July 26, 1999
HEALTHEXTRAS INC (HLEX)
S-1 Filing (SEC form S1)
HealthExtras intends to be the leading Internet-based provider of supplemental health and disability benefit programs. We sell the HealthExtras benefit programs directly to consumers over the Internet at our website www.healthextras.com. At our website, our customers will be able to tailor their benefit packages to best suit their needs and circumstances. Our programs address a critical gap in our customers' insurance protection and have traditionally not been promoted by agents or brokers due to their low price point and high costs associated with that distribution channel. We believe we are the first company to develop supplemental health and disability programs designed specifically to be marketed over the Internet. We do not assume any underwriting risk for the benefits included in our programs. Since launching our programs in January 1999, we have enrolled over 45,000 program members.
OUR MARKET
According to Forrester Research, Internet-influenced sales of insurance will grow from $1.5 billion in 1998 to $11.0 billion in 2003. Our programs address a critical gap in our customers' insurance protection and have traditionally not been promoted due to their low price point and the high cost associated with their distribution. The information-based nature of our products, combined with the broad reach and cost advantage of the Internet channel, creates a significant opportunity for us. Booz, Allen & Hamilton, Inc. estimates this cost advantage to be as high as 71% over the traditional broker and agent channel.
BUSINESS STRATEGY
Our strategy is to:
. Become the leading online provider for supplemental health and disability benefit programs;
. Promote HealthExtras as the national brand for supplemental health and disability benefits;
. Develop strategic marketing relationships with selected Internet portals, insurance-related websites and other websites with attractive demographic profiles; and
. Continue to develop innovative health and disability programs responsive to consumer needs.
STRATEGIC RELATIONSHIPS
In order to implement our strategy, we have established certain strategic relationships, which include:
. Christopher Reeve. We have entered into an exclusive agreement with Christopher Reeve for him to assist HealthExtras in developing products and making consumers aware of various catastrophic events that could threaten their families' security. Mr. Reeve appears in television, radio and print ads to promote HealthExtras programs and our website.
Christopher Reeve joined the HealthExtras team after he encountered one of the problems that our programs are designed to address. Specifically, when Mr. Reeve experienced his tragic accident, he believed he had comprehensive group health insurance coverage. Unfortunately, as with the majority of group health plans, there was a lifetime "cap" in his policy -- which he exceeded in twenty months -- leaving him with major ongoing medical bills and no insurance coverage.
. Major Financial Institutions. We have established strategic marketing relationships with six of the nation's largest VISA and Mastercard issuing banks for access to their credit card and other customers. These banks are assisting us in establishing brand name recognition with their installed base of customers, which we estimate represents more than 50 million households.
. Insurance Underwriter. We have entered into an arrangement with Reliance National Insurance Company to provide the catastrophic disability, excess medical and organ transplant coverage included in our programs; another insurance company provides the out of area coverage. HealthExtras does not assume any underwriting risk.
. National Provider Network. Our arrangement with United Payors & United Providers, Inc. enables us to offer our program members access to the price concessions for medical services available through the United Payors & United Providers network of health care providers. This network consists of over 2,500 hospitals and 150,000 physicians throughout the United States. |
