Healthcare Sub-Markets

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Stop-Loss Insurance Market Size

US Market Size

  • The market size of stop-loss insurance in the United States was between $14 billion and $17 billion in 2016, rising from the pre-Affordable Care Act value of $8 billion to $10 billion.
  • According to a 2019 Business Wire report, the net premiums for stop-loss insurance in the US have doubled over the past 5 years (since the Affordable Care Act went into effect). This is evident in the growth of the net premiums earned, from $9.2 billion in 2013 to $18.6 billion in 2018.

Stop-Loss Insurance Helpful Findings

  • Researchers note the market is evenly shared between each type of carrier at $7.5 billion and $8 billion.
  • Stop-loss insurance has exceedingly surpassed the growth rate of traditional group health insurance.
  • Companies that registered a minimum of $10 million in stop-loss premiums in 2018 experienced a 102% growth.
  • Based on a report by S&P Global Intelligence, "the current stop-loss market size stands at $20 billion in premium."

Research Strategy:

Although we found the market size for the stop-loss insurance industry in the United States, we were unable to identify any breakdown of the stop-loss industry by region/state. In an attempt to find a breakdown of the stop-loss industry by region/state, the research team began by searching through the public domain for news reports from trusted media sources, market surveys, research works, and publications but did not find any precompiled data on the breakdown of the stop-loss industry by region or state. Next, we looked into the key market players as revealed by our search in an attempt to find out any linkage or listing of the state with the largest share of the stop-loss insurance market. Our search was futile as we were unable to identify any such listing. We further searched through the website of the companies' insurance sources listed for any individual market report or survey conducted by the sources on the state of stop-loss insurance in the United States but found none. Finally, we decided to search through the database of top US states by population and employment to find out if any of the states have listed its stop-loss survey or analysis. Our search revealed that although most states had a policy on stop-loss insurance, there was no trace of any document containing the market share by state in the US stop-loss market nor were there any details about individual state's stop-loss market size to aid triangulation.
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Voluntary Benefits Market Size

The market size of the voluntary benefits insurance industry in the US by the total premium paid was $7.2 billion in 2018.


  • Based on the total premium paid for voluntary benefits insurance products annually in the US, the industry's market size was $7.2 billion as of 2018.
  • The industry experienced a 3% growth when compared with the market size in 2017.
  • The fourth quarter of 2018 revealed an 8% increase in the "new voluntary life insurance premium," compared to 2017.
  • According to LIMRA, an additional 11% of employers in the US offer voluntary benefits as a part of their "overall employee benefits package" since 2010.


  • Ensuring financial security for employees makes them happy and more productive. While "two-thirds of American adults say they would struggle to come up with $1,000 to cover an emergency," most high deductible health plans (HDHPs) expose employees to more elevated amounts. As a result, their financial security is at risk.
  • Insurance products such as "accident, critical illness, and hospital indemnity insurance" strengthen the financial position of employees, and aids their healthcare coverage in the event of a sudden medical event.
  • According to "Benefitfocus' State of Employee Benefits 2017, nearly half of large employers now offer at least one of three common voluntary income protection benefits: accident, critical illness and/or hospital indemnity insurance." This statistic shows a year-over-year growth of over 30%.
  • According to the "State of Employee Benefits 2018 Regional Edition" by Benefitfocus, the majority of employers offering a voluntary benefits plan for accident, critical illness, and/or hospital indemnity insurance products, usually provides all three of them.
  • This graph provides the percentage of employers offering one, two, or all three voluntary benefits insurance products in the Midwest, Northeast, South, West, and throughout the US.
  • It also shows that when presented before employees in the US, they are more likely to choose a single voluntary benefits plan for an accident, critical illness, or hospital indemnity, rather than for multiple products.


