SelectQuote (SLQT) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01Our business may be harmed if we lose our relationships with our insurance carrier partners or fail to develop new insurance carrier relationships
2. 02We currently depend on a small group of insurance carrier partners for a substantial portion of our business. If we become even more dependent on a limited number of insurance carrier partners, our business and financial condition may be adversely affected
3. 03Changes in the health insurance market or in the variety, quality and affordability of the insurance products offered by our insurance carrier partners could harm our business, operating results, financial condition and prospects
4. 04Insurance carriers can offer products and services directly to consumers or through our competitors
5. 05Pressure from existing and new competitors may adversely affect our business and operating results, financial condition and prospects
6. 06Our business is substantially dependent on revenue from our Senior health insurance carrier partners and is subject to risks related to Senior health insurance and the larger health insurance industry. Our business may also be adversely affected by downturns in the life insurance industry
7. 07Systemic changes in our insurance carrier partners’ sales strategies could adversely affect our business
8. 08Our continued improvement of our product and service offerings is critical to our success. Accordingly, we must continually invest resources in product, technology and development in order to improve the comprehensiveness and effectiveness of our distribution platform
9. 09Risks from third-party products could adversely affect our businesses
10. 10If our ability to enroll individuals during AEP and OEP is impeded, our business will be harmed
11. 11If we are unable to attract, integrate and retain qualified personnel, our ability to develop and successfully grow our business could be harmed
12. 12Our business is dependent on our obtaining a large quantity of quality insurance sales leads in a cost-effective manner
13. 13Our business depends on our ability to convert sales leads to actual sales of insurance policies. If our conversion rate does not meet expectations, our business may be adversely affected
14. 14Our ability to match consumers to insurance products that suit their needs is dependent upon their provision of accurate information during the insurance shopping process
15. 15We depend upon internet search engines to attract a significant portion of the consumers who visit our website, and if we are unable to effectively advertise on search engines on a cost-effective basis our business, operating results, financial condition and prospects could be harmed
16. 16Our business could be harmed if we are unable to contact consumers or market the availability of our products by telephone
17. 17Global economic conditions that affect the financial stability of our insurance carrier partners, vendors, and consumers could, in turn, materially and adversely affect our revenue and results of operations
18. 18If we are unable to attract new pharmacy customers and retain and grow our relationships with existing pharmacy customers, our business, results of operations, financial condition, and future prospects may be materially and adversely affected
19. 19We face risks relating to the availability, pricing and safety profiles of prescription medications that we purchase and sell
20. 20Changes in third-party reimbursement levels for prescription drugs and changes in industry pricing benchmarks could reduce our pharmacy margins and have a material adverse effect on our business
21. 21We may be subject to significant liability should the consumption of any of the products offered through our pharmacy business cause injury, illness, or death
22. 22We may acquire other companies or technologies, which could divert our management’s attention, result in additional dilution to our stockholders and otherwise disrupt our operations and harm our operating results, financial condition and prospects
23. 23Impairment of the carrying value of our goodwill or other intangible assets could adversely affect our financial condition and results of operations
24. 24Our existing and any future indebtedness could adversely affect our ability to operate our business
25. 25Operating and growing our business may require additional capital, and if capital is not available to us, our business, operating results, financial condition and prospects may suffer
26. 26If we fail to protect our brand, our ability to expand the use of our agency services by consumers may be adversely affected
27. 27Seasonality may cause fluctuations in our financial results
28. 28We rely on our insurance carrier partners to prepare accurate commission reports and send them to us in a timely manner
29. 29Our operating results fluctuate depending upon insurance carrier payment and policy approval practices and the timing of our receipt of commission reports from our insurance carrier partners
30. 30Our operating results will be impacted by factors that impact our estimate of the lifetime value of commissions per policyholder

Risks Related to Our Intellectual Property and Our Technology

1. 31If we are unable to adequately protect our intellectual property, our ability to compete could be harmed
2. 32Litigation regarding any intellectual property disputes may be costly and disruptive to us. Any of these results would harm our business, operating results, financial condition and prospects
3. 33We may become subject to intellectual property disputes, which are costly and may subject us to significant liability and increased costs of doing business
4. 34Our business depends on our ability to maintain and improve the technological infrastructure that supports our distribution platform, and any significant disruption in service on our platform could result in a loss of consumers, which could harm our business, brand, operating results, financial condition and prospects
5. 35Potential changes in applicable technology and consumer outreach techniques could have a material and adverse effect on our operating results, financial condition and prospects
6. 36We rely on third-party service providers that provide the infrastructure for our technological systems, and any failure to maintain these relationships could harm our business
7. 37Our business could be materially and adversely affected by a cybersecurity breach or other attack involving our computer systems or those of our insurance carrier partners or third-party service providers
8. 38We collect, process, store, share, disclose and use consumer information and other data, and an actual or perceived failure to protect such information and data or respect users’ privacy could damage our reputation and brand and harm our business, operating results, financial condition and prospects
9. 39Issues related to the development and use of artificial intelligence (AI) could give rise to legal and/or regulatory action, damage our reputation or otherwise materially harm of our business

Risks Related to Laws and Regulation

1. 40Laws and regulations regulating insurance activities are complex and could have a material and adverse effect on our business, reduce our profitability, and potentially limit our growth
2. 41Our Senior segment is subject to a complex legal and regulatory framework, and non-compliance with or changes in laws and regulations governing the marketing and sale of Medicare plans and other health-related products and services could harm our business, operating results, financial condition and prospects
3. 42among other things. To the extent they are determined to apply to our operations, these and any other changes to the laws, regulations and guidelines relating to Medicare plans, their interpretation, or the manner in which they are enforced could harm our business, operating results, financial condition and prospects
4. 43Our business may be harmed by competition from government-run health insurance exchanges
5. 44Changes and developments in the regulation of the healthcare industry could adversely affect our business
6. 45Changes and developments in the health insurance system and laws and regulations governing the health insurance markets in the United States could materially and adversely affect our business, operating results, financial condition and prospects
7. 46Our business may be harmed if our website and marketing materials are not timely approved or do not comply with legal requirements
8. 47Our healthcare services operations, including our pharmacy business, face regulatory and operational risks and uncertainties that differ from the risks of our other businesses
9. 48We may not be able to maintain compliance with all current and potentially applicable U.S. federal and state or foreign laws and regulations, and actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate could have a material adverse effect on our business
10. 49From time to time we are subject to various legal proceedings that could adversely affect our business
11. 50Our communications with potential and existing customers are subject to laws regulating telephone and email marketing practices
12. 51Any legal liability for the information we communicate to consumers could harm our business and operating results
13. 52Our quarterly and annual operating results or other operating metrics may fluctuate significantly and may not meet expectations of research analysts, which could cause the trading price of our common stock to decline
14. 53We are required to make significant estimates and assumptions in the preparation of our financial statements. These estimates and assumptions may not be accurate and are subject to change
15. 54We do not intend to pay dividends in the foreseeable future