How Do Big Insurers Set Rates?

Learn how to Take Control of your Small business costs:  Refuse to accept your benefits the “old” way!

Cash Flow Claims VS Risk Claims: "What's the difference?"

Predictable

  • Dental Care

  • Prescription Drugs

  • Health Practitioners

  • Vision Care

  • Weekly Indemnity

Rates driven by utilization

Unpredictable

  • Group Life

  • AD&D

  • Long Term Disability

  • Out of Country Medical

  • Catastrophic “Stop – Loss”

Rates driven by demographics.

"The Vicious Circle"

Chasing the lowest rates only creates a price gap that will be corrected.

Traditional Insurer EHC/Dental Target Loss Ratio (TLR) Example

  • Traditional renewal with a 70% TLR plus 10% IBNR for 1st Year creates a net 60% TLR (not unusual for small business

  • Lets assume a Gross Annual Premium of $10,000 with  Cash Claims in 1st Year of $7,500 or 75% of Gross

  • The Renewal offering  would be $7,500/$6,000 x Trend of say an average of 8% on EHC and Dental

  • 35% increase required due to Target Loss Ratio of 60% plus any discretionary discount used by the insurer that they will want to get back.

Our EHC/Dental Target Loss Ratio (TLR) Example

  • Same Gross Annual Premium of $10,000 and same Cash Claims in 1st Year of $7,500 or 75% of Gross

  • Our Renewal would be $7,500/$8,000 x Trend of say an average of 8% on EHC and Dental

  • No increase required due to our competitive Target Loss Ratio of 80% caused by our pooling effect

Our EHC/Dental Target Loss Ratio (TLR) Example

  • Our list of eligible occupations  is greatly expanded

  • Blue collar groups don’t bother us

  • We can write Associations and Multi-Employer Groups including start-up’s

  • We can quote stand alone main pooled benefits (LTD, WI, Life, CI)

  • We can write  LTD to age 70

  • Group benefits from 1 employee available at www.choicesforme.ca

  • We use Third Party Administration services to do billings so no insurer controls this aspect but you do!

  • Free Payroll and HR services are available to our clients

Allow us to become one of your partners and we’ll be happy to provide you with a terrific alternative