Q2 2024 Clover Health Investments Corp Earnings Call

August 5, 2024

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Operator: Please stand by; we're about to begin.

Please stand by. We're about to begin.

Operator: Ladies and gentlemen, good afternoon and welcome to the Clover Health second quarter 2021 earnings conference call. At the time, all participants are in a listen-only mode. A question and answer session will follow the prepared remarks.

Operator: Please stand by; we're about to begin. Ladies and gentlemen, good afternoon, and welcome to the Clover Health second quarter 2024 earnings conference call.

Speaker Change: Ladies and gentlemen, good afternoon and welcome to the Clover Health second quarter 2024 earnings conference call.

Speaker Change: At this time, all participants are in a listen-only mode. A question-and-answer session will follow the prepared remarks. At that time, if you do wish to ask a question, please press star 1 on your telephone keypad. And as a reminder, today's call is being recorded.

Operator: At that time, if you do wish to ask a question, please press star 1 on your telephone keypad. And, as a reminder, today's call is being recorded.

Ryan Schmidt: I would now like to turn the call over to Ryan Schmidt, Investor Relations for Clover Health. Please go ahead, Mr. Schmidt.

Operator: At this time, all participants are in a listen-only mode. A question and answer session will follow the prepared remarks. At that time, if you do wish to ask a question, please press star 1 on your telephone keypad. And as a reminder, today's call is being recorded. I would now like to turn the call over to Ryan Schmidt, Investor Relations for Clover Health. Please go ahead, Mr. Schmidt.

Ryan Schmidt: I would now like to turn the call over to Ryan Schmidt, Investor Relations for Clover Health. Please go ahead, Mr. Schmidt.

Ryan Schmidt: Good afternoon, everyone. Joining me on our call today to discuss the company's second quarter 2024 results are Andrew Toy, Clover Health Chief Executive Officer, and Peter Kipers, the company's Chief Financial Officer. You can find today's press release and the accompanying supplemental slides in the Investor Events and Presentation sections of our website at investors.coverhealth.com.

Ryan Schmidt: Good afternoon, everyone. Joining me on our call today to discuss the company's second quarter 2024 results are Andrew Toy, Clover Health's Chief Executive Officer, and Peter Kuipers, the company's Chief Financial Officer. You can find today's press release and the accompanying supplemental slides in the investor events and presentation sections of our website at investors.cloverhealth.com. This webcast is being recorded, and a replay will be available in the investor relations section of Clover Health's website.

Speaker Change: You can find today's press release and the accompanying supplemental slides in the investor events and presentation sections of our website at investors.cloverhealth.com.

Ryan Schmidt: This webcast is being recorded, and a replay will be available at the Investor Relations section of the Clover Health website. I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties, including expectations about future performance. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including in the risk factor section of our most recent annual report on Form 10-K and other SEC filings. Information about non-GAAP financial measures referenced, including a reconciliation of those measures to GAAP measures, can be found in the earnings materials available on our website.

Ryan Schmidt: I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties, including expectations about future performance. Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including in the risk factor section of our most recent annual report on Form 10-K and other SEC filings. Information about the non-GAAP financial measures referenced, including a reconciliation of those measures to GAAP measures, can be found in the earnings materials available on our website.

Speaker Change: This webcast is being recorded and a replay will be available in the Investor Relations section of the Clover Health website. I'd also like to caution you that we may make forward-looking statements during today's call that are subject to risks and uncertainties, including expectations about future performance.

Speaker Change: Factors that may cause actual results to differ materially from expectations are detailed in our SEC filings, including in the risk factors section of our most recent annual report on Form 10-K and other SEC filings.

Andrew: Information about non-GAAP financial measures referenced, including a reconciliation of those measures to GAAP measures, can be found in the earnings materials available on our website. With that, I'll now turn the call over to Andrew.

Ryan Schmidt: But that, I'll now turn the call over to you.

Andrew Toy: With that, I'll now turn the call over to Andrew.

Andrew Toy: Andrew. Thank you, Ryan, and thanks to everyone joining our call. Today, we're very pleased to report another set of strong financial results, as well as improved full-year guidance driven by meaningful profitability from our core insurance plan operations. Underlying these strong results is our assistant care platform that enables physicians to identify and manage chronic disease earlier. We believe that this focus improves outcomes for our members, improves total cost of care, and therefore drives our overall financial momentum. Ultimately, that is our goal. At Clover, we develop AI and data-driven technology that is differentiated at managing the clinical outcomes and total cost of care for people with chronic diseases.

Andrew Toy: Thank you, Ryan, and thanks to everyone joining our call. Today, we're very pleased to report another set of strong financial results, as well as improved full-year guidance, driven by meaningful profitability from our core insurance plan operation. Underlying these strong results is our assistant care platform that enables physicians to identify and manage chronic disease earlier. We believe that this focus improves outcomes for our members, improves total cost of care, and therefore drives our overall financial momentum. Ultimately, that is our goal.

Andrew: Thank you, Ryan, and thanks to everyone joining our call. Today, we're very pleased to report another set of strong financial results, as well as improved full-year guidance, driven by meaningful profitability from our core insurance plan operations.

Andrew: Underlying these strong results is our assistant care platform that enables physicians to identify and manage chronic disease earlier. We believe that this focus improves outcomes for our members, improves total cost of care, and therefore drives our overall financial momentum.

Andrew Toy: At Clover, we develop AI and data-driven technology that is differentiated at managing the clinical outcomes and total cost of care for people with chronic diseases. We believe our financial results demonstrate that our model is working with physicians in our own M.A. plan.

Andrew: Ultimately, that is our goal. At Clover, we develop AI and data-driven technology that is differentiated at managing the clinical outcomes and total cost of care for people with chronic diseases.

Andrew Toy: We believe our financial results demonstrate that our model is working with physicians in our own MA plan. Next, we intend to bring our approach via our counterpart offering to physicians who serve other plans as well.

Andrew: We believe our financial results demonstrate that our model is working with physicians in our own MA plan. Next, we intend to bring our approach, via our counterpart offering, to physicians who serve other plans as well.

Andrew Toy: Next, we intend to bring our approach via our counterpart offering to physicians who serve other plans as well. On that note, let me begin with some high-level takeaways from our second quarter. First, we achieved meaningful profitability this quarter, highlighted by our increasing adjusted EBITDA, as well as positive net income for the first time as a public company. We're very proud to have achieved this milestone. Given these results, we fully expect to deliver profitability this year on an adjusted EBITDA basis and are happy to update our full year guidance to reflect this strong performance, which Peter will walk you through later in the call.

Andrew Toy: On that note, let me begin with some high-level takeaways from our second quarter performance. First, we achieved meaningful profitability this quarter, highlighted by our increasing adjusted EBITDA, as well as positive net income for the first time as a public company. We're very proud to have achieved this milestone. Given these results, we fully expect to deliver profitability this year on an adjusted EBITDA basis, and are happy to update our full-year guidance to reflect this strong performance, which Peter will walk you through later in the call. Second, we've again delivered double-digit top-line revenue growth with further margin improvement in our core insurance offering.

Andrew: On that note, let me begin with some high-level takeaways from our second quarter performance.

Andrew: First, we achieved meaningful profitability this quarter, highlighted by our increasing adjusted EBITDA, as well as positive net income for the first time as a public company.

Andrew: We're very proud to have achieved this milestone.

Speaker Change: Given these results, we fully expect to deliver profitability this year on an adjusted EBITDA basis and are happy to update our full year guidance to reflect this strong performance, which Peter will walk you through later in the call.

Andrew Toy: Second, we've again delivered double-digit top-line revenue growth, with further margin improvement in our core insurance offerings. Our impressive Medicare Advantage performance is driving our ability to deliver consistent, meaningful, adjusted EBITDA profitability this year. Third, our performance improves upon our already healthy balance sheet, allowing us to operate from a position of strength.

Peter: Second, we've again delivered double-digit top-line revenue growth, with further margin improvement in our core insurance offering.

Andrew Toy: Our impressive Medicare Advantage performance is driving our ability to deliver consistent, meaningful adjusted EBITDA profitability this year. Third, our performance improves upon our already healthy balance sheet, allowing us to operate from a position of strength. We expect to be able to self-fund meaningful growth in the next phase of our business. Lastly, our strong first half results continue to highlight our unique ability to operate a profitable Medicare Advantage plan almost entirely on a PPO chassis. Unlike other plans that rely on narrowing their networks within an HMO to funnel patients to specific doctors, our approach is fundamentally different and allows us to meet the needs of more of the total addressable markets.

Peter: Our impressive Medicare Advantage performance is driving our ability to deliver consistent, meaningful, adjusted EBITDA profitability this year.

Andrew Toy: We expect to be able to self-fund meaningful growth in the next phase of our business. Lastly, our strong first-half results continue to highlight our unique ability to operate a profitable Medicare Advantage plan almost entirely on a PPO shift. Unlike other plans that rely on narrowing their networks within an HMO to funnel patients to specific doctors, our approach is fundamentally different and allows us to meet the needs of more of the total addressable market. Clover Assistants' proprietary and patented technology allows us to work with any doctor, improving both their clinical outcomes and total cost of care. This capability is crucial for a PPO model.

Peter: Third, our performance improves upon our already healthy balance sheet, allowing us to operate from a position of strength. We expect to be able to self-fund meaningful growth in the next phase of our business.

Peter: Lastly, our strong first-half results continue to highlight our unique ability to operate a profitable Medicare Advantage plan almost entirely on a PPO chassis.

Peter: Unlike other plans that rely on narrowing their networks within an HMO to funnel patients to specific doctors, our approach is fundamentally different and allows us to meet the needs of more of the total addressable market.

