Best’s Market Segment Report: More Self-Insured Plans Drive Stop-Loss Segment Growth


OLDWICK, N.J.–(BUSINESS WIRE)–#insurance–With more U.S. employers shifting to self-funded health plans to contain employee benefit costs, the stop-loss insurance segment has experienced growth exceeding 10% in each of the past four years, reaching $25.2 billion in 2020, according to an AM Best report.

Caribbean News Global AM_Best_Logo Best’s Market Segment Report: More Self-Insured Plans Drive Stop-Loss Segment Growth

The Best’s Market Segment Report notes that self-funded insurance has become more attractive since the implementation of the Affordable Care Act, which has resulted in a major shift in the commercial health employer group insurance market – the largest market for health insurers. Other key takeaways in the report, titled, “More Self-Insured Plans Drive Stop-Loss Segment Growth,” include the following:

  • The medical loss ratio (MLR) decrease of 100 basis points to 81.7% in 2020 was less steep than the decrease in the fully insured market.
  • More small groups have been purchasing stop-loss insurance through level-funded products.
  • The top 10 stop-loss writers generate nearly three quarters of premium.
  • The amount of claims covered by stop-loss carriers also has been rising with the rising number of costly medical treatments.

“Stop-loss writers have more rate flexibility than the direct commercial segment; however, stop-loss claims have risen over the past 10 years,” said Doniella Pliss, director, AM Best. “In some cases, rate increases have reached the low double digits to match the claims trend, but overall, stop-loss rates have generally risen more quickly compared with group commercial health products.”

Technological advances play a significant role in the stop-loss insurance segment, as employer groups are looking for more administrative customization and flexibility, while providers prefer greater connectivity and faster claims settlement. In addition, employer groups want stop-loss carriers to actively manage high-cost claims and be able to optimize and direct the medical treatments.

“Large stop-loss insurers with more robust technological investments have an advantage, but as the group size of stop-loss customers has decreased over the past decade, some smaller stop-loss carriers have successfully retained customers based on more personalized service,” said Wayne Kaminski, senior financial analyst, AM Best.

Interest in self-funding continues to rise, even throughout the pandemic. AM Best believes that stop-loss carriers’ strength in managing high-dollar medical claims efficiently and offering more customized financial solutions to employer groups will drive the competition in the stop-loss market in the near to medium term.

To access the full copy of this market segment report, please visit

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit

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Wayne Kaminski
Senior Financial Analyst
+1 908 439 2200, ext. 5061

Christopher Sharkey

Manager, Public Relations
+1 908 439 2200, ext. 5159

Doniella Pliss
+1 908 439 2200, ext. 5104

Jim Peavy
Director, Communications
+1 908 439 2200, ext. 5644