  • The education industry showed a 62% year-over-year increase in the number of employers that offer voluntary benefits. Other sectors which experienced growth include healthcare (19%), retail (16%), and manufacturing (62%).
  • In 2016, the percentage of employers offering voluntary benefits was 21% in education, 48% in healthcare, 43% in manufacturing, and 34% in the retail industry.
  • In 2017, these values grew to education (34%), healthcare (57%), manufacturing (50%), and retail (55%).
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Stop Loss Insurance Market Analysis

In the United States, the top five players of Stop loss insurance by market share include Cigna Corporation (17.8%), CVS Health Corporation (8.7%), United Health Group Incorporated (8.4%), SunLife Financial Inc. (7.8%), and Anthem Inc. (7.8%). With the Affordable Care Act, the stop loss market has increased its value to $15 billion, rising from $8-$10 billion due to increased plan enrollment and premiums that were fueled by the legislation.


  • The stop-loss insurance market has achieved considerable growth moving from $9.2 billion (2013) to about $18.6 billion (2018) in net premium earnings, owing to greater interest in the segment.
  • The stop-loss segment is growing steadily when compared to the traditional health group market. In 2018, businesses that wrote around $10 million in total for stop-loss premiums witnessed the line expand by 102%, while registering a decrease of 11% regarding group commercial NPEs since the year 2013.
  • The adoption of the Patient Protection and Affordable Care Act (ACA) granted health and life insurers the confidence to take on more risks. Consequently, in the past six years, stop loss net premiums have more than doubled, rising to $14.3 billion (2016) from $6.7 billion (2011).


  • Stop loss insurance customers are typically employers looking to self-protect from risks related to self-insurance such as pharmacy claims or medical catastrophies. In 2017, over 50% of enrollees in self-insured plans were from the private sector.
  • There are three customer segments in the stop-loss insurance market, including employers with over 500 workers, employers with between 100 and 499 employees, and employers with under 100 employees.
  • The AM Best report highlights findings from the Medical Expenditure Panel Survey that found that self-insurance rates among employers employing over 500 workers fell from 80.4% to about 78.7% between 2015 and 2018.
  • Similarly, rates dropped from 30.1% to 29.0% among employers with 100-499 workers, while rates for those with under 100 employees dropped from 14.2% to around 13.2% between 2015 and 2018.
  • These specific customer segments are attracted to self-insurance, citing overall flexibility and cost saving capabilities.
  • As opposed to traditional group insurance plans, self-funded plans grant employers the advantage of not being subject to minimum loss ration qualifications and various health insurer fees, and they are not required to offer every benefit as authorized by the Affordable Care Act (ACA).


  • The top five players of stop loss insurance in the U.S. in terms of market share include Cigna Corporation (17.8%), CVS Health Corporation (8.7%), United Health Group Incorporated (8.4%), SunLife Financial Inc. (7.8%), and Anthem Inc. (7.8%).
  • In terms of net premium earnings (NPE), the top five stop loss writers include Cigna Corporation ($2.516 billion), UnitedHealth Group Incorporated ($1.308 billion), SunLife Financial Inc. ($1.167 billion), Anthem Inc. ($1.050 billion) and Tokio Marine Holdings, Inc. ($1.010 billion).
  • The top Blue Cross Blue Shield (BCBS) stop loss writers both by BCBS market share and net premium earnings (NPE) include Health Care Service Corp. Mut Legal Reserve, Blue Cross Blue Shield of Mut Ins. Co., Anthem Insurance Companies Inc., Community Insurance Co, and Wellmark Inc.
  • Collectively, the Blue Cross Blue Shield (BCBS) system serves as the most prominent player in the market as in 2016, it comprised almost $3.9 billion of the net premiums earned, which was roughly 27% of the stop loss market. For the various BCBS organizations revenues from stop-loss greatly increased between 2012-2016. Compared to the five-year average NPE of approximately $3.0 billion, the three-year average NPE by 2016 was around 24% higher.



