Medical Stop-Loss Actuarial Support

Objective

A managing general underwriter launching a medical stop-loss division engaged Graeme Group to review a licensed pricing tool. Management wanted an independent assessment of the quoted rates, network and provider discount assumptions, and estimated cost savings before using the tool to price business.

The MGU needed senior stop-loss expertise for an initial review, followed by pricing and underwriting support as required, without employing a full-time actuary.

Scope of Work

The engagement is structured as an initial project followed by ongoing support, under a single master agreement.

The initial project is an independent validation of the MGU’s leased medical stop-loss pricing tool, covering:

• Comparison of the tool's rates with independent actuarial calculations.
• Review of its network evaluation and provider discount assumptions.
• Pricing of the reference-based pricing program the tool supports.
• Validation of the per-employee-per-month cost-savings figures the tool produces.
• Comparison of the tool’s hospital pricing benchmarks to independent sources.

Ongoing medical stop-loss pricing and underwriting support follows, as requested by the MGU. All work product is prepared for the MGU’s internal use, and no third party, including carriers or reinsurers, may rely on it without Graeme Group’s written consent.

Approach

Initial Review and Ongoing Support

The engagement begins with a defined project: reviewing the pricing tool. That work also helps the actuary understand the MGU's business and systems before agreeing the level of ongoing support. Work is billed at the agreed hourly rates against an engagement deposit, with unused funds carried forward.

Specialist Stop-Loss Actuary

A senior consulting actuary with medical stop-loss pricing and underwriting experience leads the work through Graeme Group's partner network. Additional actuaries and analysts are available if needed. The MGU contracts with Graeme Group and receives one invoice.

Contracting in Three Weeks

The introduction, discussions, proposal, non-disclosure agreement, working session, master agreement and first statement of work were completed within three weeks. The MGU confirmed the pricing tool review as the initial project when it signed.

Deliverables

• A written validation of the leased pricing tool: rating output, network and discount assumptions, reference-based pricing, cost-savings claims and hospital pricing benchmarks, with findings and recommendations for the MGU’s internal use.
• Ongoing medical stop-loss pricing and underwriting support on request, drawn against the engagement deposit at the agreed hourly rates.
• A single master agreement under which further statements of work can be added as the division grows.

Status

• Contracted: Master services agreement and first statement of work fully executed in September 2026.
• First Project Confirmed: The MGU confirmed the pricing tool review and introduced its team to the lead actuary.
• Next: Kickoff of the tool validation, followed by ongoing pricing and underwriting support as the stop-loss division begins writing business.

This engagement is in progress. Validation results will be reported when the work is complete.