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Pay Rises More for Health Insurers' Top Financial Executives: BDO

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The recent health insurance industry business climate may have been better for the executives who oversee health insurers’ finances than for the executives who oversee health insurers’ legal affairs.

BDO USA LLP has raised that possibility in a summary of the results from the company’s latest health insurer executive comp survey.


BDO USA is part of BDO International, a large, Chicago-based accounting firm.

The latest BDO USA health insurance comp survey report, which is based on a questionnaire that was out in the field from March 1, 2020, through April 15, 2020, covers what happened to executive comp at about three dozen large U.S. insurers between 2019 and early 2020.

The full survey report includes information about compensation for a wide range of positions, including actuaries, auditors and sales and marketing managers.

The full report also includes details about what’s happened to different types of compensation, such as base salaries, long-term incentive pay and deferred compensation arrangements.

The summary available to the public does not show what executives were actually paid.

The summary does show how average compensation changed between 2019 and 2020.

For top financial executives, base pay increased 7.2%, and total direct compensation increased 13.5%.

For top legal executives, base pay increased just 5%, and total direct comp rose 8.5%.

The legal executives did a little better than chief executive officers in terms of base pay, but worse in terms of total direct comp: The CEOs’ base pay rose only 4.7%, but their total direct comp rose 12.4%.

Other BDO USA survey findings:

  • Top executives at higher-revenue health insurers collected a higher percentage of their pay in terms of incentive pay, rather than salaries.
  • The two most popular metrics for annual incentive pay were enrollee increases and customer satisfaction.
  • The most popular incentive metric was risk-based capital, which is a measure of how well an insurer is prepared to meet obligations to insurance policyholders and annuity contract holders.

Judy Canavan, a managing director at BDO USA LLP, said in a comment about the results that companies should think hard when choosing incentive metrics.

“Doing so can help them ensure true value creation,” Canavan said.

— Read 13 Highest Paid CEOs in Financial Services: 2020, on ThinkAdvisor.

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