Alan - 2021 Letter to shareholders

• 💚 Insurance Market Leadership
• ☀️ Health Services
• ✨ Horizontal investments
• 🚀 2022 and onwards

You know it, we love radical transparency and building in the open. We believe this transparency builds trust internally and externally. As we share quarterly updates with our investors, we want to keep sharing them with our community.

In October, we published our Q3 2021 letter to shareholders in our blog.

Please find below the email we sent to our investors following the full year of 2021. We slightly edited it to remove sensitive information

Dear Alan friends and investors,

On February 10th, we will be celebrating our 6-year anniversary. What a journey it has been so far, and we’re still just getting started! Most people thought we were crazy to start an insurance company to advance healthcare. Well, without crazy bets, you don't get crazy outcomes.

Focusing on today, first, I want to look at the current market environment. The poor market trading performance of US Healthtech players has made us think a lot about our model: is it the right one?

History has shown that sometimes, it makes sense to ignore Wall Street in the short-term to prove a superior model in the long-term. It is important to know what game we are playing, and ours is a long one.

Going back to first principles:

• Companies that aggregate the demand are the best positioned in the market

• Being a health tech with an insurance license allows us to be a trusted partner and become the health one-stop-shop to our members. This allows us to add/upsell other products and services from across healthcare verticals both to members and employers

• Healthcare SaaS companies are starting to get bundled with insurance companies' offers. Mental health companies are chasing health insurance companies to tap into their distribution channels. Soon enough, it will be the case for every healthcare service and we are well positionned to benefit from this trend

As you know, we are not building a health insurance company. We are building the health & well-being super-app and we are on our way to becoming the category winner, at least in Europe.

Those first principles show us that it is going to be a winning position that will enable us to create a lot of value for all stakeholders involved, and capture part of that value as well.

The recent poor performances of health and insurtechs in the public markets show that how we at Alan approach the revolution of health can be misunderstood in the short term. We believe that it only makes the opportunity bigger. Being contrarian and right yields the best outcomes.

That being said, we also want to grow efficiently and will be looking very closely at controlling burn while growing fast.

In 2021, we validated 5 important assumptions:

1. Insurance is our wedge, and our membership fee based business model is a differentiator in the industry allowing us to clearly charge for the value we provide

2. Our international operations are scaling up, especially in Belgium where we’re growing faster than in France at the same stage of development

3. We are transitioning from the “digital French health insurance company” to the __“healthcare super-app” __

4. Our Mental well-being offer has great initial demand

5. And we have initial traction with Alan as a Service (to be announced soon 🙂).

I’ll refer to our updated flywheels to discuss the progress:

France 🇫🇷

We managed to keep growing fast thanks to the differentiation of our product for our members and companies (simplicity of use, health & well-being services), our tech-led offering, the solidity of our business model (c.100% coverage of claims + membership fee allowing for transparent margin expansion)

We also restored our health insurance margin in the context of high healthcare consumption thanks to price changes for new customers and a very solid renewal campaign. We kept building significant trust with our customers, thanks to our very transparent model. Member churn remained very low (below 6%).

It shows the differentiation of our product, and the solidity of our business model (c.100% coverage of claims + membership fee) and our potential to become the market leader.

As always, we could have done better: we finished the year 6% below our initial target for signed members (which is still not that bad given the environment!)

Belgium 🇧🇪

Reaching 10k signed members by the end of 2021, Belgium is growing faster than France at the same stage of development. The success is a combination of our innovative product that’s unique to the market and an excellent sales approach.

It proves a big part of our international playbook and allows us to be very ambitious next year.

Spain 🇪🇸

We signed over 100 companies representing 2k+ members. The market is very different from France and it took us more time than expected to have the product to win, and ramp-up the sales team on it.

We are confident that we will crack the market in 2022 given the signals we have and the satisfaction with the product from our first customers. We believe it is worth investing in Spain as we see a path to market leadership.

2021 was the year where we wanted to fit the different pieces of our vision together and prove that insurance is the wedge to Alan becoming the leading healthcare super-app.

We are especially proud of the following achievements:

• Launched our mental health B2C and B2B offering

  • Successfully tapped into the very strong demand for a tech-led mental health offering and since launch in September have already signed 1k B2B channel members and 4k B2C channel members (in France). We also have a proof of concept with Selectra (460 employees in Spain), and Protime (250 employees in Belgium).

  • It is the result of our acquisition of Jour (B2C mental health app) in May and our ability to successfully integrate and empower the team.

• Alan Baby managed to build a product that members love. We handled 14k conversations with doctors, midwives and sleep specialists, have 1,000+ ratings and a 4.9 score in the app store. We also generated our first revenue. We are building a B2C muscle that is going to be a difference maker for Alan.

• The expansion of our virtual clinic’s offer allows us to bend both the cost of care and optimise the healthcare journey of our members.

• The launch of Alan Clear this quarter will reshape the digital eye care experience while also allowing us to offer the best possible service and price.

• Introduction of a separate mandatory membership fee to all French members. It better aligns our pricing with the cost of healthcare consumption (pure insurance premium) and the value added by our products and services (membership fee). The increased pricing transparency was well received and allows us to link increases of the membership fee to improvements in our products and services.

We are confident that we are becoming the one-stop-shop for health, body and mind.

We kept building our team and strengthening our culture. We grew by c.200 new Alaners (from c. 260 to 460 Alaners) with very robust onboarding processes and making our employer brand one of the most attractive in Europe for top talent (#1 in France according to LinkedIn).

We work from 9 countries and 76 cities and have a very unique culture that bonds us together. It is a real enabler for future growth.

In 2022, we want our members and customers in France, Spain and Belgium to see Alan as the health & well-being one-stop-shop they trust.

They are part of a community, leveraging an ecosystem of apps that brings continuity in their journey from prevention to access to care to insurance management.

Alan is a brand they love, they are proud of being a member of, and they understand the value we bring to them.

Given the market environment, 2022 is also going to be the year of efficient growth and focus. We have one of the most amazing teams on Earth, and one of the most (if not the most) important missions.

We are going to improve our growth and operating efficiency, while remaining creative (constraints feed creativity) and set foundations to grow even faster, while keeping a controlled burn.

The main things we will do during 2022 to succeed are:

1️⃣ Delivering value on our core insurance offer, in every country we operate, while efficiently scaling our operations.

2️⃣ Demonstrating that our health services increase member love, then increase member LTV and drive member growth.

3️⃣ Perfectly combining our health services with insurance and updating our members' mobile app experience to showcase Alan's offering across health services and insurance

The future is very exciting and we are building our super-app up stage after stage:

2022 will be the year where we strongly push the combination of radical innovation with superb execution.

Our enthusiasm, our passion, our commitment to market leadership, our willingness to change the lives of millions, is going to make a huge difference.

Thank you for supporting us.

Jean-Charles for the Alan team.