Another True Story
A TPA recently gave a client their renewal. “Good news! Your costs are only going up 4% this year!”
“Ok, let’s go through the numbers” said the plan sponsor. And they did. Here’s what the plan sponsor figured out:
A 25% increase in stop loss premium produced a 4% overall cost increase with all other expenses and liability factors remaining the same.
Industry average stop loss commissions are 15%. In this case the pre-renewal stop loss commissions totaled $37,500. With a 25% premium increase commissions totaled $46,875. TPA gained a 25% commission bonus on a 4% increase.