Andrew Toy: Clover assistance proprietary and patented technology allows us to work with any doctor, improving both their clinical outcomes and total cost of care. This capability is crucial for a PPO model. Our vision is to build position-enablement technology that brings great healthcare to all Medicare beneficiaries. This is precisely why our strategy is anchored on wide network PPO's. But simply, most people want the freedom to choose their own doctors. Not have their insurance plans pick their doctors for them. In contrast, the challenge for the broader industry is that traditional HMO cost management frameworks are not easily executed within PPO's, as there is less network control.

Peter: Clover Assistants' proprietary and patented technology allowed us to work with any doctor, improving both their clinical outcomes and total cost of care.

Andrew Toy: Our vision is to build physician enablement technology that brings great health care to all Medicare beneficiaries. This is precisely why our strategy is anchored in wide network PPOs. Put simply, most people want the freedom to choose their own doctors, not have their insurance plans pick their doctors for them.

Peter: This capability is crucial for a PPO model. Our vision is to build physician enablement technology that brings great health care to all Medicare beneficiaries. This is precisely why our strategy is anchored on wide network PPOs.

Peter: Put simply, most people want the freedom to choose their own doctors, not have their insurance plans pick their doctors for them.

Andrew Toy: In contrast, the challenge for the broader industry is that traditional HMO cost management frameworks are not easily executed within PPOs, as there is less network control; plans used to selecting doctors definitionally cannot rely on that selective network narrowing to drive value-based results in the PPO. This is why we expect other managed care organizations to continue to struggle to balance consumer preference with managing cost. For Clover, we aim to solve this problem by managing quality, not by network narrowing, but by equipping physicians with our proven AI-powered software platform to better manage total cost of care and improve clinical outcomes.

Peter: In contrast, the challenge for the broader industry is that traditional HMO cost management frameworks are not easily executed within PPOs, as there is less network control.

Andrew Toy: Plans used to select things doctors definitionally cannot rely on that selective network narrowing to drive value-based results in the PPO. This is why we expect other managed care organizations to continue to struggle to balance consumer preference with managing cost pressures. For Clover, we aim to solve this problem by managing quality not by network narrowing, but by equipping physicians with our proven AI-powered software platform to better manage total cost of care and improve clinical outcomes. We do this through a focus on identifying and managing chronic diseases as early as possible.

Peter: Plans used to selecting doctors definitionally cannot rely on that selective network narrowing to drive value-based results in the PPO.

Peter: This is why we expect other managed care organizations to continue to struggle to balance consumer preference with managing cost pressures.

Clover: For Clover, we aim to solve this problem by managing quality not by network narrowing, but by equipping physicians with our proven AI-powered software platform to better manage total cost of care and improve clinical outcomes.

Andrew Toy: We do this through a focus on identifying and managing chronic diseases as early as possible. Coupled with Clover Home Care's high-touch clinical capabilities, we believe that our differentiated care model creates a sustainable growth mode for our business and uniquely positions us for success despite broader industry challenges from regulatory changes and shifting consumer preferences. Most importantly, with CA, we are constantly learning from physician interactions and improving to drive better clinical results. Since this last quarter, we're very excited about our technology innovation, featuring several capabilities we've developed.

Clover: We do this through a focus on identifying and managing chronic diseases as early as possible.

Andrew Toy: Coupled with Clover Home Care's high touch clinical capabilities, we believe that our differentiated care model creates a sustainable growth mode in our business and uniquely positions us for success despite broader industry challenges from regulatory changes and shifting consumer preferences. Most importantly, with CA, we are constantly learning from physician interactions and improving to drive better clinical results.

Clover: Coupled with Clover Home Care's high touch clinical capabilities, we believe that our differentiated care model creates a sustainable growth mode in our business.

Clover: and uniquely positioned us for success despite broader industry challenges from regulatory changes and shifting consumer preferences.

Clover: Most importantly, with CA we are constantly learning from physician interactions and improving to drive better clinical results.

Andrew Toy: Since this last quarter, we're very excited about our technology innovation featuring several capabilities we've developed. This includes clinical enhancements around heart disease severity and progression to better health. Physicians identify and manage CHF. We're also streamlining clinician workflows around care debt closure to help them quickly and easily leverage the assistance access to robust data sources beyond what's available in their EHR. And finally, AI and LLMs allow for quick prototyping and implementation of features like ambient scribing and document summarization that allow us to quickly iterate and deploy features focused on position workflow and quality of life. With our continued investment in assistant platform development, we believe that we will continue our momentum in our overall MA business as we both focus on generating sustainable, meaningful profitability and returning to top line membership growth.

Clover: Since this last quarter, we're very excited about our technology innovation, featuring several capabilities we've developed.

Andrew Toy: This includes clinical enhancements around heart disease severity and progression to better help physicians identify and manage CHF. We're also streamlining clinician workflows around care gap closure to help them quickly and easily leverage assistance access to robust data sources beyond what's available in their EHR. And finally, AI and LLMs allow for quick prototyping and implementation of features, like ambient scribing and document summarization, that allow us to quickly iterate and deploy features focused on position, workflow, and quality of life.

Clover: This includes clinical enhancements around heart disease severity and progression to better help physicians identify and manage CHF.

Clover: We're also streamlining clinician workflows around care gap closure to help them quickly and easily leverage the assistance access to robust data sources beyond what's available in their EHR.

Clover: And finally, AI and LLMs allow for quick prototyping and implementation of features, like ambient scribing and document summarization, that allow us to quickly iterate and deploy features focused on position workflow and quality of life.

Andrew Toy: With our continued investment in assistant platform development, we believe that we will continue our momentum in our overall MA business as we both focus on generating sustainable, meaningful profitability and returning to top-line membership growth. It's also important to note that we expect to drive meaningful adjusted EBITDA profitability this year from our insurance plan alone. We're making great progress in building out our counterparty offering, and any future financial impact will be additive, but is not yet considered in our guidance.

Clover: With our continued investment in assistant platform development, we believe that we will continue our momentum in our overall MA business as we both focus on generating sustainable, meaningful profitability and returning to top-line membership growth.

Andrew Toy: It's also important to note that we expect to drive meaningful adjusted EBITDA profitability this year from our insurance plan alone. We're making great progress in building out our counterpart offering, and any future financial impact will be additive but is not yet considered in our guidance. That said, since launching this offering, we have continued to receive strong market interest for our platform, with more potential partnerships in the works. We believe we have a robust pipeline and unique product market fit in a broader MA market that has cited utilization issues and other headwinds over the past year.

Clover: It's also important to note that we expect to drive meaningful adjusted EBITDA profitability this year from our insurance plan alone.

Clover: We're making great progress in building out our counterpart offering, and any future financial impact will be additive, but is not yet considered in our guidance.

Andrew Toy: That said, since launching this offering, we have continued to receive strong market interest for our platform, with more potential partnerships in the works. We believe we have a robust pipeline and unique product market fit in a broader MA market that has cited utilization issues and other headwinds over the past year. To this point, the strong MA result in our own plans is a key differentiated advantage that validates our pitch to third-party customers.

Clover: That said, since launching this offering, we have continued to receive strong market interest for our platform with more potential partnerships in the works.

Clover: We believe we have a robust pipeline and unique product market fit in a broader MA market that has cited utilization issues and other headwinds over the past year.

Andrew Toy: To this point, the strong MA result in our own plans is a key differentiated advantage that validates our pitch to third party cost. My strong belief is that we've kickstarted a unique and powerful virtuous cycle with our Clover insurance offering, leveraging our technology to drive quality. That, in turn, should drive better results on our internal book of business, which then serves as validation to third-party customers for counterpart. Each piece is both complimentary and interconnected, and builds upon the other.

Clover: To this point, the strong MA result in our own plans is a key differentiated advantage that validates our pitch to third-party customers.

Andrew Toy: My strong belief is that we've kicked off a unique and powerful virtuous cycle with our Clover insurance offering, leveraging our technology to drive quality. That, in turn, should drive better results in our internal book of business, which then serves as validation to third-party customers for counterparts. Each piece is both complementary and interconnected and builds upon the other.

Clover: My strong belief is that we've kick-started a unique and powerful virtuous cycle with our Clover insurance offering leveraging our technology to drive quality.

Clover: That, in turn, should drive better results on our internal book of business, which then serves as validation to third-party customers for Counterpart. Each piece is both complementary and interconnected, and builds upon the other.

Andrew Toy: We're continuing to build out this fast and tech-enabled services offering, and we plan to share more specific financial guidance and expectations at a later date.

Andrew Toy: We're continuing to build out this SaaS and tech-enabled services offering, and we plan to share more specific financial guidance and expectations at a later date. Before handing it to Peter for the financial update, I'll touch on how we are thinking about MA plan growth. As a reminder, our focus during 2024 has been on retention and margin improvement in our returning member cohort. We're executing on this, and our first half results strongly position us to deliver upon these goals for the full year.

Clover: We're continuing to build out this SaaS and tech-enabled services offering, and we plan to share more specific financial guidance and expectations at a later date.

Andrew Toy: Before handing it to Peter for the financial update, I'll touch on how we are thinking about MA Plan growth. As a reminder, our focus during 2024 has been on retention and margin improvement in our returning member cohorts. We're executing against this, and our first half results strongly position us to deliver upon these goals for the full year.

Speaker Change: Before handing it to Peter for the financial update, I'll touch on how we are thinking about MA plan growth. As a reminder, our focus during 2024 has been on retention and margin improvement in our returning member cohorts.

Speaker Change: We're executing against this, and our first-half results strongly position us to deliver upon these goals for the full year.

