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By
the end of 1999, HealthExtras emerged as an established, publicly
traded company with over 100,000 members and annualized revenue
in excess of $15 million.
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Nineteen
ninety-nine was an important and productive year for HealthExtras.
At the beginning of the year, HealthExtras was a development
stage company with a handful of employees and no revenue.
By the end of the year, HealthExtras emerged as an established,
publicly traded company with over 100,000 members and
annualized revenue in excess of $15 million.
Building
on 1998's market research and product development efforts,
in 1999 HealthExtras began addressing the huge, underserved
market for affordable health and disability insurance.
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40 million American families do
not have health insurance,
-
60%
of health plans limit benefits to $1 million or less…exposing
families to significant financial risk from a major
medical event, and
-
66%
of Americans have no long-term disability insurance.
For
most families access to inexpensive catastrophic insurance
has not been available because of the traditional broker
distribution system. Brokers are compensated as a percentage
of premium; accordingly, they are not incentivized to
sell low-priced insurance. HealthExtras eliminates the
broker barrier by capturing the operating efficiencies
and vast reach of the Internet.
Throughout
1999, HealthExtras entered into marketing relationships
with the largest financial institutions and associations
to drive consumers and small businesses to our web site
and promote HealthExtras' health and disability insurance.
Through these collaborative marketing relationships, HealthExtras
reaches over 60 million households and 4 million small
businesses, while avoiding the broker distribution system
and the costly proposition of relying solely on expensive
television, print and radio advertisements to drive sales.
In
December, 1999 HealthExtras raised $55 million through
an Initial Public Offering (IPO) of 5.5 million shares.
With the IPO, of course, comes increased accountability
to our shareholders. Recognizing this, HealthExtras employees
- from our senior management to our customer care representatives
- are committed to increasing our value to shareholders
by increasing our value to customers. To that end, we
achieved a number of key objectives:
-
We
defined a profitable business model…our variable revenues
exceed our variable expenses.
-
We
refined a value proposition utilizing Christopher Reeve
that resonates with consumers and small businesses.
-
We
added top-quality insurance partners and diversified
our product portfolio.
We
will continue to build on these accomplishments to become
the leading source for affordable health and disability
insurance for consumers and small businesses.
Lastly,
along with you, I am disappointed in the recent performance
of our stock price. Unfortunately, HealthExtras has been
categorized with a number of e-health companies that are
focused on owning "space" rather than making a profit.
HealthExtras has a sound business model, we do not sell
information or banner ads; we sell a product that is inherently
profitable. We will continue to execute our business strategy
and our stock price will take care of itself.
Thank
you for your support.
Sincerely,
David
T. Blair,
Chief Executive Officer
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