Selectquote, Inc. · NYSE:SLQT
Selectquote — Investor Presentation (December 2020)
29 slides from Selectquote's investor presentation, Dec 2, 2020
Slide 1: SelectQuote Investor Presentation December 2020
SelectQuote Investor Presentation December 2020 Exhibit 99.1
Slide 2: Disclaimer: Forward-Looking Statements
2 Disclaimer Forward-Looking Statements This presentation contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use
Slide 3: SelectQuote at a Glance
3 Notes: 1. LTM represents Last Twelve Months financial results.as of 9/30/2020 2. Based on past company experience, average agent productivity increases by ~40% in an agent’s second AEP 3. Adjusted EBITDA and Adjusted EBITDA Margin are Non-GAAP financial measures used to measure operating performan
Slide 4: Key Investment Highlights
4 Key Investment Highlights Large and Growing End Markets Shifting to Meet Evolving Consumer Preferences Purpose-Built Technology Empowering Our Highly Skilled Internal Agent Network Unique Company Culture Developed by Experienced Management Team Simple and Attractive Business Model Driving Profitab
Slide 5: High Degree of Visibility to Accelerating Growth of Senior Population
High Degree of Visibility to Accelerating Growth of Senior Population MA / MS Enrollment Other Medicare Enrollment MA / MS Enrollment as % of Total Medicare Enrollment Demographics MA / MS Enrollment and Penetration Are Growing ($MM) 45.5 52.5 59.9 68.4 76.7 20.0 26.1 35.7 44.7 53.4 25.5 26.4 24.2 2
Slide 6: Market Demands Have Evolved Dramatically
Market Demands Have Evolved Dramatically Consumers Desire Expertise, Simplicity, Specialized Service for Complex Purchasing Decisions Industry Norm What the Market Wants Face-to-face and time-intensive Limited coverage options and agent expertise Limited transparency Few alternatives “One size fits
Slide 7: Our Purpose-Built Technology Empowers Our Agents
Agents enhance lead conversion and maximize revenue opportunity Highly trained, 100% internal agents Our Agents Technology optimizes our lead acquisition, intelligently matches leads to agents and maximizes our return on marketing spend Post-sale client engagement Our Technology Our Purpose-Built Te
Slide 8: Our Approach is Rooted in Sophisticated Technology
8 Our Approach is Rooted in Sophisticated Technology Robust, fully-integrated technology platform drives customer lifetime value / ROI Lead Acquisition Lead Management & Routing Sales Customer Engagement & Lifecycle Management SelectCare Core proprietary CRM and parent system, with sales enablement
Slide 9: Technology Investment Fueling Productivity Gains
9 • Internal wiki powered by AI bot • Replicates inherited knowledge of veteran agents traditionally learned over years • Fully-integrated into sales process • Accelerates new agent learning curve • Improved and highly integrated tools • Focused on most significant persistency drivers • Proprietary
Slide 10: Medicare Plan Advisor (MPA) Overview
10 Overview Medicare Plan Advisor (MPA) • Strategy: ◦ Re-engage consumers we could not contact and/or close through agent-led call model or consumers who prefer to do business digitally • Approach: ◦ Develop an online comparison shopping tool that closely models agent best practices and prioritizes
Slide 11: We Engage in Omni-Channel Lead Acquisition
11 We Engage in Omni-Channel Lead Acquisition
Slide 12: Illustrative Senior Monthly Production
Illustrative Senior Monthly Production SelectQuote is able to dynamically manage the allocation of its agents across seasons Our Product Diversification and Flex Model Impact Retention Submitted Policies AEP OEP AEP/OEP creates seasonal upswing in business volumes with ~70% of MA and MS policies wri
Slide 13: SelectQuote Senior – Overview
13 117 176 356 55 116 249 23 31 65 MA MS DVH PDP Other LTM 1Q FY19 LTM 1Q FY20 LTM 1Q FY21 Medicare Advantage 70% Medicare Supplement 6% Dental, Vision and Hearing 18% Prescription Drug Plan 4% Other 2% SelectQuote Senior – Overview Provides the 65+ Senior market with leading online comparison shopp
Slide 14: SelectQuote Life – Overview
14 Total Life Premium ($MM) Core Premiums 59% Ancillary Premiums 2% Final Expense Premiums 39% SelectQuote Life – Overview • Leading distributor of term life insurance founded in 1985 • SelectQuote was the first term life insurance exchange platform in the U.S. Over 1.75MM plans sold nationwide sinc
Slide 15: SelectQuote Life – Final Expense Overview
15 Life Health Advisors (LHAs) sell Medicare plans during AEP and OEP and then flex over to sell Final Expense the rest of the year SelectQuote Final Expense Premium FY Growth ($MM) SelectQuote Life – Overview – Final Expense Product Basic death benefit to cover funeral expenses via simplified or ev
Slide 16: SelectQuote Auto & Home – Overview
16 50 61 70 LTM 1Q FY19 LTM 1Q FY20 LTM 1Q FY21 SelectQuote Auto & Home – Overview Licensed agents providing expert advice to 35,000+ customers annually(2) Provides unbiased online comparison shopping platform for auto, home and specialty insurance lines “Must have” nature of personal lines P&C crea
Slide 17: Strategic Focus and Competitive Differentiators
Strategic Focus and Competitive Differentiators • Our strategy is to maximize absolute profitability at attractive returns on invested capital divisions • Predictable cash flows are driven by high quality of policies written • Our choice model paired with highly trained, in- house agents and dedicat
Slide 18: What Is Policyholder Lifetime Value?