Andrew Toy: For our 2025 growth strategy and bids, we're holding off on sharing specific details until more industry and competitor information is available. That said, CMS's recent recalculation of our PPO star rating up to three half stars has resulted in an exciting shift in our Go Forward approach, as we now have more flexibility to reinvest in plan benefit design to help drive growth. It's also important to note that we were the only plan in our primary markets to get a star rating increase from this recalculation. Our intent next year is to continue to grow top line insurance revenues in excess of the market while simultaneously improving our underlying cohort economics to drive increased long-term profitability.

Andrew Toy: For our 2025 growth strategy and bids, we're holding off on sharing specific details until more industry and competitor information is available. That said, CMS's recent recalculation of our PPO star rating up to three and a half stars has resulted in an exciting shift in our go forward approach, as we now have more flexibility to reinvest in plan benefit design to help drive growth. It's also important to note that we were the only plan in our primary markets to get a star rating increase from this recalculation.

Speaker Change: For our 2025 growth strategy and bids, we're holding off on sharing specific details until more industry and competitor information is available.

Speaker Change: That said, CMS's recent recalculation of our PPO star rating, up to three and a half stars, has resulted in an exciting shift in our go-forward approach, as we now have more flexibility to reinvest in plan benefit design to help drive growth.

Speaker Change: It's also important to note that we were the only plan in our primary markets to get a star rating increase from this recalculation.

Andrew Toy: Our intent next year is to continue to grow top-line insurance revenues in excess of the market while simultaneously improving our underlying cohort economics to drive increased long-term profitability. Ultimately, we'll have to see how the competitive positioning plays out, but we feel very good about our pricing and how we've positioned our business for next year to build on our 2024 performance and momentum. With that, I will now pass it over to Peter.

Speaker Change: Our intent next year is to continue to grow top-line insurance revenues in excess of the market, while simultaneously improving our underlying cohort economics to drive increased long-term profitability.

Andrew Toy: Ultimately, we'll have to see how the competitive positioning plays out, but we feel very good about our pricing and how we've positioned our business next year to build on our 2024 performance and momentum.

Speaker Change: Ultimately, we'll have to see how the competitive positioning plays out, but we feel very good about our pricing and how we've positioned our business next year to build on our 2024 performance and momentum.

Peter Kuipers: With that, I will now pass it over to Peter.

Peter Kuipers: Thank you, Andrew. Before diving into our results, I would like to share a few quick notes from the company from my perspective as I've settled into my role. Overall, I'm very pleased to have joined Clover at such an exciting time, and I'm continually impressed by the industry-leading AI power technology, talent, and general business momentum off the cuff. I believe that our business is steadily improving its profitability profile, and I am excited to be part of a company that has created a unique framework to improve the lives of people with chronic diseases while simultaneously building an attractive and scalable financial opportunity. I'm also excited by the opportunity to expand the use of proof of technology to our counterpart health, SAS, and tech-enabled services business.

Peter Kuipers: Thank you, Andrew. Before diving into our results, I would like to share a few quick notes on the company from my perspective as I've settled into my role. Overall, I'm very pleased to join Clover at such an exciting time, and I'm completely impressed by the industry-leading AI Power Technology, talents, and general business momentum of the company. I believe that our business is steadily improving its profitability profile, and I am excited to be part of the company that has created a unique framework to improve the lives of people with quantum diseases, while simultaneously building an attractive and scalable financial opportunity.

Speaker Change: With that, I will now pass it over to Peter.

Peter: Thank you, Andrew. Before diving into our results, I would like to share a few quick notes on the company from my perspective as I've settled into my role.

Peter: Overall, I'm very pleased to have joined Clover at such an exciting time and I'm continually impressed by the industry-leading AI, power technology, talent, and general business momentum of the company.

Peter: I believe that our business is steadily improving its profitability profile, and I am excited to be part of a company that has created a unique framework to improve the lives of people with chronic diseases, while simultaneously building an attractive and scalable financial opportunity.

Peter Kuipers: I'm also excited by the opportunity to expand the use of our proven technology through our counterpart health, SaaS, and second-able services offering.

Peter: I'm also excited by the opportunity to expand the use of our proven technology through our counterpart health, SAS, and tech-enabled services offering.

Peter Kuipers: Setting back into our earnings contents, I will first cover the second quarter for financial highlights, and then with you, our improved guidance for full year 2024. Clover's core fundamentals are strong. As Andrew mentioned, the second quarter was Clover's first positive gap at income from continuing operations quarter as a public company.

Peter Kuipers: Heading back into our earnings call, I will first cover the second quarter financial highlights and then review our improved guidance for full year 2024. Clover's core fundamentals are strong.

Peter: Heading back into our earnings context.

Peter: I will first cover the second quarter financial highlights and then review our improved guidance for full year 2024.

Peter Kuipers: As Andrew mentioned, the second quarter was Clover's first positive gap in income from continuing operations quarter as a public company; second quarter gap net income was a profit of $7 million as compared to a gap net loss of $29 million in the second quarter of last year. Similarly, adjusted EBITDA improved to a profit of $36 million in the second quarter of this year, compared to $10 million in the second quarter of last year. Year-to-date, we have significantly improved our year-for-year profitability, driven by strong M.A. plan momentum and a continued focus on optimizing adjusted STNA.

Andrew: Clover's core fundamentals are strong. As Andrew mentioned, the second quarter was Clover's first positive gap net income from continuing operations quarter as a public company.

Peter Kuipers: Secretary. Second quarter GAAP income was a profit of $7 million, as compared to a GAAP net loss of $29 million in the second quarter of last year. Similarly, adjusted EBITDA improved to a profit of $36 million in the second quarter of this year compared to $10 million in the second quarter of last year. The year to date, we have significantly improved our year-for-year profitability profile, driven by strong MA-planned momentum and the continued focus on optimizing adjusted SCNA. As a result, we've incorporated this first half capability into a full year outlook to significantly improve our adjusted EBITDA profitability guide of full year 24.

Andrew: Second quarter gap net income was a profit of $7 million, as compared to a gap net loss of $29 million in the second quarter of last year.

Speaker Change: Similarly, adjusted EBITDA improves to a profit of $36 million in the second quarter of this year, compared to $10 million in the second quarter of last year.

Speaker Change: Year-to-date, we have significantly improved our year-for-year profitability profile.

Speaker Change: driven by strong MA Plan momentum and a continued focus on optimizing adjusted STNA.

Peter Kuipers: As a result, we've incorporated this first half capability into our full year outlook to significantly improve our adjusted EBITDA profitability guide for full year 2020. As a reminder, last quarter, we shared that we would introduce a new operational metric to further improve transparency in our insurance performance and to better align with industry standards. This is the Insurance Benefits Expense Ratio, or Insurance BER. We calculate the BER by defining the sum of total insurance medical claim expenses, equality of proof, and cost by Insurance Premium.

Speaker Change: As a result, we've incorporated this first-half capability into our full-year outlook to significantly improve our adjusted EBITDA profitability guide for full year 24.

Peter Kuipers: As a reminder, last quarter, we shared that we would introduce a new operational metric to further improve transparency in our insurance performance and to better align with industry standards. This is the insurance benefits expense ratio or insurance BER. We calculate the BER by defining the sum of total insurance medical claim expenses and quality improvement costs by insurance premiums. The BER does not affect our adjusted EBITDA calculation in any way. As these quality improvement costs shift within our STNA. We believe that by also including expense related to enhancing health care quality in the numerator of the calculation, we are more accurately reflecting our assessment health care quality and memory engagement.

Peter Kuipers: The BER does not affect or adjust the EBITDA calculation in any way, as these quality improvement costs with NRSG&A. We believe that by also including spends related to enhancing health care quality in the numerator of the calculation, we are more accurately reflecting our investment in health care quality and member engagement. This ratio better captures the true costs of maintaining and enhancing the quality of care for our members and provides better comparability with our performance versus industry peers.

Speaker Change: As a reminder, last quarter we shared that we would introduce a new operational metric to further improve transparency in our insurance performance and to better align with industry standards. This is the Insurance Benefits Expense Ratio, or Insurance BER.

Speaker Change: We calculate the BER by defining the sum of total insurance medical claim expenses and quality improvement costs.

Speaker Change: Buy insurance premiums.

Speaker Change: The BER does not affect our adjusted EBITDA calculation in any way, as these quality improvement costs fit within our SG&A.

Peter Kuipers: This ratio better captures the true cost of maintaining and enhancing the quality of care for our members and provides better comparability into our performance versus industry peers. During the second quarter, insurance BER improves to 76.1% in 2024 as compared to 82.1% in the second quarter of 2023. MCR also improves to 71.3% in the second quarter, 47.2% in the second quarter of last year. A strong margin performance was coupled with continued year-over-year top-line organic insurance revenue growth of 11% in the second quarter to $350 million, at 10% close to year-to-date to $692 million. Driven by strong member retention, cohort unit economics, and a return to intra-year growth outside of AEP.

Speaker Change: This ratio better captures the true costs of maintaining and enhancing the quality of care for our members and provides better comparability into our performance versus industry peers.

Peter Kuipers: During the second quarter, insurance BER improved to 76.1% in 2024, as compared to 82.1% in the second quarter of 2023. MCR also improved to 71.3% in the second quarter from 77.2% in the second quarter of last year. Strong margin performance was coupled with continued year-over-year top-line organic insurance revenue growth of 11% in the second quarter to $350 million and 10% growth year-to-date to $692 million, driven by strong member retention, Cohort Unit Economics, and a return to intra-year growth outside of AU.

Speaker Change: During the second quarter, insurance BER improved to 76.1% in 2024, as compared to 82.1% in the second quarter of 2023.

Speaker Change: MCR also improved to 71.3% in the second quarter from 77.2% in the second quarter of last year.

Speaker Change: A strong margin performance was coupled with continued year-over-year top-line organic insurance revenue growth of 11% in the second quarter, to $350 million and 10% growth year-to-date to $692 million.

Speaker Change: driven by strong member retention.

