HM Insurance Group Purchases Interest in AST Risk for Growth in the Level Funded Market

HM Insurance Group (HM) has made a strategic investment in AST Risk, a leading Managing General Underwriter (MGU) for small group level funding programs managed through third party administrators (TPAs). The transaction enables the expansion of HM’s national share of the small group market that is seeking self-funded solutions backed by stop loss insurance.

HM’s investment represents a one-third interest in AST Risk, which also is owned by Allied National, one of the nation’s oldest and most experienced TPAs, and Actuarial Strategies & Tactics (AST), an actuarial and insurance consulting firm that focuses on small group and specialty medical products.

“The level funding market is rapidly growing as small group employers look to transition to a self-funded option for their employee benefits programs,” Tom Doran, president and CEO, HM Insurance Group, said. “As a leading national stop loss carrier, expanding our business into this market has been a key strategic initiative, and this helps to provide an opportunity to more effectively grow our capabilities in offering small group solutions nationally.”

The relationship brings together HM’s long-standing experience in the stop loss industry with AST Risk’s industry leading, TPA-based, small group level funding programs and is expected to accelerate growth in the small group space for both organizations.

“We’re excited to have HM as our new partner,” Bill Ashley, CEO of Allied National, said. “AST Risk has grown significantly since being founded two years ago, and we expect that working alongside HM will help to increase that growth even further.” Bernie Erickson, president of AST, added, “We look forward to working with the team at HM, and as we combine our unique small group level funded product expertise with HM’s proven approach to managing medical stop loss business, we are well positioned to make a significant, positive impact on the market.”

Noting that the ability to compete in the level funding market requires specialized underwriting and actuarial expertise, along with well engrained sales channels, strong broker relationships and connections with TPAs who specialize in level funding, Doran added, “Bringing together the knowledge and capabilities of AST Risk and HM Insurance Group establishes a mutually beneficial relationship that provides a small group offering in which brokers and clients can have confidence.”