  • Some states in the United States have started passing laws with the aim of regulating stop-loss insurance plans as health insurance policies and institute assessments on them in relation to their insurance operations that are high-risk.
  • The Self-Insurance Institute of America Inc. (SIIA) has a “model act” with proposals to separately regulate the industry as stop-loss as opposed to "health insurance under state law."
  • The Affordable Care Act (ACA) has disrupted the stop loss insurance markets through factors such as: (i) dismissal of both lifetime and annual maximums, (ii) dismissal of exclusions for pre-existing conditions (before the legislation, employers were allowed to briefly pass over members that were high risk), (iii) extended taxes on wholly insured health policies, and (iii) both the individual mandate and the expansion of coverage to dependents up to 26-years of age have raised employer-sponsored policy membership.
  • With the Affordable Care Act, the stop loss market has increased its value to $15 billion, a rise from $8-$10 billion before its passage. The modifications that came with the ACA led to increased plan enrollment and premiums to the advantage of providers.
  • The U.S. House of Representatives passed the Self Insurance Protection Act in 2017. The law assures that stop loss insurance cannot be combined with regulations directed at traditional health insurance.

Research Strategy:

To conduct an analysis of the stop loss insurance market, we began by scouring through industry publications (e.g., a stop loss insurance site), media releases such as Business Wire, industry reports from AM Best and others, and market surveys from U.S. Milliman among others. Using this strategy, we found general information on the condition of the market, customer segments, regulations, and barriers to entry.
To find the key players in the market, we conducted a thorough search through industry publications and reports. We were interested in finding major players by market share or by net premium earnings (NEP). Luckily, we found a report by AM Best that had updated information on the top players in the market by both market share and NEP.
Next, to find major regulations impacting the stop-loss insurance market, we cross-referenced multiple sources and selected the regulations that were commonly discussed across multiple reputable industry sources. We also focused on regulations that had considerable impact on the stop-loss market. For instance, an article published on Milliman noted that since the Affordable Care Act (ACA) took effect, it has led to the market being valued at $15 billion, a noticeable rise from $8-$10 billion.
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Voluntary Benefits Insurances Market Analysis

The current market conditions of the voluntary benefits insurance market in the US suggest prolonged market growth. Several factors are responsible for the growth of this market, including innovative product plans, newer and informed design strategies, effective underwriting and pricing plans, variety of distribution channels and customer engagement approaches enabled by modern digital platforms.


  • As per the recent "LIMRA's US Worksite/Voluntary Sales Study", the US voluntary benefits market has experienced a 3% year-over-year change in the annual sales growth of the market between the year 2017 and 2018.
  • "The employee and voluntary benefits landscape will continue to transform as the needs and expectations of the "workers" and "employees" shift, health care reforms continue to change, marketplaces evolve, new products are introduced, and new competitors emerge from within and outside the industry."
  • "One of the most significant shifts will be the surge in employee demand for unique, innovative voluntary benefits offered by employers to enhance their employer-paid offerings."
  • The variety of employee benefits that are available to employees and the rising healthcare costs are burdening the employers to include attractive packages for their employees. "Adding to this, US employers face cost pressures and the effects of the Affordable Care Act (ACA) that have contributed to the shifting of more responsibility for choosing and paying for benefits to employees."
  • Technology is one crucial factor that is driving the growth of the industry, from the implementation of employee benefits insurance programs to "reaching, underwriting and servicing the employee and voluntary benefits market", tech solutions have been extremely important.


