Good News on Listing | Frost & Sullivan Assists Health In Tech, Inc. to Go Public in the US (NASDAQ:HIT)

Health In Tech, Inc. (hereinafter referred to as 'HIT') issued 2,300,000 shares at an ultimately determined IPO price of $4 per share, raising a total of $9.2 million for the company.

During this listing process, Frost & Sullivan mainly undertook the following tasks: helping the issuer accurately and objectively understand its positioning in the target market, using objective market data to discover, support, and highlight the issuer's competitive advantages, assisting the issuer, investment banks, and other intermediaries in completing the writing of relevant parts of the prospectus (such as the overview, competitive advantages and strategy, industry overview, business, and other important sections), helping the issuer communicate with the SEC and investors, assisting investors in quickly understanding the market ecosystem and competitive landscape, and providing assistance to the issuer in responding to various regulatory authorities' feedback on industry issues.

• The company is an industry-leading insurance technology platform;

   

• The company made disruptive innovations and reimagined its own-funded health plan;

   

• The company has a strong technology-driven solution;

   

• The company has a management team that shares a common mission and possesses profound foresight.

Small businesses in the United States are an important source of economic vitality. According to the definition by the U.S. Small Business Administration (SBA), these are independent enterprises with fewer than 500 employees. In recent years, the number of small businesses in the United States has been steadily growing, increasing from 30.2 million in 2018 to 33.2 million in 2022, accounting for 99.9% of the total number of businesses in the country. This growth trend is expected to continue, with the number of small businesses in the United States projected to reach 37.6 million by 2027. Small businesses not only dominate in number but also play a key role in promoting employment, innovation, and economic growth. According to Frost & Sullivan's analysis, the annual compound growth rate (CAGR) of small businesses was 2.4% from 2018 to 2022, and is expected to maintain a growth rate of 2.5% from 2022 to 2027. This stable growth trend reflects the resilience and importance of small businesses in the U.S. economy. With policy support and continuous optimization of the market environment, small businesses in the United States will continue to be an important force driving national economic development.

Source: Frost & Sullivan report

The number of employees in small businesses in the United States has shown a steady growth trend, which is closely related to the increase in the number of small businesses in the country. According to data from the Small Business Administration (SBA) and Frost & Sullivan, the total number of employees in small businesses in the United States was 58.9 million in 2018 and increased to 61.7 million by 2022, with a compound annual growth rate (CAGR) of 1.2% from 2018 to 2022. At the same time, the proportion of small business employees in the total workforce in the United States also increased from 45.7% in 2018 to 46.4% in 2022. It is projected that by 2027, the number of employees in small businesses in the United States will reach 65 million, with a CAGR of 1.1% from 2022 to 2027. By then, the proportion of small business employees in the total workforce is expected to reach 48.3%. This growth trend indicates that small businesses are playing an increasingly important role in the US employment market, and they will continue to be a key force in creating employment opportunities and driving economic growth.

Source: Frost & Sullivan report

Small businesses in the United States contribute significantly to GDP and show a continuous growth trend. According to data from the U.S. Small Business Administration (SBA), the Bureau of Economic Analysis (BEA), and Frost & Sullivan, small businesses contributed $8.9 trillion to U.S. GDP in 2018, and this number increased to $11.5 trillion by 2022. During this period, the annual compound growth rate (CAGR) of small businesses' contribution to GDP was 6.6%. The proportion of small businesses in the national GDP also increased from 43.2% in 2018 to 45.0% in 2022. It is expected that by 2027, small businesses' contribution to GDP will reach $16.6 trillion, and their proportion of total national GDP is expected to rise to 47.6%. This growth trend highlights the core role of small businesses in the U.S. economy; they are not only drivers of economic growth but also major sources of innovation and employment opportunities. As small businesses continue to expand their economic influence, their importance in the U.S. economy will further enhance.

Source: Frost & Sullivan report

The small business health insurance market in the United States mainly includes traditional health insurers, large insurance brokerage firms, third-party administrators (TPAs), and some startups that are using technological innovation to simplify self-insured benefit plans.

