but.

Overall, we have given a lot of thought around the guide in a row.

The growth rate for next year, and we feel that the business fundamentals are still very strong same market opportunity that we decided to get into over a decade ago continues to be there certainly the market is evolving that and we've tried to reflect more conservative assumptions into our financials.

But but ultimately.

It Burns on invested capital remain highly attractive and we're going to continue to.

To pursue that.

We think that you know population health is another lever for us.

As we enter into the broader healthcare services landscape, a huge market opportunity again, leveraging the existing.

Listing distribution spend that we have.

And we think that.

It was still yet to be proven it's very logical from our perspective that it might indeed also assistant persistency. So really it's the relative growth rates of those two things Ralph do you want to comment specifically on how we're thinking about SR growth rate.

Over the medium term.

Yeah, I mean, I think we've obviously grown the business pretty pretty significantly over the last couple of years, a 100% last year, we're looking at sort of 67%, 70%. This year I would anticipate that growth.

Will go down over the next several years.

Ultimately, we're trying to maximize.

<unk> sort of.

Absolute revenue in absolute EBITDA dollars, while maintaining attractive IRR.

Returns.

And I think we're.

There's lots of levers to be able to do that I do think as Tim mentioned that one of the biggest drivers is going to be select Rx and just how fast.

We're able to scale that business.

But I think relative to the senior business I would expect growth to come down from where it has been beyond sort of fiscal 'twenty two.

Got it that's very helpful.

And then maybe in terms of the opportunity within select health and population health can you talk about like the percentage of the carrier.

Fast Youre currently working with the Washington, your penetration with products with those carriers instead of how you see that shifting maybe in 'twenty, two and then beyond that.

Sure Bob would you like to address that.

Yeah.

Well I'll touch on more of the penetration rate within the people that we deal.

Because carriers and us and we work with some of our very large carriers on it but.

Are not disclosing who those are.

As far as market penetration rates within the value added products that we're seeing we're seeing extremely strong.

Penetration rates on eligibility, we shared some that are getting all your select our acts as an example.

That when it's eligible which we were very careful in our eligibility we want to serve who it's really designed for which is folks that are on SEC.

Six or more drugs, and we had a limited footprint as far as states. When we started and we're extending that quickly we had 70% take rates on that number.

We had 70% take rates on that product as we have expanded so we feel really strong about that the actual demand for the product itself has been greater than what we anticipated. So we feel good about kind of what we can do from there or this is more now down to the operational and logistics side of things. So that we can responsibly scale back.

Thank you.

Yeah.

Okay.

Your next question is from Jay Lenders Singh with Credit Suisse. Your line is open.

Yeah. Good afternoon. This is Carlos colon, then for Gilenya and I appreciate all the data points on select Rx.

The question I had is.

Select our estimates initially is coming at a relatively lower margin than the other popular population health related investments. So just trying to get a sense of how you guys are thinking about long term steady state EBITDA margin outlook for the company also is there a change in view given some of the developments.

Post the IPO Cup last year.

Yeah, So I think with respect to our select Rx specifically.

You know it has huge revenue potential and huge EBITDA potential.

Even if it's at slightly lower margins I think once we scale.

Sure.

Margins will settle out instead of the mid to high teens.

And then I think about that business and just.

How fast we're able to scale it as if we're able to leverage the existing infrastructure and marketing spend that we're already spending on the distribution side to really grow that business and so it's not like you have to wait.

Three or four years to sort of get to profitability or to get to sort of some kind of stay.

Stable margin profile I think.

By the end of this year, we will have scaled it such that it is a it should be breakeven or profitable in the fourth quarter.

And then margin should sort of be in the mid to high teens.

And to the east.

Sent that again it grows from there there are opportunities to leverage drug pricing to potentially increase margins even further.

Based on how fast we scale, so I'm very very attractive economics.

A huge sort of absolute revenue and EBIT opportunity.

Yeah, just to add to that.

Okay.

<unk> point earlier, I think consumer demand.

For for this medication adherence.