  • The employee benefits industry caters to both brokers and employers of all sizes and industries. Currently, the technology sector employers are leading the race by providing a unique combination of traditional and modern innovative benefits to their employees. These benefits include but are not limited to "healthcare, disability, term life, pet insurance, student loan repayment, and several other benefits.
  • The sales funnel for the employee benefits programs includes the primary insurer (for instance, Allstate Benefits), a broker, and an employer. The broker is not always involved in the purchase of employee benefits programs; sometimes, the employers directly reach out to the primary insurers. Additionally, most primary insurers cater to insurance brokers and employers differently; for instance, Colonial Life, a primary insurer, on its official website offers different contact segments for agents, brokers, employers, and individuals.
  • Large and mid-size employers are the actual target customers of the employee benefits insurance market, particularly health insurance. Most of these companies operate in the technology sector. "Close to 90 percent of employees in large and mid-size private businesses are offered medical benefits, according to data released by the Bureau of Labor Statistics." "Larger businesses tend to see higher participation in employer-sponsored insurance plans than their smaller counterparts."


  • Eastbridge Consulting is a popular ranking website which provides an annual evaluation of the US employee benefits market, and it also ranks the top companies leading the industry for the year.
  • As per the recent evaluation by the Eastbridge Consulting company (2018), the top competitors in the employee benefits segment include Aflac US, Allstate Benefits, Cigna, Colonial Life, and Guardian Life Insurance Company of America. These companies have been ranked by their annual sales of the employee benefits programs for the year 2018.
  • Media portals like Benefitnews also ranked Allstate Benefits, Aflac, Colonial Life as their top 3 insurers in the employee benefits segment of the insurance industry.
  • Allstate Benefits earned a revenue of $119 million in 2018 and Aflac US' sales for the fourth quarter of 2018 amounted to $537 million. Colonial life stood at $561 million of sales in the US, while the total annual sales of supplemental policies (employee benefits) for Cigna amounted to $12.56 million.


  • New entrants should be highly innovative in terms of crafting the perfect employee benefits packages for employers and employees. Most employers are concerned about the needs of their employees, and the employees are more interested in innovative and unique benefits like physical and financial wellness options, student loan assistance, and others. This demand for innovative programs and plans would trigger competition, and new entrants will have to be highly creative and cautious of the needs of the employer and the employees as the end-users of the employee benefits packages.
  • "The rapid rise of InsurTech and continued capital investment is a foundational element underpinning the shifting and deteriorating of marketing boundaries. The rapid rise of InsurTech is creating tremendous disruption and innovation in insurance." New entrants will have to gain a stronger edge with more advanced insurtech products to compete with the market leaders.
  • Increasing health costs have been and will be a challenge for new entrants because employers are looking forward to creative packages, which are affordable and are efficient for the employees. New entrants will have to balance the needs of the employer and the employees with the existing cost settings to gain customer satisfaction.
  • "With developments in technology, healthcare, government regulation, and consumer expectations and preferences all rapidly evolving, “strategic positioning” is likely to be a near-term proposition. New entrants will have to strike a perfect balance between the existing laws and the latest developments in the industry to meet consumer expectations. New entrants will have to consider the perspectives of both the sponsors and the employees for crafting customized and efficient solutions.


  • The Affordable Care Act (ACA) regulates compliance requirements for both the employers and the insurance companies. The act also mandates that any changes in the coverage of healthcare or other benefits are to be communicated to the employees along with several other compliance regulations.
  • "The Affordable Care Act (ACA) has contributed towards the shifting of more responsibility on the employers for choosing and paying for benefits to employees."
  • Employee Retirement Income Security Act ERISA establishes strict fiduciary duty standards for individuals who operate and manage employee benefit plans and requires that plans to create and follow claims and appeals procedures.
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Stop Loss Insurance Revenue Analysis

Stop-loss insurance companies generate revenue by mitigating high-cost losses in the form of catastrophic medical claims or medical bills exceeding a predetermined deductible. Stand-alone stop-loss companies partner with health insurance brokers, consultants, and third-party administrators to target self-insured companies.


  • Although Sun Life is headquartered in Canada, they are a leader in the U.S. medical stop-loss insurance market.
  • They offer other insurance services such as accident insurance, life insurance, disability insurance, and others.
  • They generate revenue by providing coverage for large medical claims from their employee(s) or medical claims "exceeding what an employer expected for an entire group".
  • They target companies that "self-fund the health and medical expenses of their employees".
  • They sell their products by partnering with Collective Health — an employer health plan management organization based in Silicon Valley — to provide medical stop-loss protection for self-funded companies.




