Making the Most of Insurer Relationships

Unlocking fair and sustainable rates through strategic and collaborative benefits insurer partnerships

Woman working on computer
Two people discussing benefits options

Is it Possible to Find Fairness and Long-Term Partnership with a Benefits Insurer?

Are you seeing rising benefits costs and want to take your plan “to market”? Every year, costs keep going up, but it doesn’t seem like you are getting more from your benefits insurer. You may switch insurers from time to time to take advantage of a lower quote elsewhere, but this is a headache for your HR team and your employees.

One of the most common influences of spikes in benefits costs is in the relationship between you and your benefits plan insurer. Insurance companies want your business, so when they’re invited to quote on your benefits plan, they may give you an attractive price to win your business. But this model isn’t sustainable, for either you or the insurer. When the insurer raises their rates, you’re forced to pay up or else keep switching insurance carriers, which wastes precious time you and your team should be spending elsewhere.

You could try to negotiate with insurers for better rates, but it’s a challenge to get a meaningful reduction without data analysis that shows why your request is evidence-based — or why the rate they’re offering is fair both now and in the long-term. If you’re not an expert in concepts such as “trend factor”, “incurred loss ratio”, “drug formulary”, “actuarial reserves” and “claims experience”, the process of analysis and negotiation is probably as appealing as a root canal.

Cracking the Code: Understanding Benefits Plan Pricing as an Effective Approach to Plan Negotiations

While there might be some room to negotiate a more favorable rate on your own or with a local broker, the solution to breaking this cycle is to accurately forecast the costs of your benefits plan and negotiate fair and sustainable rates from the beginning. This approach, combined with exploring alternative financial arrangements, will ensure a positive, long-term relationship with your insurance carrier.

Actuarial Analytics can help you navigate and negotiate complex insurance relationships to find a path to stability — and even build lasting relationships with insurers. With our data analytics capabilities and industry expertise, we help you assess the costs of your program and assess what is a fair offer. We analyze key metrics, such as utilization rates, cost projections, benchmarking, insurer reserving methodology, and employee demographics, to arm us with actionable insights as we navigate through the negotiation process. Our ultimate goal is to assist you in setting up a sustainable benefits program that is cost efficient and appreciated by your employees.

Insurer quotes typically include short term discounts of 10%-20%, which will be recouped at the first renewal. Our clients rely on our actuarial projections to determine the true cost of their programs, and select the providers who offer the most long term savings.

Ready to unlock better rates and long-term partnerships?

Discover how our expert negotiators and data-driven approach can help you secure fair and sustainable rates from your benefits insurer.