Carriers have a lot to consider when pricing their stop loss coverage. It all depends on the level of risk they’re taking on. The clearer the picture is, the easier it is to price coverage appropriately and competitively. Here are four factors your carriers are considering.
What carriers consider when pricing stop loss
1. The broker
Brokers are the product experts. They understand the nuances of various stop loss policies and have an overall breadth of industry knowledge. Seasoned professionals earn their clients’ confidence and respect while maintaining strong relationships with the carriers they represent.
2. Managed care networks
Using a managed care network can significantly impact specific stop loss rates. Through hospital partnerships and quality care standards, managed care networks typically offer better health care and more successful outcomes. Carriers tend to offer preferred pricing when groups utilize networks that they believe to have the best providers and deepest discounts.
3. Comprehensive claims data
A group’s overall claims history can play a role in pricing. Maintaining current claims data as well as data from the previous two years can help carriers understand the risk they’ll be taking on. Brokers can also use this information to help smaller companies determine if self-funding is a viable option.
4. Carrier consistency
Staying with a carrier long-term can affect pricing as well. Carriers often reward companies that renew year after year because they have a better idea of the type of risk they’re insuring—which allows them to provide competitive pricing.
For more information, including tips for choosing a stop loss carrier, read our Inside Track educational paper >