Our Services > Group Benefits
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Companies typically offer group insurance to their employees on an insured basis with the objective of:
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- Minimizing business risk for the employer
- Stabilizing their benefit costs
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| In today’s business environment, it is becoming increasingly more difficult
for companies to avoid increasing costs associated with employee benefits provided through insurance
companies. Typically, the benefits that are provided are; life insurance, accidental death and
dismemberment, dependent life insurance, health, dental, weekly indemnity, long term disability and
critical illness insurance.
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| The following factors have attributed to escalating employee benefit costs on
an insured basis: |
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- Less Competition due to consolidation in the industry.
- Shareholders are mandating a 15% ROI to insurance companies.
- The less profitable lines of business have to increase costs. Traditionally benefit lines have operated on low margins, we are seeing this disappear.
- Drug costs are rising. The annual inflation (Trend) factors that insurers utilize are between 15 – 21%.
- Incurred claims are used to calculate renewals. Typically this is 4-5% higher than the actual paid claims.
- A utilization factor of approximately 2.5% is then factored into the equation.
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