<unk> is has been better than what we expected.

Again, we have MA customer set that's right at our fingertips. In addition connectivity with the end consumer.

It eliminates kind of a chase process. It plagues a lot a farming model so.

I think.

It's obviously an opportunity for significantly higher gross dollars in lifetime earnings in this type of model.

Okay.

<unk>.

Just a different topic then.

I know you guys.

Just on the agent and the labor market, but I was kind of curious if that makes.

Yeah.

Select quote more keen to invest in its e-commerce platform to reduce the dependence on agents in general just curious on that.

Yeah.

I think that.

Our model continues to be the consumers.

Want to engage with us would like to talk to an agent.

We see that through basically.

Comparing our conversions of folks that are on it did go down a digital path versus.

Okay.

An agent path.

Regardless of how you kind of slice. It you use dollars to drive traffic to our site and our model is look we want to make the best use of those marketing dollars and to date.

We have seen dramatically better.

You know results bike.

By connecting those folks with an agent as opposed to it in India in digital path at any point, where we start to see in our testing that folks are.

Converting at a higher level on a pure digital path you know we're in a position to do that.

But right now it's <unk>.

Not as good from a revenue to CAC standpoint.

You're just not going to see it because the cost per acquisition will go up fairly dramatically by not having the human involved.

Okay. Thank you.

Yeah.

Your next question is from Lauren Schenk with Morgan Stanley.

Your line is open.

Hi, This is Nathan <unk> on for Lorraine.

Thanks for the additional disclosure Super helpful.

Can you just provide a little more color on what you can get is about the environment, that's driving the lower persistency than what you originally anticipated.

And in terms of what Youre doing.

To try to potentially improve that what do you think the risk is given the ltvs are backward looking we continue to heal tail risk over the next call. It two to three years more of a midterm and then in terms of the opt in rates and population health and select our acts really strong kind of an early results do you think you'll be able to see similar opt in rates as you continue to expand.

Expand the.

The growth of those segments. Thank you.

Great question, Nathan I'll make a few comments and turn it over to Bob Grant.

As to some of the reasons.

We certainly see that more customers are switching more frequently and we think that's certainly a function of the additional opportunities.

Is that consumers have to switch plans through additional windows, such as <unk> and <unk>.

Direct to consumer platforms like ours, certainly benefited from additional policy volumes and obviously you see that in our financials, but but it does indeed create additional opportunities for consumers to switch.

And we see that also validated.

And the volume of recapture business that we have that is certainly good for the company, we don't necessarily view it as a competitive element.

And the market are between the E brokers, just more opportunities for consumers to switch we have.

Also a good thing for consumers as the amount of additional.

Investment.

<unk> bye.

Managed care organizations into.

M&A plans, which is a great thing for consumers, but we do see that some consumers don't fully utilize or understand the plan benefits and we want to make sure that that dialog continues with select clubs.

Additional details you want to provide as well as some of the.

And all things we're working on.

Yeah, I think Tim touched on it well as far as the evolution of the marketplace and Thats.

We are seeing a larger and larger demands for utilization of planned benefits and.

Before I think consumers were a bit more patient with getting to those plans.

Operations and through OAP, SVP kind of evolution of the way that the plans can offer ancillary services and then ultimately COVID-19.

Is magnified you underutilization of planned benefits and understanding those plans, which is actually the original reason, we launched pop health supposed to try to help consumers.

<unk> utilized plant benefits more effectively we still believe that that is the core function of.

That business to try to help with planned utilization leading to higher planned satisfaction.

And we are continuing to try to understand our consumer base better and better.

Get that utilization up and then ultimately.

<unk>.

Drive satisfaction, which should drive higher retention, but I just think it's that quick evolution of the marketplace and people getting more comfortable with switching.

That's caused those the persistency.

<unk> events to increase and then again the introduction of <unk> has been a big deal it's great for consumers.

Our choice and it's really good for our overall business, but it did put a lot of pressure on former co.

Cohorts as we've seen more competitiveness within that.

