Clover Health Investments, Corp.

Ladies and gentlemen, thank you for standing by, and welcome to the Clover Health Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 1 on your telephone. As a reminder, today's program may be recorded. And now I'd like to introduce your host for today's program, Dylan Sullivan. Please go ahead.

Welcome to Clover Health's inaugural earnings call, where we will discuss Clover Health's fourth quarter and full year 2020 results, our 2021 financial outlook, and a comprehensive update on the business. Joining me today are Vivek Garipalli, Chief Executive Officer, Andrew Toy, President and CTO, and Joe Wagner, Chief Financial Officer. Before turning the call over to Vivek, I'd like to let you know that today's call is being broadcast to Clover Health's Investor Relations website. During today's presentation, we will make forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or future financial or operating performance. Our expectations and beliefs regarding these matters may not materialize, and actual results in financial periods are subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include those set forth in the press release we issued earlier today, as well as those more fully described in our filings with the Securities and Exchange Commission. Forward-looking statements in this presentation are based on information available to us as of the date hereof, and we cannot at this time predict the full extent of the impact of COVID-19 pandemic and any resulting business or economic impact. We disclaim any obligation to update any forward-looking statements except as required by law. During the call, we'll make reference to our financial measures that do not conform to generally accepted accounting principles, including but not limited to adjusted EBITDA and normalized medical care ratio, or MCR. This information may be calculated differently than the non-GAAP data presented by other companies. Quantitative reconciliations of our non-GAAP financial information to the directly comparable GAAP financial information appears in today's earnings release. With that, I'll turn the call over to Vivek. Vivek?

Thank you for joining us today. I'm honored to welcome you to our first earnings call as a public company. And while we don't consider ourselves a traditional health plan, we are the first health insurer to have gone public in over 15 years. 2020 was a difficult year for healthcare as our industry rose to the numerous challenges posed by the pandemic. Nevertheless, it was also a transformative year for Clover. We scaled our offering and serviced more than 58,000 Medicare Advantage members by year end and realized over $670 million in total revenue for the year. Additionally, despite COVID-related headwinds, we had another solid annual enrollment period this year. As of February 2021, we had more than 66,000 members, an increase of approximately 20% as compared to February 2020. We're proud of how we've scaled our technology platform. As of the end of the year, approximately 32,400 members, or 56% of total membership, were managed by a primary care physician that was live on the Clover Assistant. This represents a 43% increase year over year. underpinned by our ability to expand coverage despite inherent impact new members have on the overall growth rate. In fact, 63% of returning members and 46% of new members were managed by a PCP that was live on the Clover Assistant. This proliferation of our technology has had a clear impact on our margin profile. Returning members that see a physician who was live on the Clover Assistant by year end 2019 at a full-year 2020 MCR of approximately 83% after normalizing for estimated one-time COVID-related costs. And as a reminder, this MCR is at three stars. We built the Clover Assistant to reduce variability in physician care and to enhance the lives of our members. The traction we have seen to date demonstrates the value of our scalable platform and overarching go-to-market strategy. As we reflect back in 2020, we would be remiss not to consider the global impact of the COVID-19 pandemic, not only in healthcare, but in consumer behavior as the pandemic accelerated the digitization of everything around us. Our technology-first business model enabled us to take action, including making prescriptive investments to make virtual care accessible for our members. More consistent and systematic use of technology across the patient journey has markedly improved the service we offer our members. The COVID-19 pandemic upended all precedent and historical trends. It created opportunities but also infused uncertainty. From a financial standpoint, on a full-year basis for 2020, the deferral or elimination of certain healthcare services due to COVID-19 had a slight net benefit to our medical care ratio, offsetting testing and other treatment costs that were directly attributable to the pandemic. That benefit was most pronounced during the second and third quarters of the year. During the fourth quarter, similar to what other insurers experienced, that full-year benefit was somewhat diminished as a result of higher levels of COVID-specific care and treatment for our population, combined with the increased utilization of services that had been deferred in previous quarters. Our full-year normalized MCR for 2020 was 90.5%, which represents an over 800 basis point improvement over full-year 2019, resulting primarily from operational efficiency and the increase in the number of members managed by a PCP, that uses the Clover Assistant. While COVID-19 has negatively impacted aspects of our financial results in the fourth quarter, we entered 2021 with strong momentum, and we are excited by the opportunities ahead of us. We are in the process of integrating new revenue streams, expanding our addressable market through the launch of our direct contracting entity, Clover Health Partners. We are confident in our ability to drive adoption of the Clover Assistant and scale our business through both vectors. Since this is our first earnings call as a public company, Andrew Toy, our president and CTO, will take a moment to provide a brief overview of Clover Health and our technology platform, the Clover Assistant. Then I'll come back and outline our growth initiatives before our CFO, Joe Wagner, details our financial results and future expectations. After which, we will be happy to take your questions. We have also posted a shareholder letter on our investor relations website, which I encourage everyone to read. With that, I'll turn the call over to Andrew.