Sun Life Financial has been increasing medical stop-loss insurance sales as some competitors have backed away from the market.
Employers with self-insured health plans use medical stop-loss insurance to protect the plans from catastrophic claims and from the kinds of big, unexpected surges in smaller claims that might be caused by a bad influenza outbreak.
Sun Life's U.S. medical stop-loss premium revenue rose 43% between the first quarter of 2025 and the first quarter of this year, to $63 million, the company reported last week.
The sales increase reflected "continued success in winning high-quality business in a hardening market," Timothy Deacon, Sun Life's chief financial officer, said during a conference call the company held to go over results for the latest quarter with securities analysts.
Stop-loss sales were up even though Sun Life raised prices and took a tough approach to underwriting, Deacon said.
Sun Life lumps stop-loss together with group dental insurance and group disability insurance when it reports how well the product has performed. The overall after-tax profit margin for the group benefits products fell to 7.4%, from 8%. But David Healy, president of Sun Life U.S., said the profit margin fell because the performance of the dental plans and disability plans weakened.
"The stop-loss business continues to perform well," Healy said. "We did see material improvements in that business."
What it means: At least one stop-loss insurance issuer is happy to sell more business — but it wants to talk to employers that are doing a good job of managing health plan claim risk and that are willing to pay what Sun Life is asking for coverage.
Sun Life's stop-loss business: Sun Life is the top U.S. stop-loss provider that does not sell stop-loss insurance along with medical claim administration services.
Its medical stop-loss premium revenue rose to $839 million in the latest quarter, up from $691 million in the year-earlier quarter.
Stop-loss fee income increased to $8 million, from 7 million.
Total group health and benefits revenue held steady at about $2.1 billion.
The group health benefits total was soft because Sun Life includes Medicaid and Medicare Advantage dental plans in that category. Medicaid and Medicare plan dental revenue fell to $482 million, from $628 million, due to policy changes and cost-cutting pressure in the government plan market.
The stop-loss insurance backdrop: Sun Life appears to be the company talking the most about the performance of its stop-loss insurance business, but other issuers seem to be happier with their stop-loss units.
Executives at Cigna said little about the company's stop-loss insurance business when it posted results for the first quarter, but sales were up, and executives said nothing negative about claim costs.
Executives at Voya are facing pressure from an activist investor to consider selling their stop-loss business, but they reported an increase in stop-loss sales and said the loss ratio has improved.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.