Speaker Change: Cohort Unit Economics, and a return to intra-year growth outside of AEP.

Peter Kuipers: Only year-to-date basis, BER of 79.6% and MCR of 74.5%, both of which represents strong improvements of over 700 basis points year-over-year. During both periods this year, we benefited from the continued maturation of a core MA plan operations and the focus of returning member retention with strong unit economics that Andrew touched upon clearly. We've also experienced prior period developments on both revenue and metrics, both in 2Q as well as on the year-to-date basis, which has depressed our year-to-date BER to lower levels. That said, we expect a BER to be between 81% and 83% of fully year 2024 and to land in the mid 80s percentage on a full year incurred basis after normalizing, putting full mentions prior period developments.

Peter Kuipers: On a year-to-date basis, BER was 79.6% and MCR was 74.5%, both of which represent strong improvements of over 700 basis points year over year. During both periods this year, we benefited from the continued maturation of our core MA plan operations and the focus on returning member retention with strong unit economics that Andrew touched upon earlier. We've also experienced prior period developments in both Revenue and MedEx, both in 2Q as well as on the year-to-date basis, which has depressed our year-to-date BER to lower levels.

Speaker Change: On a year-to-date basis, BER was 79.6% and MCR was 74.5%, both of which represent strong improvements of over 700 basis points year over year.

Speaker Change: During both periods this year, we benefited from the continued maturation of a core M.A. plan operations and the focus on returning member retention with strong unit economics that Andrew touched upon earlier.

Speaker Change: We've also experienced prior period development on both Revenue and MedEx, both in 2Q as well as on a year-to-date basis, which has depressed our year-to-date BER to lower levels.

Peter Kuipers: That said, we expect the BER to be between 81% and 83% of full year 2024 and to land in the mid 80s percentage on a full year incurred basis after normalizing for the aforementioned prior period development. Of note, our results are still underpinned by elevated IBNR levels.

Speaker Change: That said, we expect the BER to be between 81% and 83% for full year 2024 and to land in the mid-80s percentage on a full year incurred basis after normalizing for the aforementioned prior period developments.

Peter Kuipers: Of note, our results are still underpinned by elevated IVNR levels. As mentioned during our last call, this was and is due to the change healthcare disruption and the transition to our new MA Plan ecosystem at the start of 2024. We continue to expect normalization of our IVNR levels by year ends. On the SDNA fronts, during the second quarter total SDNA spending was down 4% year-to-year, while the adjusted SDNA of 72 million dollars was modestly higher than the comparable periods. On the year-to-day basis, total SDNA was down 12%, and the adjusted SDNA of 147 million dollars was down 3% as compared to the same period in 2023.

Speaker Change: Of note, our results are still underpinned by elevated IVNR levels.

Peter Kuipers: As mentioned during our last call, this was and is due to the changed healthcare disruption and the transition to our new MAPlan ecosystem at the start of 2024. We continue to expect normalization of our IVNR levels by year end on the FPNA front. During the second quarter, total SG&A spending was down 4% year over year, while the adjusted SG&A of $72 million was modestly higher than the comparable period. On a year-to-day basis, total SG&A was down 12%, and adjusted SG&A of $147 million. It was down 3% as compared to the same period in 2023.

Speaker Change: As mentioned during our last call, this was and is due to the changed healthcare disruption and the transition to our new MAPlan ecosystem at the start of 2024.

Speaker Change: We continue to expect normalization of our IBNR levels by year-end.

Speaker Change: On the SG&A front, during the second quarter, total SG&A spending was down 4% year-over-year, while adjusted SG&A of $72 million was modestly higher than the comparable period.

Speaker Change: On a year-to-day basis, total SG&A was down 12% and adjusted SG&A of $147 million, was down 3% as compared to the same period in 2023.

Peter Kuipers: Our year-to-day 2024 results continue to include a temporary economy reserve, often approximately $2.5 million. Related to the increase in claims, inventory estimates reflect during the first quarter as a result of the change healthcare disruption and our internal MA Plan operational sensation. As our processing disability continues to normalize throughout the year, we expect this accounting reserve to be first. Furthermore, both periods continue to see a favorable impact year-to-year from the cost-saving initiatives associated with our new operational ecosystem and our workforce resolution announced last year. Partly offset by increased growth costs within by strong OEP and SCP close.

Peter Kuipers: Our year-to-date 2024 results continue to include a temporary economic reserve of approximately two and a half million dollars related to the increase in claims inventory estimates, which were reflected during the first quarter as a result of the changed healthcare disruption and our internal M.A. plan operations. As our processing disability continues to normalize throughout the year, we expect this economy we serve to reverse. Furthermore, both periods continue to see a favorable impact year-for-year from the cost-saving initiatives associated with our new operational ecosystem and our workforce lessonization announced last year, partially offset by increased growth costs driven by strong OEP and SCP growth.

Speaker Change: Our year-to-date 2024 results continue to include a temporary economic reserve of approximately $2.5 million, related to the increase in claims inventory estimates.

Speaker Change: reflect during the first quarter as a result of the changed healthcare disruption and our internal MA plan operational transition.

Speaker Change: As our processing facility continues to normalize throughout the year, we expect this economy to be served first.

Speaker Change: Furthermore, both periods continue to see a favorable impact, year for year, from the cost-saving initiatives associated with our new operational ecosystem and our workforce rationalization announced last year.

Speaker Change: partially offset by increased growth costs, driven by strong OEP and SCP growth.

Peter Kuipers: Looking ahead, we remain on track to achieve meaningful full-year adjusted SDNA savings versus last year. That set any life of our 12 adjusted EBITDA profitability performance to the first half of the year and the growth opportunity we now have, we expect to strategically reinvest into our business during the second half of the year to build a foundation for long-term sustainable growth. As such, we anticipate coming in at the high end of our adjusted SDNA outlook for the full year, and we believe that any near-term investment in the long-term detective of the business will prove to drive strong returns in the future.

Peter Kuipers: Looking ahead, we remain on track to achieve meaningful four-year adjusted SG&A savings versus last year. That said, and in light of our strong adjusted EBITDA profitability performance through the first half of the year and the growth opportunity we now have, we expect to strategically reinvest in our business during the second half of the year to build a foundation for long-term sustainable growth. As such, we anticipate coming in at the high end of our adjusted SG&A outlook for the full year, and we believe that any near-term investment in the long-term trajectory of the business will prove to drive strong returns in the future.

Speaker Change: Looking ahead, we remain on track to achieve meaningful four-year adjusted STD savings versus last year.

Speaker Change: That said, and in light of our strong adjusted EBITDA profitability performance through the first half of the year and the growth opportunity we now have.

Speaker Change: We expect to strategically reinvest into our business during the second half of the year to build a foundation for long-term sustainable growth.

Speaker Change: As such, we anticipate coming in at the high end of our adjusted SG&A outlook for the full year, and we believe that any near-term investment in the long-term trajectory of the business will prove to drive strong returns in the future.

Peter Kuipers: Going to the balance sheet, we ended the second quarter of 2024 with total restricted and unrestricted cash equivalents and investments totaling $483 million on a consolidated basis, $201 million at the parent entity and unregulated subsidiary level. Cash flow of operations, excluding discontinued operations for the second quarter, was $46 million.

Peter Kuipers: Turning to the balance sheet, we ended the second quarter of 2024 with total restricted and unrestricted cash, cash equivalence, and assessments totaling $483 million on a consolidated basis, the $211 million at the parent entity and unregulated subsidiary level. Cash-profile operations, excluding discontinued operations for the second quarter, was $46 million, and I am proud that this has improved the company's already strong balance. We continue to expect that a cash wealth while operating activities during the full year of 2024, excluding the impact from discontinued operations, will be positive.

Speaker Change: Turning to the balance sheet, we ended the second quarter of 2024 with total restricted and unrestricted cash equivalents and investments totaling $483 million on a consolidated basis.

Speaker Change: The $201 million at the parent entity and unregulated subsidiary level.

Speaker Change: Cash flow for operations, excluding discontinued operations for the second quarter, was $46 million. And I am proud that this has improved the company's already strong balance sheet.

Peter Kuipers: And I am proud that this has improved the company's already strong balance. We continue to expect that cash flow for operating activities during the full year 2024, excluding the impact from discontinued operations, will be positive. Taking this into account, we continue to expect our year-end 2024 unregulated liquidity to be between $145 million and $165 million. Finally, and as Andrew mentioned earlier, we have strong conviction that this allows us to operate from a position of strength.

Speaker Change: We continue to expect that our cash flow from operating activities during the full year 2024, excluding the impact from discontinued operations, will be positive.

Peter Kuipers: Taking it into account, we continue to expect our U.N. 2024 unregulated liquidity to be between $145 million and $165.00 million. Lastly, and as Andrew mentioned earlier, we have strong conviction that this allows us to operate from a position of strength, and we expect to continue to be able to self-engrossed in the next phase of our business.

Speaker Change: Taking this into account, we continue to expect our year-end 2024 unregulated liquidity to be between $145 million and $165 million.

Speaker Change: Lastly, and as Andrew mentioned earlier, we have strong conviction that this allows us to operate from a position of strength.

Peter Kuipers: And we expect to continue to be able to sell from growth in the next phase of our business. Additionally, we remain committed to the share repurchase program that we announced in connection with our first quarter earnings. As a reminder, the board of directors authorized the company to buy back up to $20 million of the company's Class A common stock over the next two years. Starting in May this year, we began returning capital to our shareholders. We're purchasing approximately $2 million of stock during the quarter.

Andrew: and we expect to continue to be able to sell from growth in the next phase of our business.

