Oscar Health, Inc. · NYSE:OSCR
Oscar Health — Q4 2021 Earnings Presentation
16 slides from Oscar Health's earnings presentation, Feb 10, 2022
Slide 1: Fourth Quarter and Full Year 2021 Earnings Presentation
HIOSCAR.COM Oscar Health, Inc. Fourth Quarter and Full Year 2021 Earnings Presentation February 10, 2022
Slide 2: Safe Harbor Statement and Forward-Looking Statements
HIOSCAR.COM 2 Safe Harbor Statement and Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact contained herein are forward-looking statements
Slide 3: Strong Membership Gains to Close Out the Year
HIOSCAR.COM 3 Strong Membership Gains to Close Out the Year ● Total quarter end membership increased 49% YoY to 598,200 in 4Q21 from 402,000 in 4Q20 ● Membership growth was primarily driven by growth in the Individual book of business during the Open Enrollment and Special Enrollment Periods, as wel
Slide 4: Premium Growth Outpaced Membership Growth
HIOSCAR.COM 4 44% Premium Growth Outpaced Membership Growth ● Direct and Assumed Policy Premiums increased 59% YoY driven by membership growth, including SEP growth, and business mix shift to higher premium Silver and MA plans Direct and Assumed Policy Premiums (millions) +59%
Slide 5: 4Q21 Premiums Earned Up ~3x, Driven by Strong Membership Growth and Lower Quota Share
Premiums Earned (millions) HIOSCAR.COM 5 4Q21 Premiums Earned Up ~3x, Driven by Strong Membership Growth and Lower Quota Share 4Q21 Premiums Walk (millions) Quota Share as % of Premiums before Ceded: 68% 27% +214% ($213M)
Slide 6: 4Q21 MLR Lower YoY due to PPD and One-Time Items
HIOSCAR.COM 6 4Q21 MLR Lower YoY due to PPD and One-Time Items ● 4Q21 MLR of 97.9% improved 10 pts YoY driven largely by favorable PPD in 4Q21 and certain one-time items in the comparable period ● Net COVID costs in 4Q21 were in-line with expectations 4Q21 MLR FY 2021 MLR ● FY 2021 MLR of 88.9% incr
Slide 7: 4Q21 Admin Ratio Lower YoY Driven by Op Leverage, Efficiencies, and Repeal of the HIF
HIOSCAR.COM 7 4Q21 Admin Ratio Lower YoY Driven by Op Leverage, Efficiencies, and Repeal of the HIF ● 4Q21 InsuranceCo Administrative Expense Ratio of 24.5% decreased ~12 pts YoY ● The YoY decrease was largely driven by fixed operating leverage, variable expense efficiencies, and the repeal of the H
Slide 8: 4Q21 Combined Ratio Lower YoY Due to Lower MLR and Admin Ratio
HIOSCAR.COM 8 4Q21 Combined Ratio Lower YoY Due to Lower MLR and Admin Ratio 4Q21 Combined Ratio FY 2021 Combined Ratio ● FY 2021 InsuranceCo Combined Ratio of 110.7%, reflecting the sum of the MLR and InsuranceCo Administrative Expense Ratio, was roughly flat YoY ● The lower benefit of the YoY Insu
Slide 9: Executing on Path to Profitability Demonstrated by Lower YoY Adjusted Administrative Expense Ratio
HIOSCAR.COM 9 Executing on Path to Profitability Demonstrated by Lower YoY Adjusted Administrative Expense Ratio ● 4Q21 Adj. Administrative Expense Ratio of 34.4% decreased ~15 pts YoY ● The YoY decrease was largely driven by fixed cost leverage, variable efficiencies, and the repeal of the HIF in F
Slide 10: 4Q21 Adj. EBITDA Loss Decreased due to Improved Combined Ratio
HIOSCAR.COM 10 4Q21 Adj. EBITDA Loss Decreased due to Improved Combined Ratio 4Q21 Adjusted EBITDA FY 2021 Adjusted EBITDA ● FY 2021 Adjusted EBITDA loss of ($430M) increased $27M YoY ● The increase in the loss YoY was largely driven by higher membership volume and an essentially flat InsuranceCo Co
Slide 11: Oscar's Differentiated Member Experience is Driving Strong Top-Line Growth
HIOSCAR.COM 11 44% Oscar’s Differentiated Member Experience is Driving Strong Top-Line Growth ● Direct and Assumed Policy Premiums are expected to increase ~70% on CAGR basis from 2019 - 2022e ● Strong top-line growth driven by membership growth, as well as, business mix shifts to higher premium pla
Slide 12: Disciplined Pricing Leading to Limited MLR Volatility Despite Strong Membership Growth and COVID/SEP Impacts
HIOSCAR.COM 12 44% Disciplined Pricing Leading to Limited MLR Volatility Despite Strong Membership Growth and COVID/SEP Impacts ● Robust membership and premium growth has driven limited MLR volatility over the past several years ● MLR performance demonstrates disciplined and balanced pricing strateg
Slide 13: Robust Top-Line Growth Driving Operating Leverage
HIOSCAR.COM 13 44% Robust Top-Line Growth Driving Operating Leverage ● InsuranceCo Administrative Expense Ratio projected to decline ~550bps between 2019 and 2022e ● Strong top-line growth expected to continue to drive InsuranceCo Administrative Expense Ratio lower as operating leverage and tech eff
Slide 14: Full-Year 2022 Outlook
14 Full-Year 2022 Outlook Low Direct & Assumed Policy Premiums $6,100M Medical Loss Ratio 84.0% InsuranceCo Admin Ratio 19.5% Combined Ratio 104% High $6,400M 86.0% 20.5% 106% Adjusted Administrative Expense Ratio 24% 26% (1) Oscar has not provided a quantitative reconciliation of forecasted Adjuste
Slide 15: Appendix: Adjusted EBITDA GAAP Reconciliation
HIOSCAR.COM 15 Appendix: Adjusted EBITDA GAAP Reconciliation December 31, 2021* December 31, 2020* Net loss $ (197,742) $ (189,870) Interest expense 397 3,514 Other expense 1,201 - Income tax expense (benefit) (111) (481) Depreciation and amortization 3,970 3,295 Stock-based compensation/warrant exp
Slide 16: Appendix: Adjusted EBITDA GAAP Reconciliation
HIOSCAR.COM 16 Appendix: Adjusted EBITDA GAAP Reconciliation December 31, 2021* December 31, 2020* Net loss $ (571,426) $ (406,825) Interest expense 4,720 3,514 Other expense 1,201 - Income tax expense (benefit) 846 1,045 Depreciation and amortization 14,605 11,285 Stock-based compensation/warrant e