Heather Lavallee, Voya's chief executive officer, said during a conference call with the analysts that the company has responded by imposing "meaningful rate increases" and strengthening underwriting risk selection.

Voya increased renewal rates by an average of 21% for all stop-loss customers, and, "at some of the underperforming blocks, the increase was much higher than 21%," according to Michael Katz, Voya's chief financial officer.

Related: Voya is doubling stop-loss price increases for 2025

Voya is also emphasizing to sales reps that profit margins matter more than growth, and the company is now insisting on seeing the latest claims data before finalizing quotes, Katz said.

Voya held the sales call to go over earnings for the fourth quarter with the analysts.

The company as a whole is reporting $121 million in net income for the quarter on $2 billion in revenue, compared with $102 million in net income on $2 billion in revenue for the fourth quarter of 2023.

But the group stop-loss business is reporting a $71 million operating loss on $451 million in premiums, compared with $85 million in operating earnings on $368 million in premiums for the year-earlier quarter.

Voya let stop-loss sales fall to $12 million in the latest quarter, from $25 million.

Company executives did not talk about the types of claims that accounted to the surge in costs. In December, the company said in a notice filed with the U.S. Securities and Exchange Commission that it had experienced a higher frequency of claims, but it did not talk about the mix of claims in that notice.

The company was able to keep the business of about 75% of the health plans that performed well.

Katz promised the analysts that the company has set aside enough reserves to cover any fourth-quarter claims that might arrive later.

"As you can imagine, we've not only been looking at this internally, but we've had external eyes on this as well," Katz said.

The backdrop: The United States lets employers avoid state insurance regulation by running their own self-insured health plans.

An employer with a self-insured health plan can buy stop-loss that protects against very high claims for specific patients, very high claims for the entire plan, or both.

Reports about the state of the stop-loss market may provide an unusually clear picture of how the employer-sponsored health benefits market is really doing.

Executives from Cigna recently said that their company saw a surge in stop-loss claims in late 2024 and expects to increase stop-loss prices significantly over the next two years.

Another stop-loss market player, Sun Life Financial, has argued that competitors have underpriced their coverage. One sign of how bad the stop-loss market is really doing will be what executives from that company say about their stop-loss results for the fourth quarter. Sun Life is set to release its earnings Feb 12.