Maintaining a Thoughtful Approach to the Business of Risk & Relationships
HM is a Stop Loss carrier, which means we’re in the risk-taking business. We don’t shy away from it. We don’t avoid it. We bring a thoughtful approach to our underwriting process. But what does this mean for our clients?
Though I’m new to HM, I’ve been in the business of underwriting health coverage (insurance and reinsurance) for 25 years. Over that time, a lot has changed. From a big picture viewpoint, mortality has improved (people are living longer), some of which has been driven by advances in medical technology and pharmaceuticals. These developments, combined with the removal of policy limits when the ACA was passed, resulted in a significant increase in high-dollar medical claims.
Self-funded employers are challenged by these rising medical claim costs. Overall, employers are spending a larger percentage of their revenues on employee health benefits, and the rise of high-dollar claims creates significant volatility and uncertainty in their budgeting and planning process.
As underwriters, we step into this complex world and use our expertise and top credit ratings to lift employers out of the uncertainty, providing a financial product that protects them and is custom-fit to their particular needs. Our underwriting decisions show clients that they have a partner in the assumption of risk related to their health plan. In essence, through our relationships, we help to eliminate much of their volatility risk, so they can budget their employee benefits with more certainty and focus on running their businesses.
At HM, we have an experienced underwriting team of experts who review the cases submitted and find ways to appropriately assume risk on behalf of employers. There is not one solution that works for all groups. Our approach is to be consistent and creative in the risk evaluation process. We review each group on an individual basis and tailor a solution that works for all parties. The current market is challenging, and there’s not a one-size-fits-all approach. Our policyholders need to know that we see the risks of their insured population and have crafted their coverage to deliver financial protection should catastrophic claims arise.
Underwriters are asked to “make the call” on assuming risk. Our decisions are not always agreed with, but that’s the nature of our business. This is a complex and challenging environment. Our thoughtful approach to underwriting means that we cautiously balance providing clients the financial protection they need with the appropriate use of our capital to deliver that coverage. This is a fine balance to maintain.
Our goal is create a long-term solution for our clients, paying their claims as they come up, but also earning an adequate return on our capital. Taking a thoughtful approach to risk assumption means creating solutions that work for both parties and lead to long-term relationships, something I’m excited to see with current and prospective clients alike.