Peter Kuipers: Additionally, we remain committed to the shared-repertised program that we announced the connection without first quarter earnings. As a reminder, a board of directors authorized the company to buy back up to $20 million of the company's Class A common stock over the next two years. Starting in May this year, we can return capital to our shareholders, repurchasing approximately $2 million of stock during the quarter. We expect to continue to be nimble and prudently manage our capital allocation strategy to maximize value for our shareholders.

Speaker Change: Additionally, we remain committed to the share repurchase program to reannounce the connection with our first quarter earnings.

Speaker Change: As a reminder, a Board of Directors authorized the company to buy back up to $20 million of the company's Class A common stock over the next two years.

Speaker Change: Starting in May this year, we began returning capital to our shareholders, repurchasing approximately $2 million of stock during the quarter.

Peter Kuipers: We expect to continue to be nimble and prudently manage our capital allocation strategy to maximize value for shareholders. Finally, I will provide an update to our improved full-year 2024 guidance in light of our continued strong business momentum and fundamentals through the first half of the year. We are increasing our revenue guidance for the insurance line of business to now be between $1,360,000,000 and $1,375,000,000. We are also introducing four-year guidance for insurance BER to be within a range of 81% to 83%.

Speaker Change: We expect to continue to be nimble and prudently manage our capital allocation strategy to maximize value for our shareholders.

Peter Kuipers: Finally, I will provide an update to our improved full-year 2024 guidance in light of our continuous strong business momentum and fundamentals to the first half of the year. We are increasing our revenue guidance for the insurance line of business to now be between $1 billion and $350 million and $1 billion and $375 million. We are also introducing full-year guidance for insurance BER to be within a range of 81% to 83%. As I mentioned earlier, we expect this operational metrics to be in the mid-80% range on a growth basis. We are improving our insurance NCR to be within a range of 77% to 79%.

Speaker Change: Finally, I will provide an update to our improved full year 2024 guidance in light of our continued strong business momentum and fundamentals through the first half of the year.

Speaker Change: We are increasing our revenue guidance for the insurance line of business to now be between $1,350,000,000 and $1,375,000,000.

Speaker Change: We are also introducing four-year guidance for insurance BER to be within a range of 81% to 83%.

Peter Kuipers: As I mentioned earlier, we expect this operational metric to be in the mid-80% range on an accurate basis. We are improving our insurance MCR to be within a range of 77% to 79%. We are maintaining our adjusted SG&A outlook to be between $270 million and $280 million. Additionally, we are increasing our full year 2024 adjusted EBITDA guidance to be between $50 million and $65 million. And we touched upon an opportunity arc today driven by a strong insurance plan performance.

Speaker Change: As I mentioned earlier, we expect this operational metric to be in the mid-80% range on an incurred basis.

Speaker Change: We are improving our insurance MCR to be within a range of 77% to 79%.

Peter Kuipers: We are maintaining our adjusted SDNA outlook to be between $270 million and $280 million. We are increasing our full-year 2024 adjusted EBITDA guidance to be between $50 million and $65 million. As Anne retouched upon a possibility arc today driven by a strong insurance plan performance, we've proven this year that we can deliver significant returns with just a three-and-a-half-star rating, with the opportunity to even better potential results if and when we achieve higher star ratings. From beyond our main plans, I'm particularly excited about what Counterpart can add to a performance in the future as we grow our external solution offerings.

Speaker Change: We are maintaining our adjusted SDNA outlook to be between 270 million dollars and 280 million dollars.

Speaker Change: We are increasing our full year 2024 adjusted EBITDA guidance to be between 50 million dollars and 65 million dollars.

Speaker Change: And we touched upon a profitability arc today driven by a strong insurance plan performance.

Peter Kuipers: We've proven this year that we can deliver significant returns with just a 3.5-star rating, with the opportunity for even better potential results if and when we achieve higher star ratings. Going beyond our MA plans, I'm particularly excited about what Counterpart can add to our performance in the future as we grow our external solution offering. Counterpart Health continues to garner strong market reception with this robust pipeline. We expect this to only strengthen our ability to execute and improve the company's already strong core.

Speaker Change: We've proven this year that we can deliver significant returns with just a 3.5 star rating.

Speaker Change: with the opportunity for even better potential results if and when we achieve higher STAAR ratings.

Speaker Change: Going beyond our MA plans, I'm particularly excited about what Counterpart can add to our performance in the future as we grow our external solution offerings.

Peter Kuipers: Counter-part health of teams that go on a strong market reception with us for both pipeline. We expect this to only strengthen our ability to execute and improve the companies are ready strong core fundamentals.

Speaker Change: Counterpart health continues to garner strong market reception with this robust pipeline.

Speaker Change: We expect this to only strengthen our ability to execute and improve the company's already strong core fundamentals.

Peter Kuipers: In summary, our goal and Clover is to maintain the momentum that we have developed in the last couple of years and continue to improve our business. Performance. I believe this is exactly what we've done during the first half of the year, positioning as well to teach our adjusted EBITDA profitability goals in 2024 and improve our underlying court economics in 25 to increase our long-term profitability capacity.

Peter Kuipers: In summary, our goal at Clover is to maintain the momentum that we have developed in the last couple of years and continue to improve our business. I believe this is exactly what was done during the first half of the year, positioning us as well to achieve our adjusted EBITDA profitability goals in 2024 and improve our underlying cohort economics in 2025 to increase our long-term profitability capacity. Now, let me turn the call back to Andrew for some closing comments.

Speaker Change: In summary, our goal at Clover is to maintain the momentum that we have developed in the last couple of years and continue to improve our business performance.

Speaker Change: I believe this is exactly what we've done during the first half of the year.

Speaker Change: positioning as well to achieve our adjusted EBITDA profitability goals in 2024 and improve our underlying cohort economics in 2025 to increase our long-term profitability capacity.

Andrew Toy: Now let me turn the call back to Andrew for some closing comments.

Speaker Change: Now let me turn the call back to Andrew for some closing comments.

Andrew Toy: Thanks, Peter. In conclusion, I'm very pleased with our performance during the first half of the year. I would like to thank the entire Clover team for their continued efforts in delivering such strong financial results. Before we head to Q&A, let me reiterate the key takeaways of the quarter from my perspective.

Andrew Toy: In conclusion, I'm very pleased with our performance during the first half of the year and would like to thank the entire Clover team for their continued efforts in delivering such strong financial results. Before we head to Q&A, let me reiterate the key takeaways of the quarter from my perspective.

Andrew: Thanks, Peter.

Andrew: In conclusion, I am very pleased with our performance during the first half of the year and would like to thank the entire Clover team for their continued efforts in delivering such strong financial results.

Speaker Change: Before we head to Q&A, let me reiterate the key takeaways of the quarter from my perspective.

Andrew Toy: One, we delivered positive net income for the first time as a public company and improved our full year 2024 adjusted EBITDA outlook. Two, business fundamentals are strong with double-digit top-line revenue growth and industry-leading loss ratios. Three, we improved our already healthy balance sheet and believed that we have the ability to self-fund future membership growth. Four, we're well positioned for long-term growth in Medicare Advantage via our PPO-centric approach. And five, our strong performance in our own NA plan is driving interest in our counterpart third-party offerings. Today's results demonstrate that we're able to perform well where others don't.

Andrew Toy: We delivered positive net income for the first time as a public company and improved our full year 2024 adjusted EBITDA output by $ 2 million. Two, business fundamentals are strong, with double-digit top-line revenue growth and industry-leading loss ratios. 3. We improved our already healthy balance sheet and believe that we have the ability to self-fund future membership growth. 4.

Speaker Change: One, we delivered positive net income for the first time as a public company and improved our full year 2024 Adjusted EBITDA outlook.

Speaker Change: 2. Business fundamentals are strong, with double-digit top-line revenue growth and industry-leading loss ratios.

Speaker Change: Three, we improved our already healthy balance sheet and believe that we have the ability to self-fund future membership growth.

Andrew Toy: We're well positioned for long-term growth in Medicare Advantage via our PPO-centric approach. And five, our strong performance in our own M.A. plan is driving interest in our counterpart third parties. Today's results demonstrate that we're able to perform well where others don't. We thrive in fragmented markets, and we don't rely on anchor health systems or value-based contracts.

Speaker Change: Four, we're well-positioned for long-term growth in Medicare Advantage via our PPO-centric approach.

Speaker Change: And five, our strong performance in our own MA plan is driving interest in our counterpart third-party offerings.

Speaker Change: Today's results demonstrate that we're able to perform well where others don't.

Andrew Toy: We thrive in fragmented markets, and we don't rely on anchor health systems or value-based contracts. For most MA plans, these are challenging dynamics, but our technology-centric approach allows us to properly sustain a benefit-rich, wide-network PPO plan. We're generating meaningful adjusted EBITDA profitability at a three-and-a-half-star rating, positioning us well for even better results if and when we achieve higher ratings. And unlike almost every other MA plan, we see ourselves accountable for the total cost of care for our entire book of business, as opposed to others who heavily rely on risk delegation and capitation. Our strong insurance fundamentals, coupled with our counterpart offerings, make for an exciting time to be a part of the Clover Health journey.

Speaker Change: We thrive in fragmented markets, and we don't rely on anchor health systems or value-based contracts.

Andrew Toy: For most MA plans, these are challenging dynamics, but our technology-centric approach allows us to profitably sustain a benefit-rich, wide-network PPO. We're generating meaningful adjusted EBITDA profitability at a three and a half star rating, positioning us well for even better results if and when we achieve higher ratings. And unlike almost every other MA plan, we see ourselves accountable for the total cost of care for our entire book of business, as opposed to others who heavily rely on risk delegation and capitation.

Speaker Change: For most MA plans, these are challenging dynamics, but our technology-centric approach allows us to profitably sustain a benefit-rich, wide-network PPO plan.

Speaker Change: We're generating meaningful adjusted EBITDA profitability at a 3.5 star rating, positioning us well for even better results if and when we achieve higher ratings.

