Clover Health Announces Business Transformation Initiatives to Accelerate Path to Profitability

Net annualized savings from initiatives expected to be approximately $30 million beginning in 2024

Clover Health Investments, Corp.(“Clover” or “Clover Health” or “the company”), announced business transformation initiatives to accelerate the company’s path to profitability, including an agreement to move its core plan operations to UST HealthProof’s integrated technology platform and additional corporate restructuring actions. These initiatives are expected to generate net annual cost savings of approximately $30 million beginning in 2024.

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“Our focus at Clover is helping physicians detect and treat disease sooner via Clover Assistant,” said Andrew Toy, CEO of Clover. “Our partnership with UST HealthProof will allow us to rapidly improve the efficiency of non-strategic core MA operations and greatly reduce our administrative costs. We’re absolutely focused on delivering a sustainable, profitable Clover Heath to our members and investors, and this is a huge step in that direction.”

“This transformative partnership between UST HealthProof and Clover Health, two tech forward companies, is expected to unlock value by permitting each organization to focus on its core strengths. Clover will continue to innovate with our strong benefits, wide provider network and differentiated capabilities in Clover Assistant and Clover Home Care. Meanwhile, UST HealthProof’s experience working with health plans will accelerate our access to scaled operational efficiencies and strong insurance operations,” added Jamie Reynoso, Clover’s CEO of Medicare Advantage.

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“We are committed to Clover’s long-term success and expect to unlock significant value, and deliver real savings through increased efficiency and operational excellence,” said Kevin Adams, CEO of UST HealthProof.

In addition to the UST HealthProof partnership, Clover also announced it recently conducted an independent reduction-in-force to better align its SG&A cost structure with its revenue base. This restructuring resulted in the elimination of approximately 10% of Clover’s workforce. The company anticipates that it will continue to deliver additional efficiencies in future periods via continued focus on streamlining operations, improving its technology platform and continuing to pursue a disciplined growth strategy focused on its core markets.

The company expects to record a total charge of approximately $7 to $9 million in 1H2023 to implement the UST HealthProof arrangement and the additional internal restructuring actions.

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