EverQuote, a leading player in the online insurance marketplace and listed on Nasdaq, is making strategic changes to its business operations. The company, known for connecting insurance shoppers directly with providers across various insurance types, has announced its decision to exit the health insurance vertical.
The health insurance vertical, which catered to the Medicare and Under 65 health insurance market through a direct to consumer agency (DTCA), constituted about 10% of EverQuote’s revenue in the fiscal year 2022.
This strategic decision comes as the company finds itself contending with an increasingly unpredictable regulatory environment that necessitates significant capital investment and scale for effective competition. By shifting focus onto its core verticals and streamlining operations, EverQuote seeks to bolster its financial performance and secure a stronger competitive position in its chosen markets.
The move to exit the health insurance vertical forms a part of a larger strategy to streamline the business and significantly reduce non-marketing operational costs. The company is aiming for a cost reduction of over 15% per annum. Alongside this, EverQuote is also implementing a workforce reduction plan that could incur severance charges between $2.0m and $3.0m. These charges will be primarily recognised in the second quarter of 2023. EverQuote is further assessing the potential impact of this decision on its balance sheet, with updates expected to be announced during the second quarter earnings call.
EverQuote CEO Jayme Mendal stated, “We are making the strategic decision to exit an area that requires significant capital investment and scale to effectively compete amid an increasingly unpredictable regulatory environment. We are confident that by increasing strategic focus on our core verticals and streamlining operations, we will position EverQuote to improve financial performance and build a stronger competitive position in our chosen markets.”
Further adding to this, EverQuote’s CFO, Joseph Sanborn, emphasised, “Our team remains laser-focused on closely managing costs and driving operating efficiencies in the business. We believe that the actions we are taking to streamline our operations will better position EverQuote to drive more sustainable growth and deliver a greater return on capital investment.”
In terms of financial reporting, EverQuote will announce its second quarter results for 2023 after the market closes on August 7, 2023. Post-release, management is scheduled to host a conference call to discuss these results at 4:30 p.m. ET/ 1:30 p.m. PT.
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