Speaker Change: And unlike almost every other MA plan, we see ourselves accountable for the total cost of care for our entire book of business.

Speaker Change: as opposed to others who heavily rely on risk delegation and capitation.

Andrew Toy: Our strong insurance fundamentals, coupled with our counterpart offerings, make for an exciting time to be a part of the Clover Health journey. Once again, thank you to everyone, and I very much look forward to providing more updates later in the year as we continue to execute against our goal. With that, let's go to questions.

Speaker Change: Our strong insurance fundamentals, coupled with our counterpart offerings, make for an exciting time to be a part of the Clover Health journey.

Andrew Toy: Once again, thank you to everyone, and I very much look forward to providing more updates later in the year as we continue to execute against our goals.

Speaker Change: Once again, thank you to everyone, and I very much look forward to providing more updates later in the year as we continue to execute against our goals.

Operator: With that, let's go to questions. Thank you, Mr. Toy. Ladies and gentlemen, we will now be taking questions from Clover's research analysts. At this time, if you would like to ask a question, please press star one on your telephone keypad. You may remove yourself from the queue by pressing star two.

Operator: Thank you, Mr. Toy. Ladies and gentlemen, we will now be taking questions from Clover's research analysts. At this time, if you wish to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2. In the interest of time, we ask that you please limit yourself to one question and one quick follow-up. We'll go first this afternoon to Richard Close of Canaccord Genuity.

Speaker Change: With that, let's go to questions.

Speaker Change: Thank you, Mr. Toy. Ladies and gentlemen, we will now be taking questions from Clover's research analysts. At this time, if you wish to ask a question, please press star 1 on your telephone keypad. You may remove yourself from the queue by pressing star 2.

Operator: In the interest of time, we ask that you please look at yourself to one question and one quick follow-up.

Richard Close: We'll go first this afternoon to Richard Close of Canaccord Genuity. Yeah, thanks for the questions. Congratulations on the execution.

Speaker Change: In the interest of time, we ask that you please limit yourself to one question and one quick follow-up. We'll go first this afternoon to Richard Close of Canaccord Genuity.

Richard Close: Yeah, thanks for the questions. Congratulations on the execution.

Richard Close: Yeah, thanks for the questions. Congratulations on the execution. Peter, I was wondering if you could comment a little bit, just from a modeling perspective, as we think about it, salary and benefits.

Peter Kuipers: Peter, I was wondering if you could comment a little bit just from a modeling perspective as we think about it. Salary and benefits looks like a decreased about three million sequentially. I was just curious if there's anything specific there that drove that and how we should think about that, I guess, in the second half is a pretty much steady state at the second quarter levels.

Peter Kuipers: Peter, I was wondering if you could comment a little bit, just from a modeling perspective, as we think about it. Salary and benefits looks like it decreased about 3 million sequentially. And I was just curious if there's anything specific there that drove that and how we should think about that, I guess, in the second half. Is it pretty much steady state at the second quarter levels? We'll leave it there.

Speaker Change: Looks like it decreased to about 3 million sequentially. And I was just curious if there's anything specific there that drove that.

Speaker Change: And how we should think about that, I guess, in the second half. Is it pretty much steady state at the second quarter levels? We'll leave it there.

Operator: We'll leave it there.

Peter Kuipers: Hey, Richard. Class of the year, thanks for the question. So, you know, overall, I would say, as DNA, of course, we continue to optimize as we scale as well.

Richard Close: Hey Richard, I'm glad to be here.

Peter Kuipers: Thanks for the question. So, you know, overall, I would say, as CNA, of course, we continue to optimize SV Scale as well. If you're going to look at coronavirus for your own modeling purposes, of course, there's some seasonality in the fourth quarter as we make investments, both in quality and otherwise.

Speaker Change: Hey Richard, glad to be here. Thanks for the question.

Speaker Change: So, you know, overall, I would say SCNA, of course, we continue to optimize.

Peter Kuipers: If you've got to look at quarterly conversations for your own model purposes, of course, there's some seasonality in the fourth quarter, as you make investments, both in quality and otherwise. But nothing specific to the second quarter; why that went down so much sequentially. Just continue the optimization.

Speaker Change: as we scale as well. If you're going to look at quarterization for your own model purposes, of course, there's some seasonality in the fourth quarter as we make investments, both in quality and otherwise.

Peter Kuipers: But nothing specific to the second quarter or why that went down so much sequentially.

Speaker Change: But nothing specific to the second quarter, why that went down so much sequentially?

Peter Kuipers: This is a continued optimization.

Andrew Toy: Okay, Andrew, maybe as my follow-up question on the home care business. You know, there's been several articles out in the journal about home visits and, I guess, questioning the validity of that. I was curious if you could just walk us through the home care business for Clover, what you're doing there, and maybe how it's different than, I guess, the home visits that are referenced in the journal articles.

Operator: Okay.

Richard Close: Andrew, maybe as my follow-up question on the home care business, you know, there's been several, I guess, articles out in the journal about home visits and, I guess, questioning the validity of that.

Speaker Change: Discontinued optimization.

Andrew: Okay, Andrew, maybe as my follow-up question on the home care business...

Andrew: You know, there's been several, I guess, articles out in the journal about home visits and, I guess, questioning the validity of that. I was curious if you could just...

Andrew Toy: I was curious if you could just walk us through the home care business for Clover, what you're doing there, and maybe how it's different than, I guess, the home visits that are referenced in the journal articles. Yeah, thanks, Richard. And just on your previous question, I just want to note that, as Peter says, there's nothing new that we're doing, but for year-over-year comparisons on S-G-N-A, we have spoken for several quarters prior to Peter joining as well. I talked about how we were transitioning to a new operating infrastructure with our partnerships and how we're moving some operations to some partners.

Speaker Change: Walk us through the home care business for Clover, what you're doing there, and maybe how it's different than, I guess, the home visits that are referenced in the journal articles.

Andrew Toy: Yeah, thanks, Richard. And just on your previous question, I just want to note that, as Peter says, there's nothing new that we're doing. But for year-over-year comparisons on SG&A, we have spoken for several quarters. Prior to Peter joining as well, I talked about how we were transitioning to a new operating infrastructure with our partnerships and how we were moving some operations to some partners. And I think that you're seeing some of that effect flow through, just as we discussed about a year ago at this point. So, nothing new, but just want to remind everybody that this is us executing upon our plans that we discussed starting from the middle of last year.

Speaker Change: Yeah, thanks, Richard. And just on your previous question, I just want to note that, as Peter says, there's nothing new that we're doing, but for year-over-year comparisons on SG&A, we have spoken for several quarters. Prior to Peter joining as well, I talked about how we were transitioning to a new operating infrastructure with our partnerships.

Andrew Toy: And I think that you're seeing some of that effect flow through, just as we discussed about a year ago at this point. So nothing new, but just want to remind everybody that that's us executing upon our plans that we discussed starting from the middle of last year.

Speaker Change: and how we're moving some operations to some partners and I think that you're seeing some of that effect flow through just as we discussed about a year ago at this point. So nothing new but just want to remind everybody that that's us executing upon our plans that we discussed starting from the middle of last year.

Andrew Toy: Regarding home care and how we do things differently, I think there are a couple of different dimensions here that I want to emphasize. Number one, we are very focused on looking after the sickest and most complicated members within the home. And we believe that the home setting is the best place for that.

Andrew Toy: Regarding the home care and how we do things differently, I think there's a couple of different dimensions here that I want to emphasize. Number one, we are very focused on looking after the sickest and most complicated members within the home. And we believe that the home setting is the best place for that. That's why we have in our home care system. We do have nurse practitioners, but we also have MDs, we have DOs, and we are actually taking over primary care for a lot of the folks in our home care practice. So we see the sickest as being looked at there from a primary care perspective.

Speaker Change: Regarding the home care and how we do things differently, I think there's a couple of different dimensions here that I want to emphasize.

Speaker Change: Number one, we are very focused on looking after the sickest and most complicated members within the home. And we believe that the home setting is the best place for that. That's why we have in our home care system, we do have nurse practitioners, but we also have MDs.

Andrew Toy: That's why we have in our home care system not only nurse practitioners, but also MDs, DOs, and we are actually taking over primary care for a lot of the folks in our home care practice. So we see the sickest as being looked after from a primary care perspective. And that is our focus. And that's what I talk about a lot.

Speaker Change: We have DOs, and we are actually taking over primary care for a lot of the folks in our home care practice.

Speaker Change: So, we see the sickest that's being looked after from a primary care perspective.

Andrew Toy: And that is our focus. And that's where I discuss a lot. We also do some nursing visits, but a lot of the time those nurses are looking at chronic diseases, making sure that they're being managed properly. And then, most importantly, referring into that primary care system. So if we think that someone is getting sicker and they need more close attention, we take over that primary care relationship.

Andrew Toy: We also do some nursing visits, but a lot of the time those nurses are looking at chronic diseases, making sure that they're being managed properly, and then, most importantly, referring into that primary care system. So if we think that someone is getting sicker, and they need more close attention, we take over that primary care relationship. And I think that's very different and a very different home care strategy than what you see others basically focusing on.

Speaker Change: primary care perspective, and that is our focus, and that's what I discuss a lot. We also do some nursing visits, but a lot of the times those nurses are looking at chronic diseases, making sure that they're being managed properly, and then most importantly, referring into that primary care system. So if we think that someone is getting sicker and they need more close attention, we take over that primary care relationship. And I think that's very different and a very different home care strategy than what you see others basically focusing on.

Andrew Toy: And I think that's very different and a very different home care strategy than what you see others basically focusing on.