At a time to your second question and then I'll kick it over to Ralph on the utilization of services like population health and things within there as we evolve that ecosystem, we do think.

Based on the consumer demand people do really want to understand their plan benefits better I mean a.

Very very high percentage of our consumers are opting into population health as you can see we are helping educate them on how to utilize their plan benefits and what's available to them and we will continue to evolve that business.

So where.

Adding offerings to that help people with planned utilization, especially with use of data on what's driving the best outcomes, which is again why we made the investment in.

Select Rx and that medication management processes data would say.

Based on data released on business is similar to that Thats publicly available.

We can add that that saves a significant amount of money within medical loss ratios voidable medical expenses. If you can get to folks that are on six or more drugs that are struggling with their their medication management on a day to day basis.

Yeah, and I think.

Going back to your question about future potential for future cohorts of adjustments.

<unk>.

Taking a step back when we set the original LTV for cohort, it's based on actual experience persistency. So it's really not subjective I mean, it's based on experience persistency.

Do put a constraint on top of that.

As part of the calculation.

Since the 2019 sort of cohort.

Cohort that with the introduction of Otp and as MCP election periods.

<unk> been baking in lower and lower persistency as part of the calculation.

And in addition next year.

Also increasing the constraint and we're also increase in the provision for both sort of first year and renewal year lapses. So the assumptions are sort of getting.

Getting progressively more conservative.

We're proactively highlighting the potential for a cohort tail adjustment at the end of this year based on what we're seeing right now but.

Markets are fluid and there to continue to be cohort a tail adjustments beyond this year, both positive or negative.

I think an important piece to keep in mind, though is.

Is that the magnitude of tail adjustments for respective cohorts should decline over time as there is less and less renewal dollars.

At risk to collect and you start entering the curve.

The annual persistency that has less variability.

Even with some of the variability that we've seen over.

The last couple of years in first and second term persistency.

Seen sort of half the variability once you get beyond rental year three.

And so I think that's an important thing to keep in mind.

We're trying to give.

The investment community as much detail and perspective as possible, we obviously don't like the volatility, but we're highlighting.

The cash returns are very good with consistently sort of covered the cost to write the policies within two to three years.

And really all of the cohorts are on track to have attractive returns in the future.

Okay, great. Thank you.

Your.

Your next question is from Steven Valiquette with Barclays. Your line is open.

Great. Thanks, good afternoon everybody.

So a couple of questions here first you mentioned that you're Onboarding, new carrier last year you had some.

Onboarding issues data integrity issues that carrier just to give some context around.

Around that.

You have just an approximation for what percent of the total policies are revenues are related to that new carrier.

And I have a follow up.

Yes, so we.

We've basically been working with that care for the last 18 months or so.

Ramped during the course of last year. It currently represents.

And sort of a high teens mix.

The mix of our business and I would expect it to sort of stay.

I stay at that level for next year.

Okay got it.

And this question is pertains to slide 13 in the slide deck in particular.

I don't get lost in all the colors with the.

Yes.

And I guess with flex that to me on this slide is just that the orange bars.

You are obviously the total senior costs are much larger than the green and blue bars from the prior year or two that's obviously why the cash flow stays negative.

I guess this question came up earlier, but as we think about you.

Towards positive operating cash flow in fiscal 'twenty five.

Is it more just the tighter management of the Orange bars relative to the size of the green Blue or do you improve.

The cash flows from the Green and Blue bars, I'm sure, it's a little bit of both and somebody touched on this I'm just curious if one side is more critical than the other as you move towards that positive cash.

David Thanks, Yeah, I think it's probably a combination of both I mean I think.

Again.

It's really isolating the specific cohorts right. So as we have been growing.

On the overall size of the Orange bars, drawing because we're running a lot more policies and the costs associated with it but you know.

The revenue attached.

Two it is also sort of growing kind of in proportion to that.

Thank you.

We're also collecting more of the cash upfront right. This is about 45% that will increase a little bit next year and certainly as we.

As we scale select Rx I think that'll that'll have an impact.

