Clover Health Investments(CLOV) - 2022 Q4 - Annual Report

Financial Performance - Non-Insurance revenue for the year ended December 31, 2022, was $2,380.1 million, a significant increase from $667.6 million in 2021, reflecting a growth of 256.5%[167] - Total revenues for 2022 reached $3,476.7 million, a significant increase from $1,472.0 million in 2021, representing a growth of approximately 136%[216] - The company reported a net loss of $338.8 million for 2022, compared to a net loss of $587.8 million in 2021, reflecting an improvement of approximately 42%[216] - The net loss for the year ended December 31, 2022, was $338.844 million, a decrease from a net loss of $587.756 million in 2021, representing a 42.3% improvement[220] - Cash flows from operating activities resulted in a net cash used of $203.926 million in 2022, compared to $282.326 million in 2021, indicating a 27.8% reduction in cash outflow[220] Medical Claims and Expenses - Net medical claims incurred for Non-Insurance Beneficiaries increased by $1,902.8 million, or 122.7%, to $2,460.9 million for the year ended December 31, 2022, compared to $705.4 million in 2021[171] - Net medical claims incurred for 2022 were $3,454.0 million, up from $1,551.2 million in 2021, indicating an increase of about 123%[216] - The Medical Care Ratio (MCR) for Non-Insurance was 103.4% for the year ended December 31, 2022, compared to 105.7% in 2021, indicating improved efficiency[167] - General and administrative expenses increased by $22.6 million, or 12.2%, to $207.9 million for the year ended December 31, 2022, driven by higher professional fees and commissions[172] Membership and Provider Network - As of December 31, 2022, the company had approximately 1,560 contracted participant providers managing primary care for 164,887 Non-Insurance Beneficiaries across 21 states[157] - The company had 88,627 Insurance members as of December 31, 2022, up from 68,120 in 2021, reflecting a growth of 30.1%[160] - The company expanded its Medicare Advantage (MA) plans to 13 new counties in 2023, bringing the total to 220 counties across eight states[158] - The company strategically reduced the number of ACO REACH participating physicians in 2023, resulting in a shift in beneficiary alignment[157] Cash and Assets - Cash and cash equivalents decreased to $103.8 million in 2022 from $300.0 million in 2021, a decline of about 65%[213] - The total assets of the company decreased to $808.6 million in 2022 from $950.8 million in 2021, a reduction of approximately 15%[213] - Cash, cash equivalents, and restricted cash at the end of the period were $186.213 million, down from $299.968 million at the end of 2021, a decrease of 37.8%[220] Liabilities and Equity - Total current liabilities increased to $440.656 million in 2022 from $372.624 million in 2021, reflecting a 18.3% rise[797] - The company's unpaid claims as of December 31, 2022, amounted to $137.4 million, with a significant portion being incurred but not reported reserves[211] - The premium deficiency reserve decreased significantly from $110.628 million in 2021 to $16.388 million in 2022, a reduction of 85.2%[797] Investments and Financial Strategy - The company has diversified its investment portfolio to manage credit risk by investing in high-quality securities[205] - The company’s investment policy focuses on capital preservation, with a portfolio primarily invested in U.S. Treasury fixed maturity securities, ensuring low credit risk[790] - The company acquired Character Biosciences, Inc. Series A preferred shares for $250, indicating ongoing investment in new technologies[220] Stock-Based Compensation - The company reported a stock-based compensation expense of $164.305 million in 2022, slightly increasing from $163.723 million in 2021[220] - Stock-based compensation for the year was recorded at $163.72 million, indicating a substantial investment in employee incentives[802] - The company has recognized stock-based compensation expenses using an accelerated attribution method for performance-based awards[202] Operational Initiatives - The company has initiated an executive coaching program for key leaders to enhance performance and decision-making capabilities[197] - The company is actively monitoring inflation impacts on operating expenses and is prepared to respond to potential inflationary pressures[206] Financial Reporting and Controls - The company noted that internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial statements[803]