Alignment Healthcare (ALHC) investor relations material

Business model and growth strategy

• Growth driven by data-driven medical management, focusing on high-risk, polychronic populations using interdisciplinary care teams and proprietary technology.

• Expansion outside California has been strong, with 100% growth last year and 80% projected this year, leveraging direct practitioner engagement rather than IPAs.

• Product mix is broadening, with opportunistic growth in C-SNPs and some PPO expansion, though PPO is not a primary growth driver.

• Portfolio approach balances growth and margin improvement, with cautious expansion to avoid overextension.

• New market selection is guided by demographic filters, provider composition, and readiness to deploy a scalable franchise model.

Financial performance and outlook

• Medical Loss Ratio (MLR) improvements expected as member cohorts mature, with newer members currently representing a high proportion of the base.

• Consolidated MLR includes about 5% supplemental benefits; mature members show stronger MLR performance.

• Q1 results met expectations, and Q2 guidance is reaffirmed with strong confidence in operational execution and visibility.

• Utilization trends are benign and stable, with inpatient admissions and other medical costs tracking in line with expectations.

• Statutory filings and monthly data can be noisy; quarterly results provide a more accurate picture, with timing of CMS sweeps impacting Q2 reporting.

Operational initiatives and delegation

• De-delegation of certain utilization management functions from IPAs in California has improved plan performance and alignment with provider groups.

• Technology investments, especially in AVA, support operational efficiency and margin expansion.

• Delegation dynamics differ between California and other states, with California featuring more delegated administrative functions.

• Ongoing operational improvements and franchise readiness are key to supporting reliable new market entries.

• No material issues from prior period costs; operational blips have been resolved and costs are stable.