Employers with self-insured health plans use stop-loss insurance to protect themselves against catastrophic claims and spikes in total claim costs.

Rising stop-loss insurance claims mean that employers are having a tougher time managing health care costs. Big increases in stop-loss prices could force employers to buy fully insured coverage, reduce benefits or give up on offering health coverage.

Because big traded health insurers like UnitedHealth and Cigna tend to say little about their fully insured group health operations, insurers' comments about stop-loss results are one of the best sources of public information about what's happening inside employers' health plans.

Fishbein's comments are important because, in the past, he has suggested that stop-loss market competitors were complaining about their stop-loss unit performance because they had underpriced coverage in an effort to gain market share.

Related: Sun Life sees U.S. medical stop-loss market stabilizing

Voya said its ratio of stop-loss claims to premiums soared to 115% in the fourth quarter of 2024, up from 76% in the fourth quarter of 2023. The company had expected to see the loss ratio increase to 86%.

Sun Life still believes that it did a better job of pricing its coverage to reflect volatility caused by the COVID-19 pandemic and ordinary fluctuations in claim costs, but the surge that showed up in the fourth quarter was a big surge, Fishbein said.

"The loss ratio we're reporting, and the degree of price increases needed, are quite modest compared with what some of our competitors are reporting," Fishbein said.

Executives from other stop-loss issuers have said that they believe the recent claim surge at their companies was due to an increase in the size of big claims, not the result of an increase in the number of claims submitted or a significant increase in the number of big claims submitted.

Fishbein said Sun Life is also seeing an increase in the severity of very big claims.

The reasons: Fishbein said the company sees three main drivers for the increase in severity of the big claims. "One is, unfortunately, more advanced cancer cases," Fishbein said.

One reason is the lack of normal preventive screening during the early years of the COVID-19 pandemic, and another is the high cost of cancer drugs, he said.

"There are a number of new cancer drugs that are very promising, but also very expensive," Fishbein said. "And we have seen some elevation in the use of those drugs."

A second reason for an increase in the severity of big claims is "a pretty significant increase in premature birth and neonatal care," Fishbein said.

The overall number of U.S. births is up, the age of the parents is increasing, and more parents are using tools like in vitro fertilization to have children, he said.

"All of those things contribute to more premature births and neonatal intensive care as well," he said.

Fishbein cited increases in hospital care prices as a third factor.

Insurers are tough negotiators, but hospitals are having to make up for the impact of COVID-19 on their operations and the loss of COVID-related subsidies and supports, he said.

The earnings: Sun Life is a big, Toronto-based insurer with operations all over the world. Fishbein talked about the business during a conference call the parent company held to go over earnings for the fourth quarter with securities analysts.

The company reports its earnings in a different format than companies based in the United States use.

Overall net income for the quarter fell to 237 million Canadian dollars for the fourth quarter, from 749 million in the fourth quarter of 2023.

Companywide revenue figures were not available.

Sun Life's U.S. insurance operations, which include a wide variety of benefits operations in addition to the stop-loss business, reported $161 million in net income for the latest quarter on $3.1 billion in premium revenue, compared with $253 million in net income on $3 billion in premium revenue for the year-earlier quarter.

The stop-loss business recorded $561 million in new sales for the latest quarter, down from $572 million in the year-earlier quarter.

Stop-loss premium revenue increased to $685 million, from $650 million.

CORRECTION: An earlier version of this article described how Sun Life handled renewals incorrectly. For some employers, Sun Life proposed combinations of rate increases, benefits changes and other changes that led the employers to move to other stop-loss providers.