18 What Is Policyholder Lifetime Value? Under ASC 606, SelectQuote Recognizes the Upfront Commission and the Estimated Value of Renewal Commissions as Revenue in the Period in Which the Policy Is Approved Policyholder Lifetime Value from a MA / MS Policy Components of Policyholder Lifetime Revenue I
Slide 19: How We Maximize Policyholder Lifetime Value
How We Maximize Policyholder Lifetime Value SelectQuote Seeks to Optimize all Components of Policyholder Lifetime Value Acquisition Costs Lead Close Rates Commissions Customer Retention Economies of scale Optimized marketing spend Multi-channel lead scoring Agent leveling system Higher quality leads
Slide 20: Industry Leading Unit Economics
$1,502 $924 $577 SelectQuote Peer A Peer B Revenue per approved MA/MS policy(1) Cost per approved MA/MS policy(2) Adj. EBITDA per approved MA/MS policy(3)(7) Industry Leading Unit Economics Notes: Source: Analysis based on publicly filed documents, Financials based on Medicare / Senior Operating Seg
Slide 21: We Have a High-Growth, Scalable Business Model
244 347 591 110 199 407 102 111 145 32 38 41 Senior Life Auto & Home Corp LTM 1Q FY19 LTM 1Q FY20 LTM 1Q FY21 Adj. EBITDA(1)(2)(3) ($MM) 52 101 165 37 86 157 26 25 32 9 9 10 (19) (19) (34) Senior Life Auto & Home Corporate LTM 1Q FY19 LTM 1Q FY20 LTM 1Q FY21 We Have a High-Growth, Scalable Business
Slide 22: Predictable Cash Flow & Attractive Returns
Upfront Cost First Year Cash Received Renewal Cash Received to Date Cash to be received from polices that have already renewed Future Expected Cash from Renewals 2015 Cost 2015 Revenue 2016 Cost 2016 Revenue 2017 Cost 2017 Revenue 2018 Cost 2018 Revenue 2019 Cost 2019 Revenue 2020 Cost 2020 Revenue
Slide 23: Growing Faster While Using Less Cash
Growing Faster While Using Less Cash 232 18 (87) 266 52 (29) Expectation at IPO Actual 4QFY20 - 1QFY21 ($MM) • IPO provided growth capital for the next several years • 4QFY20 and 1QFY21 exceeded internal forecasts for revenue and EBITDA • Accelerated growth would typically drive greater cash consump
Slide 24: Our Attractive and Scalable Platform Is Growing
24 Our Attractive and Scalable Platform Is Growing… Our Platform Provides Ample Support for Future Years of Growth with Minimal Ongoing Working Capital Requirements Maximize policyholder lifetime value Increase size and enhance productivity of agent force Deepen consumer penetration and drive cross-
Slide 25: Cross-Sell Example - Growing Final Expense Business
25 Cross-Sell Example - Growing Final Expense Business Features of the SelectQuote Platform: SelectQuote Currently Offers Over 20 Products and Continuously Evaluates New Opportunities Est. 1985 Est. 2010 Est. 2011 Life Senior Health Auto & Home Developed relationship with blue-chip carriers Broad mu
Slide 26: Supplemental information
Supplemental information 26
Slide 27: LTM 1Q FY21 Adjusted EBITDA to Net Income Reconciliation
27 LTM 1Q FY21 Adjusted EBITDA to Net Income Reconciliation LTM 1Q FY 2021 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 407,288 $ 145,183 $ 40,674 $ (2,628) $ 590,517 Operating expenses (250,708) (112,712) (30,850) (30,986) (425,256) Other expenses, net — — — (38) (38)
Slide 28: LTM 1Q FY20 Adjusted EBITDA to Net Income Reconciliation
28 LTM 1Q FY20 Adjusted EBITDA to Net Income Reconciliation LTM 1Q FY 2020 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 198,610 $ 110,920 $ 37,521 $ (335) $ 346,716 Operating expenses (112,292) (86,132) (29,010) (18,333) (245,767) Other expenses, net — — — (26) (26) Adj
Slide 29: LTM 1Q FY19 Adjusted EBITDA to Net Income Reconciliation
29 LTM 1Q FY19 Adjusted EBITDA to Net Income Reconciliation LTM 1Q FY 2019 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 109,928 $ 101,864 $ 32,208 $ (272) $ 243,728 Operating expenses (73,048) (76,288) (23,180) (19,193) (191,709) Other expenses, net — — — (10) (10) Adju