Stop-Loss Pricing Tool Validation and Fractional Actuarial Support for a Managing General Underwriter

Objective

A managing general underwriter launching a medical stop-loss division engaged Graeme Group for actuarial pricing and underwriting support. The MGU had licensed a third-party pricing tool to quote stop-loss business and had begun to question its output. Before writing risk on the tool’s numbers, management wanted an independent actuarial view of how the tool rated a case, what its network and discount assumptions were doing, and whether its cost-savings claims held up.

The MGU did not need, and did not want, a full-time actuary. It needed senior stop-loss pricing judgment available on demand: a first project with a defined question, followed by pricing and underwriting support as the book developed. The brief was to structure that capability so that the MGU could draw on it without carrying it as fixed overhead.

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:

• Review of the tool’s rating output against independent actuarial expectation.
• 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

Project First, Then Retained Support

The engagement opens with a bounded question rather than a standing retainer. Validating the pricing tool gives the MGU a concrete deliverable, gives the actuary a working knowledge of the MGU’s book and systems, and lets both sides calibrate the ongoing support to what the business needs once it is writing risk. Hourly rates are set by consultant level, and work is drawn against an engagement deposit that rolls forward, so the MGU sees exactly what it is consuming.

A Senior Stop-Loss Actuary from the Partner Network

Delivery is led by a senior consulting actuary specializing in medical stop-loss pricing and underwriting, engaged through Graeme Group’s partner network and presented to the MGU as part of the Graeme Group team. Additional consulting actuaries and analysts are available as the work requires. The MGU contracts with one firm, receives one invoice, and has one point of accountability.

Contracting in Three Weeks

The introduction, discovery call, pricing proposal, non-disclosure agreement, a working session between the MGU’s leadership and the delivering actuary, and a fully executed master agreement with its first statement of work were completed within three weeks. The MGU’s leadership confirmed the pricing tool review as the first project on the day 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’s leadership has confirmed the independent validation of its pricing tool as the opening project and connected its team with the delivering actuary.
• Next: Kickoff of the tool validation, followed by ongoing pricing and underwriting support as the stop-loss division begins writing business.

This page describes an engagement in progress and will be updated with outcomes as the work completes. It reflects the advisory side of Graeme Group’s practice applied to health and employee benefits: senior actuarial judgment made available to a growing business at the point it needs it, structured so that the first question is answered before the standing support is sized.