  • Nationwide is an insurance company headquartered in the U.S.
  • They offer other insurance service ranging from business insurance (health, life, dental, disabilities, etc) to individual insurance (vehicle, renters, etc).
  • They generate revenue by mitigating unpredicted losses such as employees' medical bill exceeding the predetermined deductible.


To provide a detailed analysis of the business model for companies that offer stop-loss insurance in the U.S., your research team identified 3 case studies of companies that offer medical stop-loss insurance in the U.S. From these studies, we deduced the business model of companies in the medical stop-loss insurance sector.
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Voluntary Benefits Revenue Analysis

Voluntary benefits insurance companies generate revenue from premiums collected from employees who have opted to purchase one or more of the voluntary products they offer. Voluntary benefits insurance mainly target employees and avail their products through public health care marketplace private exchanges, insurance agents and brokers.

Revenue Model

  • Like all insurance companies, voluntary insurance companies generate revenue by charging premiums for insurance coverage.
  • These companies also generate revenue by reinvesting the premiums charged into other interest-generating assets.
  • The premiums charged can either be fully employee-funded or funded partly by both the employer and employee.
  • Most premiums are collected through payslip deductions.

Products Offered by Voluntary Insurance Companies to Earn Premium

  • Vision insurance: Its main purpose is to pay for eye exams, glasses, and contact lenses.
  • Dental insurance: Its purpose is to pay fillings, sealants, tooth removal, crowns, and dentures.
  • Accident insurance: Its purpose is to offset any unforeseen medical expenses arising from a covered accidental injury.
  • Critical illness insurance: It provides a lump sum benefit paid directly to the employee diagnosed with a covered critical illness.
  • Hospital indemnity insurance: It provides a lump sum benefit to cover out-of-pocket costs arising from a hospital stay.

  • Life insurance: It provides financial protection for the family members of an employee in case of an employee's death.
  • Personal travel accident insurance: It provides extra cover for individuals traveling internationally.
  • Identity theft protection: Its purpose is to monitor and alter the individual of any fraudulent use of their personal details.

  • Disability insurance: Its aim is to replace a part of the employee's pay if they become disabled.
  • Legal: It provides qualified attorneys at a reduced cost to the employee.
  • Financial counseling: Its purpose is to help employees manage their finances.

Personal voluntary benefits include:
  • Discount merchandise
  • Umbrella insurance
  • Concierge services
  • Homeowners, automobile, or pet insurance

Sales Channel

  • Voluntary insurance is available for purchase through the public health care marketplace.
  • It is also available for purchase through private exchanges, insurance agents, and brokers.

Target Market

  • The main target market for voluntary benefits insurance is the employees.
  • What distinguishes this type of benefit is the fact that they are paid directly to the employees.
  • Employees are targeted using various products including but not limited to health, security, wealth/lifestyle, and personal voluntary benefits insurance.