Andrew Toy: I think another dimension that we should talk about here is that our technology, Clover system and the assistant platform, brings together the care team between primary care, nursing visits, and makes sure that data is moving back and forth between these various areas. And so when you get a visit from a member of our home care care team, our members are being looked after in the home, but that information and data we also share to any user of CA. And that's available within the interoperability ecosystem in a longitudinal way using Clover Assistant. So I think both those things are very key aspects that differentiate our program from others.

Andrew Toy: I think another dimension that we should talk about here is that our technology, Clover Assistant and the Assistant Platform, brings together the care team between primary care and nursing visits to make sure that data is moving back and forth between these various areas. And so when you get a visit from a member of our home care care team, our members are being looked after in the home. But that information and data is also shared with any user of CA, and that's available within the interoperability ecosystem in a longitudinal way using Clover Assistant.

Speaker Change: I think another dimension that we should talk about here is that our technology, Clover Assistant and the Assistant platform, bring together the care team between primary care, nursing visits, and make sure that data is moving back and forth between these various areas. And so when you get a visit from a member of our home care care team, our members are all being looked after in the home, but that information and data we also share to any user of CA, and that's available within the interoperability ecosystem in a longitudinal way using Clover Assistant.

Andrew Toy: So I think both those things are very key aspects that differentiate our program from others. As a final note, we are very proud that our home care program has an extremely high net promoter score. And that's something we monitor very closely in terms of whether people would recommend the program to others. That's very helpful.

Speaker Change: So I think both those things are very key aspects that differentiate our program from others. As a final note, we are very proud that our home care program has an extremely high Net Promoter Score, and that's something we monitor very closely in terms of whether people would recommend the program to others.

Andrew Toy: As a final note, we are very proud that our home care program has an extremely high net promoter score. And that's something we monitor very closely in terms of whether people would recommend the program to others.

Operator: That's very helpful. Thank you.

Richard Close: That's very helpful. Thank you.

Operator: Thank you, Richard. Thank you.

Speaker Change: That's very helpful. Thank you.

Jason Cassorla: Thank you. We go next now to Jason Cassorla at Citi.

Jason Cassorla: We go next now to Jason Cassorla at City. A great thanks. Good afternoon. Congrats on the quarter.

Speaker Change: Thank you, Richard. Thank you.

Speaker Change: Thank you. We go next now to Jason Cassorla at Citi.

Jason Cassorla: Great, thanks. Good afternoon.

Peter Kuipers: Peter, can you give us a sense on what the MRH group adjustment was in the quarter, and I wanted to double-check on the normalize BER for 2024. It sounds like that would be in the mid 80s range, excluding the favorable reserve development. Is that the right baseline? We should be thinking about for jump off next year and then in guidance. Kind of would suggest a bit of a steep step up in cost trends in the back. I have a 24.

Jason Kisorla: Great, thanks. Good afternoon. Congrats on the quarter. Peter, can you give us a sense on what the MRA true-rip adjustment was in the quarter, and I wanted to double-check on the normalized BER for 2024. It sounds like that would be in the mid-80s range, excluding this favorable reserve development.

Jason Cassorla: Congratulations on the quarter. Peter, can you give us a sense of what the MRA true-rip adjustment was for the quarter? And I wanted to double check on the normalized BER for 2024. It sounds like that would be in the mid-80s range, excluding favorable reserve development. Is that the right baseline we should be thinking about for the jump off next year? And then in guidance, it kind of would suggest a bit of a steep step up in cost trends in the back half of 2024. Is there anything kind of outside of normal seasonality or your conservative posturing that you're seeing? And maybe what you're seeing, just maybe, broadly cost trend wise for July would be helpful. Thanks.

Speaker Change: Is that the right baseline we should be thinking about for jump off next year? And then in guidance kind of would suggest a bit of a steep step up in cost trends in the back half of 24. Just is there anything kind of outside of normal seasonality or conservative posturing that you're seeing? And maybe what you're seeing just maybe just broadly costs?

Peter Kuipers: Is there anything kind of outside of normal seasonality or your conservative posturing that you're seeing, and maybe what you're seeing? Just maybe just broadly cost trend wise for to why be helpful. Thanks. Thank you for the question thing. There's about five in there. So we'll try to answer all of them. As far as BER, like in the prepared remarks, we expect on an incurred basis to be around the mid 80s percentage. As far as the developments in the month of July, we do see more processing of RBNR and paid claims following was picking up nicely in the month of July.

Speaker Change: TrendWise for July . Be helpful. Thanks.

Peter Kuipers: Thank you for the questions. I think there are about five in there, so we'll try to answer all of them.

Peter Kuipers: As far as BER is concerned, like in the prepared remarks, we expect it on an incurred basis to be around the mid-80s percentage. As far as developments in the month of July are concerned, we do see more processing of IBNR unpaid claims. Volume is picking up nicely in the month of July. And then, I think, as far as the adjustment for the year, I don't think we have previously disclosed that, and I don't think we will on this call either.

Speaker Change: Thank you for the questions. I think there's about five in there, so we'll try to...

Speaker Change: answer all of them. As far as BER, like in the prepared remarks, we expect on an incurred basis to be around the mid 80s percentage.

Speaker Change: As far as developments in the month of July , we do see more processing of IVNR unpaid claims. The volume is picking up nicely in the month of July .

Peter Kuipers: And then, as far I think, as far as the adjustment make here, I don't think we have previously disclosed that, and I don't think we will on this call either. Okay, so just to be just be clear for everyone, just the mid 80s incurred is the right jump off. Are there other nuances? Yeah, we haven't given specific guidance yet for fiscal payment year 25, if you will, but for 24. We expect BER on the current basis to be in the mid 80s percentage. If you pencil it in for totally, yes, of course, it's a jump off point into 25, but I think we want to be clear that we haven't necessarily commented on 25 yet.

Speaker Change: And then as far, I think, as far as the Adjustment of the Year, I don't think we have previously disclosed that, and I don't think we will on this call either.

Jason Cassorla: Okay, so just to be clear for everyone, the mid-80s incurred, is the right jump off point, or are there other nuances?

Speaker Change: Okay, so just to be clear for everyone, the mid-80s incurred, is the right jump off, or are there nuances?

Peter Kuipers: Yeah, we haven't given specific guidance yet for fiscal payment year 25, if you will, but for 24, we expect BER on the current basis to be in the mid 80s percentage. So if you penciled in for the total year, yes, of course, it's a jump of 0.8 to 25. But I think we want to be clear that we haven't necessarily commented on 25.

Speaker Change: Yeah, we haven't given specific guidance yet for...

Speaker Change: fiscal payment year 25, if you will, but for 24 we expect BER on the current basis to be in the mid 80s percentage.

Speaker Change: So if you penciled in for total year, yes, of course it's a jump off point to 25. But I think we want to be clear that we haven't necessarily commented on 25 yet.

Jason Cassorla: Sure, of course. Okay, I got it.

Operator: Sure, of course. Okay, got it. And then maybe just as my is my follow up.

Jason Cassorla: This is my follow-up. I want to make sure I heard this right, too. It sounds like you're looking to perhaps spend away incremental upside on MCR for business reinvestment purposes. I just want to make sure I heard that correctly.

Speaker Change: Sure, of course. Okay, got it.

Peter Kuipers: I want to make sure I heard this right; it sounds like you're looking to perhaps spend away incremental upside on MCR for business reinvestment purposes. Do I just want to make sure to hear that correctly and then, you know, maybe in that context, can you walk us through the unregulated cash bridge for 24. It sounds like you're still keeping that 145 to 165 expectation for year and obviously you had a better EBITDA result kind of year to date and expect to just hope you can bridge the cash for us as well. Thanks. Yeah, thank you for that.

Speaker Change: is my follow-up.

Speaker Change: I want to make sure I heard this right too. It sounds like you're looking to perhaps spend away incremental upside on MCR for business reinvestment purposes. I just want to make sure, did I hear that correctly? And then maybe in that context, can you walk us through

Peter Kuipers: And then, you know, maybe in that context, can you walk us through the unregulated cash bridge for 24? It sounds like you're still keeping that 145 to 165 expectation for year-end. Obviously, you had a better EBITDA result kind of year-to-date than expected. I'm just hoping you can bridge the cash for us as well. Thanks.

Speaker Change: The unregulated cash bridge for 24. It sounds like you're still keeping that 145 to 165 expectation for year-end. Obviously, you had a better EBITDA result kind of year-to-date than expected. I'm just hoping you can bridge the cash for us as well. Thanks.

Peter Kuipers: So that's two questions. So maybe start with the cash first, right? So, as put it prepared remarks, we have $201 million of unregulated cash. And if you walk that forward to the end of the year, we have an ACO Reach repayment, if you will, also deposit of around $39 million. So that gets you to around $60 million of unregulated cash being a little bit conservative on the second half. In the outlook, if you will, but we feel good overall. So that gets you to do that range, if you will, as far as investments in the business for long-term profitability and growth.

Peter Kuipers: So maybe we start with the cash first, right? So, as per the prepared remarks, we have $201 million in unregulated cash. And if you walk that forward to the end of the year, we have an ACO REACH repayment, if you will, deposit of around $39 million. So that gets you to around $160 million of unregulated cash. So being a little bit conservative on the second half, in the outlook, if you will, but we feel good overall. So that gets you to that range, if you will.

Speaker Change: Yeah. Thank you for the last two questions.

Speaker Change: So maybe start with the cash first, right? So as per the prepared remarks, we have $201 million of unregulated cash.

Speaker Change: And if you walk that forward to the end of the year, we have an ACO reach.

Speaker Change: repayment, if you will, the deposit of around $39 million. So that gets you to around $160 million of unregulated cash. So being a little bit conservative on the second half in the

Peter Kuipers: As far as investments in the business for long-term profitability and growth go, we're increasing, over time, of course, the capacity and the capability of the model to produce increasingly profitable results. So you should think about quality investments as well as system investments, right? And, of course, also sales investments over time, although we'll stay shy of discussing specifically our sales strategies as we go to market later this year.

