Cairnstone Re Executives Project Double-Digit Increase for Medical Stop Loss Coverage

Rates for employer stop loss medical insurance will rise significantly again next year as the health reinsurance marketplace continues to stabilize, according to executives with Cairnstone Re, an underwriter and medical management firm.

The company said it expects to see rates increase by as much as 30 percent in 2001, the second consecutive year that rates will have increased following several years of no increases. The marketplace also experienced consolidation among stop loss reinsurance providers this year, a move that Cairnstone Re says will change the way underwriters, third-party administrators and insurance brokers are conducting business.

“We believe that TPAs and insurance brokers will begin looking at the underwriting and medical management capabilities of stop loss reinsurance providers as well as their financial strength, responsiveness and service, rather than price, when arranging coverage for their self-funded clients,” said David Kelley, Cairnstone’s vice president of marketing.

“Additionally, companies will return to competing on brand identity and value-added services and not just price.” Stability appears to be the key element for the year 2001, according to Kelley. He noted that Cairnstone’s two major issuing carriers for their stop-loss product—PFL Life Insurance Co. and Kemper Insurance Co.—have made strong commitments to Cairnstone’s program for 2001.

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