The 5-year-old disruptor finds a friend in 200-year-old French insurance giant.
Oscar Health, the tech-driven health insurance startup, is linking with international conglomerate AXA. The pair are calling the arrangement, announced today, “a multi-year quota-share reinsurance transaction” between the insurer and AXA’s International Employee Benefits arm.
The announcement comes as Oscar churns towards profitability and expands its operation. The company says a relationship with AXA and its “blue chip balance sheet” will accelerate expansion efforts and enable long-term growth. AXA, which can trace its corporate roots back more than 200 years, gives the 5-year old Oscar a robust and repubtable partner with extensive knowledge on preventative health and health insurance delivery.
“We will benefit from this strategic partnership with AXA and its global scope, deep reinsurance expertise, and a shared vision for the future of health care,” Oscar Chief Strategy and Policy Officer Joel Klein said in a statement. “We look forward to collaborating with AXA as we work to expand and bring the simple, easy, and innovative Oscar Health experience to more consumers.”
Despite posting sizable revenues—which the company expects to near $1 billion this year—fears of a potential Affordable Care Act (ACA) repeal hurt Oscar financially in the first half of 2017. The healthcare debate has since quieted down, and Oscar says it is looking to enroll 250,000 new customers this year. It was on pace, the company said, as of the ACA open enrollment period.
That ambitious number will be more attainable due to the company’s expansion. In the statement, Klein referred to how his company is entering its “next phase of growth.” For 2018, it has doubled its market presence.
The insurer will now offer plans in 5 Ohio counties through a project with the Cleveland Clinic. It will also expand its footprint in both Texas and California. New Jersey residents will have the option of Oscar enrollment again for the first time since it withdrew from the state in late 2016, and those in Tennessee can now do business with the so-called “Uber of health insurance” for the first time ever. Service in Oscar’s home state of New York will continue unchanged.
The chosen markets reflect the company’s image of a leaner, more technology-driven health insurance choice, primarily aimed at millennials. Each new metro area boasts a growing population dominated by young people: In Texas it will now be available in noted-tech-mecca Austin. Its Tennessee program will center around Nashville, a city with blossoming healthcare and technology industries that has been adding new residents at a steady clip for the better part of the last decade. Even Cleveland is seeing positive growth in its college-educated millennial population.
For AXA, the partnership represents an opportunity to join forces with a potentially disruptive organization. “We share the same vision for the role of insurers and the future of health with Oscar, so this is a natural partnership for us. We look forward to working together to make health care more customer-centric,” Mattieu Rouot, the Senior Vice President of International Employee Benefits at the 2-century-old French firm, said in a statement.