Renewal Preparation
- 1Claims data analysis: Analyze 3 years of claims data to identify trends and cost drivers
- 2Health management documentation: Document all health management programs and their outcomes
- 3Large claim explanation: Prepare explanations for any large claims (one-time vs. ongoing)
- 4Market comparison: Get quotes from 3–5 carriers to create competitive pressure
- 5Renewal meeting: Present claims data and health management story to the carrier
- 6Negotiation: Use market quotes and claims data to negotiate favorable renewal terms
Leverage Points
Employers with favorable claims experience have significant leverage at renewal. Key leverage points: (1) favorable loss ratio — if your claims are below the carrier's expected level, you have leverage to negotiate lower rates; (2) health management programs — documented programs that are reducing costs demonstrate future favorable experience; (3) market competition — quotes from competing carriers create pressure on the incumbent carrier.
Multi-Year Contracts
IQ Insight
Multi-year contracts can lock in favorable rates for employers with strong claims experience. A 2–3 year contract with rate caps (e.g., maximum 5% annual increase) provides rate stability and protects against market hardening. Carriers are willing to offer multi-year contracts to employers with favorable claims experience — it reduces their underwriting risk.