From Part 04
  • "Voluntary benefit products are taking advantage of technologies such as wearables, real-time data sources, microservices architectures and more, in order to fuel growth. As a result of the convergence of these market trends, both market disruption and opportunity have emerged for insurers in terms of voluntary benefits. From a disruption perspective, the emergence of new business models for benefits-related insurance highlight the early disruption of the marketplace by companies such as Zenefits and others"
  • "In the fight for talent, the tech industry is leading with innovative benefits providing a combination of traditional (healthcare, disability, term life, etc.) and new, innovative benefits (pet insurance, student loan repayment, etc.) or services that are more aligned to the different generational needs and expectations. Regardless, for both traditional and new benefits, one capability is critical: the portability of benefits if an employee should leave the company to work somewhere else, retire or join the gig economy. "
  • "Allstate Benefits provides accident, health and life insurance through employers and is one of the top five voluntary benefits carriers in the market based on a 2017 voluntary/worksite industry survey."
  • "Allstate Benefits adjusted net income was $119 million in 2018 compared to $95 million in 2017. The increase was primarily due to higher premiums and a lower effective tax rate from the Tax Legislation, partially offset by higher contract benefits and operating costs and expenses. Premiums and contract charges totaled $1.14 billion in 2018, an increase of 4.7% from $1.08 billion in 2017. "
  • "The top competitors in the voluntary benefits insurance market include Aflac U.S., Allstate Benefits, Cign, Colonial Life, and Guardian Life Insurance Company of America. "
  • "The high cost of health care and consequential evolution of insurance plans with high deductibles have created an improved market for voluntary products. Another reason for the increase in popularity of voluntary benefits is that commissions generated by them can be used to fund overall benefits administrative costs and project work done by TPAs and consultants that would otherwise be borne by the employer."
  • "Voluntary benefits are only going to increase in popularity for employers and brokers of all sizes as they become more essential in the lives of employees. "
  • "In the fourth quarter 2018, new voluntary life insurance premium jumped 8%, compared with prior year. For the year, voluntary life insurance products rose 3%, with substantial increases in accidental death & dismemberment and whole life product sales offsetting declines in voluntary term, UL and VUL sales. "
  • "New voluntary health insurance premium fell 3% in the fourth quarter but ended the year up 3%, compared with prior year results. For the year, growth in critical illness, accidental, short-term disability, vision and other supplemental health products drove the overall annual increase in voluntary health product sales."
  • "Close to 90 percent of employees in large and mid-size private businesses are offered medical benefits, according to data released by the Bureau of Labor Statistics. Larger businesses tend to see higher participation in employer-sponsored insurance plans than their smaller counterparts."
  • "Aflac U.S. sales increased 4.3% in the quarter to $537 million. For the full year, sales increased 3.2% to $1.6 billion."
  • "For the second straight year, Colonial Life has been named the fastest-growing voluntary benefits company among large carriers by Eastbridge Consulting Group. Colonial Life’s voluntary sales grew 8 percent in 2018, totaling $561 million. That’s the biggest growth of any company with more than $150 million in annual sales that has exceeded the industry average each of the past three years, according to Eastbridge. The performance earned Colonial Life the 2018 Voluntary Sales Growth Leader recognition."
From Part 06
  • "Most insurance companies generate revenue in two ways: Charging premiums in exchange for insurance coverage, then reinvesting those premiums into other interest-generating assets. Like all private businesses, insurance companies try to market effectively and minimize administrative costs."
  • "There’s a huge range of voluntary insurance plans out there in the market. Some examples include disability insurance, accident insurance, dental insurance or ‘softer’ benefits that may include retail or ticket discounts, gym memberships or concierge services like collecting dry cleaning. According to Willis Towers Watson’s 2013 survey, the most common voluntary benefits under the four banners of health, wealth, security and personal are:"
  • "Dental insurance can be purchased through the public health care marketplace. Other voluntary options, such as accident, disability, hospitalization and other choices, are available through private exchanges, insurance agents and brokers. The good news is that most voluntary insurance premiums are paid by employees who opt to enroll, so they can be offered by employers with little or no direct effect on their bottom lines."
  • "Voluntary benefits are optional, employee-paid benefits. Commonly referred to as "supplemental benefits," they have expanded with the rise of high-deductible health insurance plans and the availability of new kinds of benefits. As full-coverage medical plans have continued to get more expensive, employers are increasingly turning to personalized voluntary benefits to lower their costs and allow employees to choose the benefits that best fit their needs. Providing a variety of voluntary benefits is seen as a key human resources and HR technology strategy organizations use to recruit and retain employees."
  • "Alongside financial support, pet insurance, identity theft protection and legal help are other voluntary benefits that have gained traction in recent years."