2020 was a record-setting year for IPOs, and among the new stocks were several high-flying tech-enhanced insurance companies. Lemonade is perhaps the best-known, and it was one of last year's hottest new stocks. But a number of other insurance outfits making their public debuts are also worth exploring. Three to put on your watchlist are Clover Health Investments (NASDAQ: CLOV) , GoHealth (NASDAQ: GOCO) , and Root (NASDAQ: ROOT) .
Clover bills itself as a "next-gen Medicare Advantage" company -- a private health insurance option for those on Medicare. Clover just became a public concern through its recent merger with a SPAC ( special purpose acquisition company ) created by former Facebook executive turned venture capitalist Chamath Palihapitiya. The insurer is still small, debuting with an enterprise value of $3.7 billion, so there's massive opportunity -- Medicare Advantage spending was $270 billion in 2019, and it's expected to expand to $590 billion by 2025.
This is a different type of Medicare insurer, though. Rather than find and engage with its members via third-party agent, Clover works directly with both its insured parties and their chosen primary care physicians. It does so through its own software, including video conferencing tools and a data-collection platform, to drive better patient outcomes and cost reductions. This platform is delivered through the "Clover Assistant," a portal where member physicians can work with patients and the Clover team. As a result, the company boasts better care at a lower cost than the typical Medicare Advantage plan, and it thinks the Clover Assistant can be applied in other healthcare applications down the road.
For further details see:
Like Lemonade? Here Are 3 Small Insurance Tech Stocks to Add to Your Watchlist