The employer stop-loss market seems to be stabilizing and the reinsurance market may well reflect that in 2006, according to Alden Skar, a vice president and senior actuary with ING Re, Minneapolis.
Skar says carrier clients are not changing reinsurers with as much frequency, which suggests that reinsurers in this market are more likely to keep current business but may be less likely to get new business.
He says Jan. 1 renewals from managing general underwriters still are being evaluated, so that more information on the trend that reinsurers such as ING Re are seeing probably will be available in a few weeks.
In 2006 and beyond, the impact of mergers and acquisitions on employer stop-loss reinsurance could reduce the need for reinsurance if new, larger companies retain more risk.
Skar explains that for excess stop-loss business, ING Re sets its own rates rather than using quota share arrangements where rates are negotiated.
Skar says there is a big demand for stop-loss business because many smaller plans either do not have the expertise to handle large incidents or are focused on smaller claims.
While unusual claims such as injuries from automobile accidents cannot be controlled, there are health care measures that can be taken to reduce the chance of other expensive treatments, he continues.