Recently, we looked at our client renewals from 2019, to question cost escalations based on Insurer trend factor surveys. These surveys suggested that benefit cost increases for health/dental were 8%-10% per annum. This number was the sticker price/MSRP, not the real rate of change.

In 2019, we showed a +0.8% annual increase across all benefit lines. Significantly lower than the trend surveys. Given covid-19, we wanted an early glimpse into our 2020 YTD mid-year results. We noted that our our average YOY increase stood at +1.2%; with only 3 groups having increases over 9%.

Annual changes have been somewhat homogeneous, but outliers have renewed as low as -19.7% and +30.1%.

Covid-19 has impacted claiming for 3 months. Dentistry by far, was the biggest casualty and there are signs of demand destruction in the near term for future claims based on aerosol spray and claimant perceptions.

Much of the experience used to calculate 2020 renewals was based on pre-covid-19. The anemic results, (irrespective of Insurer premium subsidies) will put downward pressure on renewal premiums, pushing down YOY changes from +1.2%, down as low as -3%.

Health/dental services have reopened but but claims remain muted due to appointment spacing, service restrictions and skeptical patients.