Medical stop-loss insurance remained under pressure in 2026 as employers and carriers face persistent higher healthcare costs, rising claim severity, and a growing number of multimillion-dollar claims.
Our fourth annual Stop-Loss Market Update brings together the latest financial results, market trends, high-dollar claims analysis, and advanced analytical approaches currently shaping the stop-loss insurance market. This year’s report found that incurred claims are increasing faster than premiums, and the largest claims are becoming both more frequent and more costly.
Stop-loss market loss ratios rise as claims outpace premiums
Stop-loss carrier premium revenue reached approximately $43 billion in 2025, representing average annual growth of 12% from 2020 to 2025. Much of that growth has been driven by higher per-member-per-month (PMPM) premiums, while the average number of covered lives has remained relatively flat over the period. At the same time, claim volume rose. Between 2019 and 2025, PMPM claims increased at an average annual rate of 13.1% market wide, compared with 10.3% for PMPM premiums. As a result, the total market loss ratio hit 91.3% in 2025, its highest level during the six-year period.
These results are contributing to a market that remains firm, competitive, and highly responsive to claims volatility, specialty drug trends, and broader medical inflation. Employers are continuing to look for ways to protect balance sheets and stabilize self-funded benefit costs, while carriers are balancing disciplined underwriting with the need to win and retain accounts in a crowded market.
Multimillion-dollar stop-loss claims continue to surge
One of the clearest pressure points in today’s stop-loss market is the steady growth of high-dollar claims. From 2020 to 2024, the incidence of claims exceeding $2 million increased 150%, while claims exceeding $5 million jumped 267%. Many of these high-dollar claims are associated with transplants, cancer, congenital conditions, and neonatal care.
The effect becomes even more pronounced at higher attachment points. From 2023 to 2024, leveraged claim trends reached 21.3% above a $100,000 attachment point and 44.2% above $2 million. Inpatient services represent a particularly significant share of the largest claims, accounting for 66.8% of costs among individuals with claims above $2 million in 2024.
Cancer treatment remains a major source of high-cost claims, while injectable drugs, specialty pharmacy, and emerging gene and cell therapies are adding to the price tag for the disease, as well as new layers of uncertainty.
Given the growth in high-cost claims, many stop-loss carriers are attempting to anticipate which members are most likely to incur the highest claims and in what cases interventions could make an impact. Advanced analytics and AI are creating new ways to address that challenge.
What rising high-dollar claims mean for stop-loss in 2027
In today’s healthcare landscape, effectively navigating high-cost claims is vital for insurers. The trends discussed in our Fall 2026 report point in one direction: Claims exceeding $1 million are becoming more frequent, and the largest claim amounts are growing fastest. There is little reason to expect this trend to slow or reverse in 2027.
For stop-loss carriers and self-funded employers, the question is no longer whether high-dollar claimants will emerge, but how many will emerge and how quickly.