Traditional insurance companies and large enterprise solution providersThese companies typically target large enterprises or offer general commercial health insurance plans that cover a wide range of customer groups, but their products and services are often not tailored to the specific needs of small businesses. For small businesses, traditional insurance companies often face higher premiums and lower flexibility, especially in terms of customized services for self-insured benefits plans and loss stop insurance.

Third-Party Administrator (TPA)TPAs typically assist small businesses in managing self-insurance benefits and catastrophe coverage. However, many TPA services are complex and rely on traditional manual reviews and processes, which can lead to longer underwriting times and higher management costs, making it difficult to meet the needs of small businesses.

Technology-driven innovation companySome technology-driven competitors are leveraging artificial intelligence, machine learning, and automation platforms to simplify the underwriting process and quote generation for health insurance. These companies typically emphasize fast response times, cost reduction, and reduced manual intervention. Compared with HIT's eDIYBS platform, although some competitors offer similar automation technologies, their services are usually limited to certain insurance products and are more limited in terms of underwriting coverage and customized services.

HIT has stood out in the highly competitive market through innovations in the following aspects:

• AI-driven automation technologyThe HIT's eDIYBS platform uses artificial intelligence and machine learning to significantly simplify the insurance quote and underwriting process. Compared to traditional manual review processes, the HIT system can generate bindable quotes within just two minutes, greatly improving efficiency and reducing errors. This technological advantage creates a high competitive barrier in the market.

   

• A wide range of insurance productsThe HIT platform can underwrite a variety of stop-loss insurance policies, while many competitors can only offer coverage for their own insurance products. This enables HIT to provide more flexible self-insurance benefit plans for different small enterprises, enhancing its market attractiveness.

   

• Simplified Self-Pension SchemeTraditional self-insured benefit plans are typically only applicable to large enterprises and are complex to operate. HIT aims to simplify this process, specifically designed for small enterprises, especially those with 5 to 150 employees, filling a market gap.

   

• Efficient underwriting and quoting systemHIT's AI-supported system can quickly and accurately generate up to 12 plans and four tiered rates, significantly reducing the time from application to underwriting. Compared to competitors, HIT's system can complete quotes within minutes, whereas traditional competitors often take days or even weeks.

   

• Extensive medical networkProvided by HITHI Performance Network (HPN)It covers 10,235 hospitals and 1,593,202 providers across 50 states in the United States, with reimbursement pricing for medical insurance based on Medicare. This vast healthcare network gives HIT an advantage in providing comprehensive medical services, especially in terms of price control and quality of medical care.

The rapid growth in healthcare spending by small businesses in the United States reflects the continuous rise in healthcare costs. According to national health expenditure data released by the Centers for Medicare and Medicaid Services (CMS) and analysis by Frost & Sullivan, healthcare spending in the United States increased from $3.6 trillion to $4.5 trillion from 2018 to 2022, with a compound annual growth rate (CAGR) of 5.7%. In 2020, healthcare spending accounted for a record high of 19.7% of the United States' nominal gross domestic product (GDP), and then slightly declined to 18.3% in 2021. This indicates that despite fluctuations in the growth rate of healthcare spending, its importance in the economy remains significant.

Data source: Analysis by Frost & Sullivan

The annual medical insurance premiums for small businesses in the United States show a steady growth trend. According to Frost & Sullivan the data, premiums increased from $156.7 billion in 2019 to $186.3 billion in 2023, with a five-year compound annual growth rate (CAGR) of 4.4%. It is expected that by 2028, the annual medical insurance premiums for small businesses will reach $242 billion, representing a five-year CAGR of 5.4% from 2023 to 2028. As medical insurance costs rise, small businesses may seek more effective medical insurance solutions to control costs and provide competitive benefits for their employees. Self-funded health plans may become an option for small businesses because they offer more control and flexibility. In addition, with technological advancements, small businesses may use these innovations to optimize their medical insurance strategies and maintain competitiveness in the ever-changing medical insurance market.

Data source: Analysis by Frost & Sullivan