SOURCE: Reinsurance Direct

November 03, 2015 09:30 ET

Two Insurance Executives Launch Reinsurance Direct to Offer Medical Stop Loss Insurance Directly to Employers

Executives Aim to Change the Way Self-Insured Employers Acquire Stop Loss Insurance

SALEM, NH--(Marketwired - Nov 3, 2015) - Proclaiming they can significantly reduce an employer's medical stop loss insurance cost, two insurance industry executives have launched a new company, Reinsurance Direct, which will enable employers who self insure their medical benefit plans to purchase stop loss insurance directly from the source.

Reinsurance Direct, founded by former Munich Re Stop Loss executives Paul Fallisi and Susan Bowman, is the insurance industry's first entity to exclusively sell stop loss insurance directly to self-insured employers. Employer stop loss is used to protect companies that self-insure their employee health benefit plan against catastrophic medical expenses. By marketing directly to employers, Reinsurance Direct bypasses the middleman -- typically insurance brokers -- and eliminates their commissions, fees and overrides. The result is an insurance model with lower costs and savings that Reinsurance Direct passes along to employers. Typical savings are 12-16% although savings could be as high as 30% in extreme examples.

"Employer stop loss insurance is really a commodity. And while many factors such as contract provisions and customer service go into the decision of purchasing stop loss insurance, the most important factor is price," said Fallisi, Chief Executive Officer of Reinsurance Direct. "Until now, most stop loss insurance has been sold to employers through brokers. Unfortunately, the combination of brokers' commissions, fees and overrides may add 10% to 30% to the employer's cost. By eliminating brokers and their exorbitant expenses, we provide employers with significant costs savings."

In addition to offering a lower price for stop loss insurance, Reinsurance Direct differentiates itself from other providers by selling only to employers with at least 100 employees and who are currently self-funded. According to Fallisi, "In my actuarial experience, this group of risks exhibits more favorable experience. As a result, over the long run, this translates into a better pool of business which means our customers are not subsidizing substandard risk and will receive better rates. This follows our theme of offering clients a lower price. Additionally, self-insured employers will be able to purchase other stop loss options, such as aggregating specifics that can further reduce premiums."

Stop loss insurance policies are underwritten by Transamerica Premier Life Insurance Company, Cedar Rapids, Iowa, rated A+ by A.M. Best.* 

"We are very excited to be working with Sue and Paul again," said Horace Garfield, Vice President, Transamerica Employee Benefits. "With their years of stop-loss industry experience, I am confident that Reinsurance Direct will be very successful." 

"Due to technology and a mature product, the way in which employers acquire their stop loss insurance will change over the next decade," said Bowman, President of Reinsurance Direct, who notes that over 25,000 employers currently self-insure their employee medical plans and purchase stop loss insurance. "With health costs and the number of employers who self-fund their medical benefit plans increasing, the stop loss insurance marketplace will surely expand. We believe our direct to employer model offers the perfect solution for employers looking for cost-effective, high quality stop loss insurance."

* This rating is the second highest of 16 ratings and reflects the current opinion of the relatively financial strength and operating performance of Transamerica Premier Life Insurance Company as of July 15, 2015.

About Reinsurance Direct
Reinsurance Direct markets high deductible stop loss insurance directly to employer groups eliminating costly commissions, fees, and overrides. The result is a more efficient operating model with savings that are passed along to our customers. The company was founded by Susan Bowman and Paul Fallisi, both insurance executives and actuaries with over 50 years of combined stop-loss experience. For more information, please visit our website at reinsurancedirect.com or call 1.844.RD-4.VALU. (1.844.734.8258).

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