Alan - 2023 Q1 Letter to Shareholders

As we enter Q2, we are excited to continue executing our plan to create the One-Stop Health Partner category. To make this positioning a reality, we have revamped our global narrative and achieved several significant product milestones, including starting the roll-out of our health partner product bundle, addressing pain points for admins and members, and confirming the superiority of our solutions through external audits. We have also passed the 400,000 signed members milestone.

We are also focused on scaling our operations and have made significant progress in improving our cost to serve.

Finally, we believe AI is the next tidal wave in the future of healthcare. Over the past year, AI has become the main focus area for Charles, our CTO. We believe that AI is going to change the rules and re-shuffle everything, from the way we work, the products we build, to how we differentiate ourselves. We have many exciting innovations in the oven.

At Alan, we are committed to being at the forefront of this change and exploring the possibilities that this new technology brings while remaining member-obsessed.

7 years old, the age of reason for Charles and his schoolyard best friend Jean-Charles

A promising start to the year 🚀

We over-performed in our year-end 2022 reported figures

	2022 (final)	2022 (initial)
Signed members (k)	384	383
Signed ARR (€m)	259	258
Net income (€m)	-67	-69

Due to the nature of our business, actual historical numbers evolve slightly over time post the balance sheet date. In 2022 all four of our KPIs improved vs. the numbers we reported in the Q4 2022 letter to shareholders. The €2m on net income overperformance is equivalent to paying for c.15 engineers.

Key numbers at the end of Q1 2023

	End of Q1	Y-o-Y growth
Signed Members (k)	401	38.7%
Signed Fully Loaded ARR (€m)	274	51.2%
Alaners (started contracts)	535	8.5%

We continue to improve our economics, strengthen our sales, and expand our reach in France 🇫🇷

We have a strong momentum on discoveries and opportunities.
We have a stronger brand: our SEO traffic is increasing (+66% in Q1 2023 vs Q4 2022), and so are inbound leads (+100% in retail and tech vs 2022)
We are actively discussing with the key stakeholders of the public system health insurance reform, in order for us to proposer the best offer to cover the public administrations

We over-performed and strengthen our positioning in Spain 🇪🇸

We closed Q1 with 9.4k signed members, a 29% increase from the end of 2022 and ahead of budget closing several large and medium deals like Revolut and Aircall.
We have increased members’ adoption rate. We achieved a 77% adoption rate within 2 months for >50% contribution companies.
We are strengthening our positioning.
We are handling 85% of all psychology consultations through our own clinic.

We are smoothly transitioning to the bundle experience in Belgium 🇧🇪

Our bundle narrative is resonating well, and we're continuing to gain traction with several Very Large accounts and existing customers
We have made self-serve available for small companies with 2-9 employees, allowing them to discover our products, select the most appropriate, and sign a contract autonomously.

We are increasing the talent density of our team

The team reached 535 Alaners at the end of Q1 2023 having hired 42 Alaners over the first quarter of 2023

Alaners have taken over new roles, including:
- Virak Nou is now Insurance Community Lead
- Sébastien de Larquier is now Data Community Lead
- Marion Deneuville is taking over our Insurance Offer Area
Our offer acceptance rate is high: 87% of offers accepted in Q1 vs 79% in 2022.
We are increasing talent density through reducing regretted attrition: we have made good progress on this aspect. In Q1 regretted attrition was less than 30% (vs 39% in 2022).

Fast forwarding the Health Partner Category Creation ⏭️ 🩺

A single app for your health

Following the decision to bundle our Mind and insurance offers to position Alan as the one-stop health partner, we took the decision to integrate the Mind app into the main app. The goal is to become part of the daily routine of our members.

We will offer therapy session bookings and mental health videos directly in the Alan app from April 30th (starting in France).
We will integrate the Mind programs during Q2 (eg: meditation, breathing exercises, and the self-confidence program).
Our vision for the Alan app is for it to be a friend our members can turn to for their health, providing daily check-ins and guidance towards simple actions that compound to better wellbeing.

This is how the app will look like 👇

In Q2, we will share modalities and organization of the app at the global level. Our goal is to globalize the services we develop in a single app while accommodating local needs in 🇫🇷, 🇧🇪, and 🇪🇸.

Health partner experience for Members

Our members continue to give us positive feedback with a stable NPS of 65, and we are excited to see a significant increase in adoption of our prevention assessment.

