Many companies today are looking for ways to combat the increasing volatility of their self-funded health benefits.
Through its proprietary Precision Risk approach, Granular Insurance is able to segment risk, reduce variability and deliver a more accurate assessment of a client’s exposure.
Traditional employer stop-loss treats a covered population as a unit and builds protection around a single attachment point. With its Precision Risk approach, Granular segments a population into as many as 22 unique cohorts. By doing this, Granular is able to more accurately assess risk, monitor and impact the group’s performance, shift risk from the employer to the carrier and better manage costs.
Restructuring Risk
- Traditional stop-loss models provide a single deductible for each employer.
- Granular’s Precision Risk model assigns each member to one of 22 deductibles ranging from $20,000 to $1 million based on risk segmentation.
- Granular’s Precision Risk model reduces volatility and provides more consistent value from year to year.
- Segmenting members into Precision Risk categories provides better analytics for plan design and care management decisions.
The road ahead is uncharted. When it comes to insurance, nobody likes surprises. Granular Insurance places self-funded employers on a path of certainty with its multi-year rate and benefit guarantee: a meaningful cap on annual premium increases with moderate and predictable changes to an employers’ spec.
Financial Predictability
- Today, many traditional stop loss carriers offer one year, 50%, No New Laser, rate caps.
- With confidence in the Precision Risk model, and a commitment to longer term partnerships, Granular Insurance offers clients three to five year, Earn-to-Cap rate and coverage guarantees.
- For select clients, Granular will offer a three to five year rate guarantee, with a cap on annual premium increase of no more than 10% to 15%.
- Granular tightens this guarantee by offering a parallel cap on the cost-based composite spec deductible of no more than 3% to 5% a year and 15% over five years.
- Granular delivers meaningful, financial predictability.
There will always be variability. Granular’s Precision Risk underwriting delivers better estimators and tighter clusters of expected claims costs across the employers’ population, allowing Granular to offer attractive rates and multi-year rate and benefit guarantees.
Underwriting Predictability
- Traditional stop-loss underwriting factors in high-dollar claims, demographics, geographic factors and business sector.
- While Granular Insurance does look at these factors, it also harnesses Precision Risk analysis on first dollar claims for every member of the population.
- This takes into consideration the surprisingly high volume and volatility around lower and mid-range claims.
- There is a more consistent and predictable risk transfer between the employer and Granular Insurance.
- In 75% of 10,000 test cases, employers received more value from Granular’s Precision Risk approach.
With its Precision Risk approach, Granular Insurance offers protection from higher frequency and higher volatility claims through a mix of specific employer stop-loss deductibles, lowering employer risk both at the member level and overall level. This helps shift risk from employer to Granular.
Mind the Gap
- For employers that have spec and agg coverage, the Gap is the exposure above expected claims and below that aggregate attachment point.
- For employers that only purchase spec coverage, there is still exposure, and potential ‘claims creep’ above expected claims.
- Consultants and Carriers all focus on protecting against high-dollar claims.
- Data show that low and mid-level claims contribute significantly to overall claims volume and bring costly and unwanted volatility.
- With Precision Risk, segmentation and deductible cohorts as low as $20K, Granular Insurance brings great focus to these low and mid-level claims, shifting risk from the employer to the carrier.
- When a large actuarial firm simulated thousands of test cases, they found that over 75% of employer groups received greater value from Granular’s low deductible cohorts and Precision Risk segmentation.
- This approach better manages volatility and delivers optimal risk transfer and meaningful financial predictability.
- It allows employers to better control ‘claims creep’ and to mind the Gap.