Online insurance marketplace EverQuote, Inc. recently announced that it is exiting its health insurance vertical, effective June 30, 2023. The health insurance vertical includes EverQuote’s marketplace and direct-to-consumer agency (DTCA) serving the Medicare and “Under 65” health insurance market, and represented approximately 10% of the company’s revenue in fiscal year 2022.
“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,” said Jayme Mendal, CEO of Cambridge, Mass.-based EverQuote. “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.”
EverQuote’s decision with regard to its health insurance vertical is part of the company’s plans announced last month to streamline its business and reduce annual non-marketing operating expenses by over 15%. In connection with this structural reduction, EverQuote began implementing a workforce reduction plan that will result in the company incurring aggregate severance charges of approximately $2 million to $3 million, which will be recognized primarily in the second quarter of 2023. In addition, EverQuote is reviewing the potential impact of its decision to exit its health insurance vertical on its balance sheet and will provide an update on its second quarter earnings call, scheduled for Monday, Aug. 7.
“Our team remains laser-focused on closely managing costs and driving operating efficiencies in the business,” said Joseph Sanborn, CFO of EverQuote. “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.”