Employers’ medical stop-loss insurance premiums could start to stabilize after 2027.
Brian Evanko, the president of Cigna, talked about the possibility recently in Las Vegas, at a health care conference organized by Bank of America Securities.
Stop-loss premiums started climbing in late 2024, after stop-loss insurers began to report seeing a big, unexpected surge in claims.
That year “was a difficult year for us, where claim costs exceeded our expectations rather meaningfully,” Evanko said.
The 2024 experience emerged too late for Cigna to put the effect of the rising claim costs in 2025 prices, he added.
“So, ’25 was a bit of a cutover year, or transitional year,” Evanko said. “In 2026, we’ve been able to get sizable price increases. And one of the things I’ve been really pleased with is the retention of our clients despite those higher-than-historical price increases. Then ’27 will be the final year of the margin recovery on our stop-loss portfolio. In ’27, we’ll complete the stop-loss repricing.”
Some of Cigna’s competitors describe themselves as being large independent stop-loss issuers.
Evanko said Cigna is the biggest stop-loss issuer overall, with about $8 billion in annual stop-loss premiums.
Evanko is on track to succeed David Cordani as Cigna’s CEO July 1.
Cigna streamed the call live online and has posted a recording on its website.
Employers and benefits advisors might be able to look at stop-loss renewal quotes for 2028 without first going through elaborate calming rituals.
Stop-loss insurance is insurance for self-insured health plans.
Cigna executives appear to be seeing stop-loss market conditions that are similar to what stop-loss issuers like Sun Life Financial and Voya Financial are discussing with their investors.
Both companies say they noticed a big increase in costs in 2024, but believe the current increases in claims are in line with the assumptions used to set 2026 prices.
Also at the conference, Evanko said:
- Natural growth in the number of prescriptions used by each individual is about 1% to 2% per year
- The number of people in employer-sponsored health plans has been growing about 0% to 1% per year.
- The number of lives in employer-sponsored plans with 50 to 500 participants has been growing in the “mid single digits, and, in some cases, high single digits.”
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