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The U.S. arm of Sun Life Financial raised renewal rates for employer stop-loss insurance 17% this year, but it still managed to increase stop-loss sales 56%, year over year.
Sun Life U.S. pushed stop-loss sales to $888 million in the fourth quarter of 2025, from $561 million in the fourth quarter of 2024.
U.S. employers use stop-loss insurance — insurance for health plans — to protect self-insured health plans against the risk of catastrophic claims.
Sun Life U.S. stop-loss sales grew so quickly partly because some competitors increased stop-loss prices even more, and partly because employer demand for stop-loss insurance was still strong.
"It has been a challenging environment," Kevin Strain, Sun Life Financial's chief executive officer, said Thursday during a conference call with securities analysts. "Both the severity of the claims and the price of the claims have been going up."
Sun Life held the call to go over results with the analysts. The company streamed the call live and posted a recording on its website.
What it means: Employers have traditionally seen combining stop-loss insurance with self-insured coverage as a more affordable alternative to buying fully insured coverage.
But there's no guarantee that finding affordable stop-loss insurance will continue to be easy.
The backdrop: Sun Life and other stop-loss issuers noticed a surge in claims in 2024.
Sun Life increased stop-loss prices 14% in 2025.
The health care cost increase trends were in the "high single digits" in 2025 and likely will continue to be in the high single digits this year, according to David Healy, the president of Sun Life's dental business.
The stop-loss price increases reflect changes in employers' deductibles and coverage terms as well as the underlying U.S. health care cost increase trends, Healy said.
Current conditions: Sun Life U.S. is in a good position in the stop-loss market this year because the 2025 price increases were big enough to compensate for much of the increases in claim costs, prices now seem to be in line with claims, and Sun Life is big enough to cope with shifts in the market, Sun Life executives said.
"If you don't have scale in this business, the individual claims amounts can be punishing," Strain said. "It's really important that we have had that scale.:
Some of the other players that are pulling back from the stop-loss market "don't have the same scale that we have," Strain said.
The future: Michael Ward, an analyst at UBS, asked the Sun Life executives why the company wants to increase stop-loss sales, in the face of all of the problems in that market.
Healy said Sun Life has a long track record of success in the market and is the biggest stop-loss writer that's not part of a big health insurer.
"We feel really good about this business and the path we're on," Healy said.
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