On the amount of cash, reflecting a promise, which helps as well one thing that I don't think is very well understood is that the.

Yes, there is a working capital dynamic in the business that as you're growing it does require working capital.

There's kind of a delayed impact of that so what I mean is if you think about last year, where we drove.

100%. Obviously there is there is the initial working capital of that first year revenue, but the true impact of working capital associated with growing that fast actually happens sort of a year later or really 18 months later, because it's when those policies are renewing for the first time, if you think about our policy was solely.

In October of 2020, it's really going to affect us having January it's really going to renew for the first time January of 'twenty, two and then we're going to get paid on a monthly basis and so.

That piece is is a pretty significant piece.

Working capital perspective, but just as you slow the growth down.

You know that that obviously helps but it's a little bit delayed in terms of.

Turning the corner with respect to free cash flow from operations.

Okay got it okay. Thanks.

Okay.

Yes.

Your next question.

<unk> from Anna Krzyzanowski with Citi. Your line is open.

Hey, this is great.

Great great. Thanks for taking the question.

Going back to the hiring you've done this year ahead of AEP.

Tinder compensation adjustments made to attract more agency labor environment, We're net neutral.

I'm curious if you could provide any more color on the margin compression expected for next year and in fact, if labor costs and agent productivity on that.

Yeah.

I'm happy to take the rack.

You may want to comment on.

Fewer.

<unk>.

But.

To date, what I mean, just to provide a little more color on that is I think there was a lot of sensitivity around kind of a minimum wage and hour you know I think in the past we've been able to attract folks with kind of a day talking about a total target compensation that was highly attractive.

What we did do adjust really.

Simply kind of a switch those are around a bit I think people were really in tune just because of all the things that were.

Going on in the World and our news. So we were able to do that and keep it cost neutral I would anticipate that.

The bulk.

Of those changes would have been done this year, but we'll continue to monitor it and kind of see you.

You know how the market's reacting to what we're doing but overall I think the most important thing and I think you'd see that through our attrition is that our target comp for people that come on board is highly highly attractive otherwise you would see higher attrition.

And our level ones and twos, which is people that were keeping at a very high level. Ralph do you have anything to add to that yes.

Yes, I think.

So the point about sort of margin compression I don't think we're seeing or expecting to see margin compression relative to the compensation structure. I think next year. We did highlight that we're gonna have a slightly higher.

To flex versus core agents and so for an agent productivity perspective, we're expecting agent productivity to be.

Down sort of around 10% or so year over year and that obviously just weighs a little bit on margins because flex agents are not as productive as core agents Interestingly I think if you look beyond 'twenty two and.

Your mix you know assuming the growth rate will come down.

The mix of core versus flex will also change again.

We probably won't need as many sort of.

Flex agents relative to maybe what we're seeing this year.

Which could change that dynamic so.

It's just a function of.

And that mix of core versus flex at any given giving here, but I don't think the the comp changes that we've made.

In and of themselves are having an impact on margins.

Okay, Great Super helpful thing.

Yeah.

Yeah.

Our.

That question is from Meyer shields with.

Keefe Bruyette <unk> Wood your line is open.

Great. Thanks, I apologize I struggled a little with colors, but I'm looking at slide 13.

And it's.

Interpreting it correctly it looks like the big.

Our lap between the Green line and the Green bar. The 2019 cohort is bigger because the bigger drops and the gap between the line and bar for 2020 am I interpreting that correctly and I was hoping you could explain what's driving that difference in the estimate changes.

Yeah you are.

GAAP you are interpreting it correctly.

So maybe you've gotten your ruler out, but basically it highlights what we've been talking about for the last.

Several months and quarters, which is the 19 cohorts we've seen more pressure there.

It's the cohort that's made up.

The vast majority.

Georgia and sort of the cohort tailor adjustment that we took.

And.

In our fourth quarter fiscal 'twenty one here.

There is a small adjustment relative to fiscal 'twenty two.

But it's also obviously a much smaller percent and the reason for that is that the constraints that we have with respect to physical.

