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How Unum’s Stop-Loss Chief Sees the Gameboard

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Unum put the group benefits market in a new light last week by announcing that it will start selling medical stop-loss insurance to employers with self-insured health plans sometime this summer.

(Related: Unum Enters Health Stop-Loss Market)

The Chattanooga, Tennessee, carrier is best known as a seller of just about every group benefit except for major medical insurance. Stop-loss insurance is closer to the employer’s core major medical plan.

Many large employers and some small employers self-insure to avoid state health insurance mandates. The sponsors often use stop-loss insurance, or insurance for insurance plans, to protect the self-insured plans against catastrophic losses.

Why does Unum want to get involved with employers’ health plans, given all of the turmoil in commercial health insurance?

Rich Williams, general manager of Unum Stop Loss, talked a little about the company’s thinking in a recent email interview. Here’s a look at some of what Williams said.

THINKADVISOR: Why is Unum getting involved with employers’ health plans?

RICH WILLIAMS: The most prominent benefits challenge employers face is the rising cost of health care…. By entering the stop-loss market, Unum can broaden the scope of the financial protection benefits we provide and increase the value we bring to employers. It also enables us to provide more solutions to  brokers and employers.

Understanding health care decisions an employer is making puts us in an excellent position to design not only the right stop-loss offer, but also to be consultative with our other products, to design plans that fit together to protect employees.

What kind of an opportunity do you see in the small-group stop-loss market?

The stop-loss industry as a whole is a $14 billion market and has grown about 15% in the past three years. It’s primarily comprised of mid- to large-sized companies, but smaller companies are taking more interest in self-insurance. It’s an attractive market, and entering stop-loss is an important component of Unum’s growth strategy.

[Entering the market] also allows us to be a part of the benefit plan discussion and design at an earlier stage in the process than we have been before, and to offer more value to our clients.

How would you handle the smallest employers?

We’ll evaluate the company’s risk tolerance, review and project claims trends to determine the best level of protection for that specific company. All stop-loss plans require a very customized approach and experienced brokers to manage the process.

Do you see a need for any extra standards or regulations for the smallest stop-loss users?

Self-insurance isn’t for every company. But for companies where self-insurance is a strategic fit, stop-loss coverage should be an integral part of a self-insurance plan.

— Read Kabat to become Unum chairman on ThinkAdvisor.


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