Speaker Change: in the outlook, if you will, but we feel good overall. So that gets you to

Speaker Change: to that range, if you will, as far as investments in the business for long-term profitability and growth. So we're increasing overtime, of course.

Peter Kuipers: So we're increasing over time, of course, the capacity and the capability of the model to produce increasingly profitability. So you should think about quality investments as well as system investments, right?

Speaker Change: the capacity and the capability of the model to produce.

Speaker Change: increasingly profitability. So you should think about quality investments as well as system investments, right? And of course also sales investments over time, although we'll stay shy of discussing specifically our sales strategies as we go to market later this year.

Operator: And of course, it also sails investments over time, although we'll say shy of discussing specifically our sales strategies as we go to market, lay that is here. Okay, thank you.

Operator: Yeah, thank you.

Whit Mayo: And ladies and gentlemen, just a quick reminder, Star One, please, for any further questions this afternoon. We're going back now to Whit Mayo at Learing Partners. Hey, thanks. Good afternoon. I know you don't want to disclose the MRA payment, but I just wanted to maybe understand what's driving it. It seems like you confirmed that you did have an MRA payment, which happens in the second quarter. And was there higher than average favorability in that payment this year? Yeah, I don't think we've disclosed enough fairly.

Operator: And ladies and gentlemen, just a quick reminder, star number one please for any further questions this afternoon. We'll go next to Whit Mayo at Leering Partners.

Speaker Change: Okay, thank you. Yeah, thank you.

Speaker Change: And ladies and gentlemen, just a quick reminder, star 1 please for any further questions this afternoon. We'll go next now to Whit Mayo at Lear Inc. Partners.

Whit Mayo: Uh, hey, thanks. Good afternoon. I know you don't want to disclose...

Whit Mayo: Hey, thanks. Good afternoon.

Whit Mayo: Hey, thanks. Good afternoon. I know you don't want to disclose the MRA payment, but I just wanted to maybe understand what's driving it. It seems like you confirmed that you did have an MRA payment, which happens in the second quarter, and was there higher than average favorability in that payment this year?

Whit Mayo: I know you don't want to disclose the MRA payment, but I just wanted to maybe understand what's driving it. It seems like you've confirmed that you did have an MRA payment, which happens in the second quarter. And was there higher than average favorability in that payment this year?

Peter Kuipers: Okay, maybe just a second question. There's been a lot of industry chatter on the two midnight rule, and just curious if you're seeing any noticeable movement there that you can detect. Thanks. Yeah, we've been following the vendor two midnight like we've been following the rule obviously for a little while. We've always been following the CMS guidance on this. And so I think we've been a little less perturbed by this as others.

Speaker Change: Yeah, I don't think we disclosed that necessarily.

Speaker Change: Okay, maybe just second question. There's been a lot of industry chatter on the two midnight rule, and just curious if you're seeing any noticeable movement there that you can detect things.

Speaker Change: Yeah, we've been following the standard. To midnight, like, we've been following the rule, obviously, for a little while. We've always been following the CMS guidance on this. And so I think we've been a little less perturbed by this as others. And so things are basically proceeding as we foresee, no real, you know, net impact for us.

Operator: And so things are basically proceeding as we foresee no real net impact for us. Okay, thanks, guys.

Peter Kuipers: Just one quick point as well: I think that as we look at all these and as we introduce the various numbers here, having we use the MCR before and a few of you are asking about the BER number here. I think that the idea is that I would note that we are sharing the incurred number into the mid 80s and that incurred number would be obviously not caring for any PPD. And so that's why that number will be slightly different than the number in the guidance.

Speaker Change: Okay, thanks guys.

Speaker Change: Just one quick point as well, I think that as we look at all these and as we introduce the the various numbers here, having we used MCR before and a few of you are asking about the BER number here, I think that the idea is that I would note that we are sharing the incurred number and to be in the mid 80s and that incurred number would be obviously not carrying forth any PPD and so that's why that number will be slightly different than the than the number in the guidance.

Andrew Toy: Andrew, can I follow up on one other thing?

Andrew Toy: Sure, just when you talk about July, I'm not exactly sure I'll follow exactly what you mean by more claims processing. Is this a good thing? Bad thing?

Speaker Change: Andrew, can I follow up on one other thing?

Andrew: Sure. Just when you talk about July , I'm not exactly sure I follow exactly what you mean by more claims processing. Is that, is this a good thing, bad thing? Maybe just elaborate a little bit more on what what you're saying.

Andrew Toy: I mean, maybe just elaborate a little bit more on what you're saying. Yeah, I can answer that one. So, as you saw in the compared remarks for this quarter, but also last quarter, both because of the change, change health care incident, if you will, plus then our switch over to a new provider, a new partner. We have elevated IV&R levels in the unpaid claims, right? So that common regard in July is really that we see good progress in the processing volume of those unpaid claims. So we expect that balance, prefer to reduce to this quarter, and then...

Speaker Change: Yeah, I can answer that one. So, as you saw in the prepared remarks for this quarter,

Speaker Change: but also last quarter, both because of the change to health care.

Speaker Change: Incident, if you will, plus then our switch over to a new provider, a new partner. We have elevated IV&R levels in the unpaid claims, right?

Speaker Change: So that comment regarding July is really that we see good progress in the processing volume of those unpaid claims. So we expect that balance to further reduce through this quarter and this fall.

Andrew Toy: Okay, so if that wasn't a comment on utilization, it was a comment on working through the back of it. Okay, yeah, we're getting confused.

Speaker Change: Okay, so that wasn't a comment on utilization, it was a comment on working through...

Speaker Change: [inaudible]

Operator: Thank you, and ladies and gentlemen, any further follow-up questions today? Please press star one at this time. All right, folks. Thanks for all the questions.

Speaker Change: Thank you, and ladies and gentlemen, any further follow-up questions today, please press star one at this time.

Peter Kuipers: Yeah, I don't think we necessarily disclosed that necessarily.

Andrew Toy: So just to reiterate, we believe that we are the only technology-powered managed care company in the market that's aiming to deliver better clinical outcomes, better cost of care, as well as position choice. Really, we believe that this is the future of Medicare Advantage, and we look forward to continuing to lead in this aspect via Clover's unique tailwinds and technology-powered care platform.

Speaker Change: All right folks, thanks for all the questions. So just to reiterate...

Whit Mayo: Okay, maybe just a second question. There's been a lot of industry chatter about the 2 midnight rule, and I'd just curious if you're seeing any noticeable movement there that you can detect.

Andrew Toy: Yeah, we've been following this, Andrew, to midnight, like we've been following the rule, obviously, for a little while; we've always been following the CMS guidance on this. And so I think we've been a little less perturbed by this than others. And so things are basically proceeding as we foresee no real, you know, net impact for us. Just one quick point as well. I think that as we look at all these, and as we introduce the various numbers here, having used MCR before, and a few of you are asking about the BER number here, I think that the idea is that I would note that we are sharing the incurred number to be the mid-80s, and that incurred number would obviously not be carrying forth any PPD. And so that's why that number will be slightly different than the number in the guidance.

Whit Mayo: Andrew, can I follow up on one other thing? Sure. Just, when you talk about July, I'm not exactly sure what you mean by more claims processing. Is that, is that a good thing, or a bad thing? Maybe just elaborate a little bit more on what you're saying.

Peter Kuipers: Yeah, I can answer that one. So as you saw in the prepared remarks for this quarter, but also last quarter, both because of the changed health care incident, if you will, plus then our switch over to a new provider, a new partner, we have elevated IVNR levels in the unpaid claims, right? So that comment regarding July is really that we see good progress in the processing volume of those unpaid claims, refer to reduce to this quarter and this...

Whit Mayo: Okay, so that wasn't a comment on utilization; it was a comment on working. Yes, I work at Accused.

Speaker Change: We believe that we are the only technology-powered managed care company in the market that's aiming to deliver better clinical outcomes, better cost of care, as well as physician choice.

Peter Kuipers: Yes, that worked out good.

Speaker Change: Really, we believe that this is the future of Medicare Advantage, and we look forward to continuing to lead in this aspect via Clover's unique tailwinds and technology-powered care platform.

Operator: Thank you all again for joining our call today, and I look forward to sharing more on our achievements in the second half of the year. Thanks everyone.

Whit Mayo: Thank you. And ladies and gentlemen, if you have any further follow-up questions today, please press star 1 at this time.

Operator: All right, folks. Thanks for all the questions.

Andrew Toy: So just to reiterate, we believe that we are the only technology-powered managed care company in the market that's aiming to deliver better clinical outcomes, better cost of care, as well as physician choice. Really, we believe that this is the future of Medicare Advantage, and we look forward to continuing to lead in this aspect via Clover's unique tailwinds and technology-powered care platform. Thank you all again for joining our call today, and I look forward to sharing more on our achievements in the second half of the year. Thanks, everyone.

Speaker Change: Thank you all again for joining our call today, and I look forward to sharing more on our achievements in the second half of the year. Thanks, everyone.

Operator: Thank you, Mr. Toy. This concludes today's Clover Health second quarter 2024 earnings call and webcast. You may disconnect at your mind at this time and have a wonderful day.

Operator: Thank you, Mr. Toy. This concludes today's Clover Health second quarter 2024 earnings call and webcast. You may disconnect your line at this time and have a wonderful day. Goodbye.

Speaker Change: Thank you, Mr. Toy. This concludes today's Clover Health second quarter 2024 earnings call and webcast. You may disconnect at this time and have a wonderful day. Goodbye.

Goodbye.

Q2 2024 Clover Health Investments Corp Earnings Call

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