[laughter] 20 cohorts.

Has been offsetting some of the lower persistency.

So that's that's kind of why you see that I think one of the things that we're highlighting for next year is that.

There could be a potential core adjustments for the 20th cohort next year, because it's starting to use its constraint some of the cohorts within that are starting to use it.

I think and so that's.

That's basically the dynamic there.

Okay No that's helpful.

The second question is the timing.

I understand that the magnitude of the lapses is different and bigger than you'd expected is the timing of that any different in terms of I guess when they emerge over the course of the calendar year.

Yes, that's actually a great question I think there's a couple of things that are different or that have been different this year.

I think it's worth highlighting and things actually have changed.

Relative to our expectations earlier on in the year. So let me just highlight a couple of them we've talked about in the prepared remarks, but.

We saw slightly higher elevated lapse rates are the first couple of months of the year, but that can be really noisy and we really don't rely on that data I'm, just because things do fluctuate within the first couple months of the calendar year, we were expecting.

Lapse rates to to basically.

But.

Drop certainly relative to where they were last year, because we had an election period last fourth quarter that we didn't have this year that didn't actually happen and so there was just sort of a continuation of the increased lapse rates throughout the quarter.

And that obviously put pressure on the quarter and resulted in a year end true.

<unk> made in addition to that relative to the January renewal events and sort of the persistency of our policies back to January <unk>.

Normally that is settled by I would say the end of them.

You know at the end of April.

Aaron sorry at the end of March beginning of April.

Europe.

This year, what we found.

Was that.

We continue to get data later and later.

<unk>.

Well into sort of the fourth quarter for several of our carriers not all of our carriers with some of our carriers.

And that actually did change what our view.

Our assistance he was from the January renewal event that dragged it down.

And so that is an anomaly, we've not really receive data as late as we did this year.

And so that's one of the reasons why were you know it didn't really have a big impact on the fourth quarter, just because again with respect to the 2020.

You have to hoard it had enough constraint to offset some of that pressure, but as we're looking forward to next year.

That is something that we wanted to.

To highlight having said that and maybe Bob you want to get into some of the operational things that we're doing to try and sort of limit that kind of dynamic going forward.

Yeah, absolutely. So one we are working extremely close with our carriers to understand.

On the consumer behavior, using our data analytics identifying kind of.

Risk in different cohorts and understand it how to deal with those risks and treat those appropriately which could be different.

Strategies through our CCA that we've always done.

Or increased.

Usage of population health, where we can increase planned utilization increased planned satisfaction also just again partner with carriers to help them understand too what are the greatest risk cohorts and how can we deal with that together so it's a.

Calling as a partnership between us and the carriers and we feel good about actually where we are.

In that data analytics process, and what we are going to do to deal with that cohort. We also see positive trends within recent cohorts.

As far as falloff and early lapses.

Emily.

That is usually an indication of what's going to happen on retention and that's not always but usually so we feel good about some of the efforts that we've made.

So now we've also worked with our carriers on getting more timely and more accurate information. So that we can react to that information quickly and more effectively.

Okay.

Thank you very much.

That concludes the question and answer session for the call I'll now turn the conference back to Mr. Tim Denker.

Yeah.

Thank you and thanks to everyone for your time again, I'll conclude very quickly with just a few key takeaways from.

That's great perspective.

First our strategy and our core senior business remains unchanged. We continue to be very excited about the long term return opportunity in the business.

We're committed to market, leading disclosure and reducing volatility in our results as discussed today.

Third our unique technology.

Some are for an agent led model allows for likely to become an increasingly important partner and connector between patients health care providers and insurance carriers. Finally population health inflict Rx are the natural next step to leverage our strategic asset, while bringing meaningful solutions to consumers.

<unk> to talking to you about the progress we've made as the year progresses, thanks, everybody and have a good evening.

Yeah.

Ladies and gentlemen that concludes today's conference. Thank you for your participation you may now disconnect stay safe and well.

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We look forward.

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