In Q1, we have released the following features for members:

Release	Description
New Programs	We launched two additional programs for our members facing Self-confidence and Back Pain challenges !
Kids glasses	Members can now order glasses from the Alan app for their kids !
Delightful claim journeys	We clarified the experience for Pending claims (12% less Care contacts about that topic) and for Pharmacy invoices (recently released)
Internalized Prévoyance claims	We now internally process 100% of our members’ Prévoyance claims which guarantees a higher quality of service and adds to our differentiation
Call Back & Voice message support	We rolled out the ability to get called back or to leave voice messages instead of chatting with us. It improves the experience of our less tech-savvy members and removes a common objection in sales conversations while only concerning <5% of our members !

Health partner experience for Customers

Customer NPS remains strong at 51, though it decreased slightly compared to Q4 2022.

We are committed to understanding our customer needs and satisfaction levels more comprehensively, and are reviewing our measurement methods to better isolate drivers of satisfaction (such as pricing vs product).

In Q1, we have released the following features for customers:

Releases	Description
Health Partner migration	New customers started signing contracts for our health partner offer in February. We enabled the experience for 300+ 🇫🇷 customers in March as a first wave of migration of our portfolio
New homepage for customers	We shipped a new homepage for our customers which better highlights the value we provide across insurance and health services.
Cover-by-default	We rolled out our cover-by-default mechanism to 100% of companies. Employees are covered right away, avoiding payroll regularisations (-20% in March) and compliance risks
Integration with Workday	We shipped a new integration with Workday to automate employee movementsWe are deploying it to some of our largest clients (e.g. People & Baby, 7K employees - saving them 200 hours / year)
New offers for Individuals	We launched 2 new offers for TNS (individual professionals) to better cater to their needs

⭐ We are committed to enhancing the member and customer experiences further and have set the adoption of our health stories (eg: back pain, eyewear) as our north star metric, which we are currently working on measuring.

Scaling our operations 💰📉

Cost to serve has been a key priority over the past quarter, and we have reduced it thanks to strong initiatives ongoing across the company such as customer support’s tools, increased automation rate, successful progress on cost optimization of key vendors.

Major release	Description
Claim management savings	We achieved €850k annualized savings thanks fraud detection, reduction in contact rate to our Care team, automation of document processing and negotiations with external providers
🌎 Tooling for health professionals	We improved our tools and organization prior to scaling to 200+ health professionals globally as we roll out our health partner experience to the entire portfolio to limit the cost to serve increase
🌎 Contract management	🇫🇷 and 🇧🇪 now share the same tools to manage contracts. We have also automated how we update our standard offers in France which used to take 1000 hours / year
🌎 Faster deployment	We divided deployment time by 2+ on prod environments (20=>8 minutes)

POV: you're running out of patience and you just want to eat the cake

Looking forward: Embracing AI to reinvent healthcare 🤖

At Alan, we recognize the paradigm shift that is occurring with the emergence of pretrained AI models, particularly Large Language Models (LLMs). We strongly believe that companies that harness the power of AI to transform themselves will have a significant advantage over those that do not.

Our AI strategy aims to position Alan as the showcase example of an AI-enabled company by the end of 2023, revolutionizing our daily operations, products, and services. We have been working on this for over a year.

We have the opportunity to impact everyone through AI: educating Alaners to become more productive with AI, redefining roadmaps to integrate AI and using internal tools to develop and deploy AI models. We believe these practices will help increase differentiation through personalization and reduce cost to serve.

Our strengths ideally position us to capitalize on the value this new tech can bring. These strengths include our industry-leading data backend, trust with our members, obsession for great and integrated products, experienced team, and our capability to build fast.

We are working on a range of initiatives, including empowering our customer service team with automated answers, transcribing documents for faster reimbursement, personalizing emails for more effective communication, and making it super simple for members to find their coverage details.

This is only the beginning. We hope to get significant gains as usages mature, technology improves and the team gets more and more accustomed to this new paradigm. We will announce a lot more soon!

Conclusion

We enter Q2 in a solid position, and we are more hungry than ever to transform health at scale. The potential for innovation is unlimited.

We are in the middle of a transformation for Alan from health insurance to the one-stop health partner that is the daily ritual of members & the best HR investment a company can make. It is even more exciting to surf the AI tidal wave to accelerate this transformation, and we believe Alan is the best-positioned company in Europe to deliver on this.

Working towards this future together is truly thrilling.

Thank you for supporting us. Let’s continue to build the future of healthcare together.

Published on 24/04/2023