New to group benefits – Do you know what a group benefits loss ratio is?

Currently have a plan – Do you know what your group’s loss ratio is?

Do you know how your loss ratio determines your renewal premiums?

Once you decide on a plan design you’ll likely gather quotes from several sources and compare pricing. Although the core plan designs are likely similar between the quotes you’re comparing – there are subtle differences contained in the finer details. One of the most important of these finer details is called your group’s loss ratio.

Your group’s loss ratio is a guide and sets expectations for your renewal. Renewals occur annually (sometimes your first renewal may be longer) and allows the insurance company to adjust your rates. Rate adjustments depend on your group’s usage and the ever evolving demographics of the group, such as the average age of your employees. The loss ratio determines the size of your rate adjustment given a particular amount of usage.

The group benefits loss ratio might be best explained through a visual representation:

Group Benefits Loss Ratio

As shown in the above illustration, 70% (or $70 in this case) is the magic number, your loss ratio. If group claims are 70% or below; there is no increase in rates based on claims experience. If your group claims are 71%+ (or, $71+ in this case) then your premiums will be adjusted upwards. This means, in every case, it is more beneficial for your group to have a higher loss ratio. Generally, pooling results in higher loss ratios versus stand alone plans (not pooled products).

The Olympic Benefits Plan is exclusively offered through Northern Financial Group. The Olympic Plan is pooled which means your group will enjoy the advantages of a higher loss ratio. For more details on the plan please visit our Olympic Benefits page or contact us.