SG Benefit Providers
Private
Company Overview
SG Benefit Providers,, ideally positioned for rapid growth in the $300+ billion federally subsidized Medicare Advantage market, helps Americans access Medicare Advantage coverage through partnerships with A-plus-rated carriers, including Blue Cross Blue Shield, Humana, UnitedHealthcare, Aetna, WellCare, and Cigna. Medicare Advantage provides comprehensive coverage, offering essential healthcare benefits (dental, vision, and hearing) beyond what traditional Medicare provides, all at no cost to participants. The Company's highly scalable business model, designed to create significant competitive advantages, generates commissions on each Medicare Advantage deal closed with residual income earned when the policies are renewed in subsequent years.
Value Proposition
SG Benefit Providers operates a highly scalable business model that generated approx. $2.3 million in revenue with a 19% operating margin in 2022. The Company generates income from commissions on each Medicare Advantage deal it closes, as well as residual income from policy renewals, creating a sustainable recurring revenue generation model. The Company's ability to negotiate better rates with carriers and its superior data sourcing strategy enables it to maintain a low average client acquisition cost of $125. SG Benefit Providers’ competitors often pay nearly double this amount, crippling their margins and forcing them to take deals structured around upfront commissions (without residual commissions for renewals). SG Benefit Providers, is poised for significant expansion through hiring more agents, acquiring field marketing organizations, and forming strategic partnerships with call center-based marketing agencies, and the Company's potential expansion into under 65 insurance products could further accelerate its growth. With an estimated 15 million Americans turning 65 over the next three years, and the potential lowering of the Medicare eligibility age, the demand for Medicare Advantage plans is expected to continue to grow. As of 2023, 51% of eligible Medicare beneficiaries are enrolled in these plans, up from 29% a decade ago, presenting a substantial market opportunity for SG Benefit Providers. The Company's leadership team, with a proven track record of success in the Medicare insurance market, is a key strength, and their previous experience of growing an agency from 8 to 60 agents in just three years, resulting in a $40 million exit, attests to their capabilities. With its robust and scalable business model, low customer acquisition costs, and experienced leadership team, SG Benefit Providers, presents a compelling opportunity in an attractive and rapidly growing market.
Investment Highlights
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Highly scalable business model with attractive economics
- Generates income from commissions on each Medicare Advantage deal closed and residual income ($32 per month per policy) from renewals
- Recurring renewal income from 8,000 currently active policies could exceed $3 million
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Significant $300+ billion market opportunity
- Estimated 15 million Americans turning 65 over the next three years; potential for lowering of Medicare eligibility age could further expand market opportunity
- 51% of eligible Medicare beneficiaries enrolled in Medicare Advantage plans, up from 29% in 2013
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Executing comprehensive growth strategy
- Plans for significant expansion through hiring more agents, acquiring field marketing organizations, forming partnerships with call centers, and addition of under-65 products
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Proven leadership team with track record of success in Medicare industry
- Previous experience growing an agency from 8 to 60 agents in three years, resulting in a $40 million exit