Alan - 2023 Q2 Letter to Shareholders

• 1️⃣ Step-back on Q2 performance
• 2️⃣ Controlling cash burn and market uncertainty
• 3️⃣ Better positioned than ever
• What’s ahead?

We continue to scale our activities in France 🇫🇷

• We expanded our member base by 19k in France.
• We are seeing great momentum in the Large Companies segment (>300 employees) and greenshots within Very Large companies (>3,000 employees).
• Our margin is now sustainably in double digits and follows the annual track record of expansion that we have established.
• We released 4 new offers for independents to better cover the variety of their profiles and needs.
• Given the market potential and the unique timing, we decided to make civil servant reform a key priority.
• Our one-stop health partner positioning resonates better and better with the market.

• We see under-performance in inbounds (-13% companies created in France compared to last year), degrading B2B Market conditions 
• The current macro environment is leading to intensified price sensitivity from customers.

We over-performed in Spain confirming our strong market positioning 🇪🇸 

• We have surpassed the 10,000 Spanish members mark!
• We have beaten our plan in member growth, ARR growth, and margin. 
• We confirmed that our health services (Alan Clinic, mental health offering, etc.) are a growing asset to boost member satisfaction, create a new product category and increase brand awareness:

  • 74% of members are accessing therapy for the first time thanks to Alan.
  • Our mental health service is rated 4.9/5.

Sustained growth and increased margins in Belgium, despite tough economic conditions  🇧🇪

• We have expanded our Belgian membership base by 2,600 over the quarter reaching 29k members (+93% YoY).
• Belgian ARR YoY growth is +124%. 

  • The economic conditions in Belgium have led to many companies slowing down hiring, and increasing layoffs.
• We made great progress on margin, +6.8pp compared to the previous quarter.
• We just launched the self-serve offer we just launched in Belgium to allow small companies (2-9 employees) to select and sign their offer autonomously.

All thanks to huge investments in product differentiation as a one-stop-health partner

• 68% of Key Accounts reacted positively or super positively to our pitch and recognized the need for more support on health and specifically on mental well-being topics.
• We have amazing feedback from members & customers on our product; they even fight on our behalf on social media, and we are very thankful for that. We don’t take it for granted. 
• Every week, we hear new members' stories that demonstrate our life-changing impact on them.

We are reducing the cost to serve

• We have reduced our cost to serve by 11% year on year
• This progress has been made possible by:

  • Automated Claim document processing:  We have increased the automation rate by 7% this quarter.
  • Care contact decrease: Strong collaboration between Care and Product led to a smoother user experience and a 28% reduction of care contact vs 2022.
  • Better supervision of overpayments: Important focus was placed on investigating and remediating overpayments. The underlying issue was found, resolved, and will lead to a significant reduction of the current overpayments stock.

We keep increasing the talent density of our team

• We hired 35 new Alaners over the second quarter of 2023, bringing the team to 520 Alaners.

  • Experienced talent has joined the team: Hugo Venturini (ex CTO @Qwant), Marvyn Leroy (ex Staff Software Engineer @Uber)..
• We co-founded Generative AI company Mistral AI as non-executive Advisors, with the incredible co-founders Arthur Mensch, Timothée Lacroix et Guillaume Lample to produce world-class European Large Language Models by the end of the year. 

  • It will help us to be at the forefront of research and access state-of-the-art models. 

Solid foundations

A true impact

• Built a Top 20 (out of >400) health insurer in France.
• Built an industry-redefining insurance product and a category-creating one-stop health partner product that:

  • is valued with a 62 NPS from members and a 56 NPS from Admins
  • insures over 430k members and is growing fast!
  • 79% of members downloaded the app and 53% of them open it monthly
• Expanded operations to Spain and Belgium
• Earned the trust of 20,000+ companies who understood the value of investing in the physical and mental health of their employees and have chosen Alan as their solution.

Health issues are becoming a hot topic, companies can no longer avoid treating them

• The difficulty to access affordable care increased, leading 42% of French individuals to forgo treatment. 
• The rise in musculoskeletal (+60% in 10 years) and mental health disorders (60% of employees said they were feeling stressed in 2022), demand a proactive approach that the system falls short of providing.
• Finally, 88% of employees consider that their company is responsible for their mental well-being

We are demonstrating Alan is the best HR investment 

• Ordinary diseases, facilitating access to care with Alan Clinic
• Mental well-being with Alan Mind therapy programs
• Musculoskeletal disorders with Alan Back Pain program

Our flywheels to the unstoppable growth

• We bring significantly more value on insurance & prevention both to members & customers.
• We can demonstrate the return on investment of picking Alan (less absenteeism, more engagement, more attractivity).
• We will become more and more competitive over time because we have a better cost structure on claims & servicing.

• 1️⃣ Lead the one-stop health partner category

  • Increase adoption of our health stories by building daily routines for members and a complete revamp of our member experience.
  • Beyond members, focus on the customer health partner experience to ensure that customers perceive and value us as the solution addressing their specific health-related needs (e.g. burnout) with simple, actionable, turnkey recommendations
  • Accelerating our go-to-market on every segment, proving ourselves as the best HR investment.
• 2️⃣ Continue reducing our cost to serve per member by investing in automation, process, and product evolutions, combating fraud, and reducing claim overpayments.