Product Shields Plans

Against Multiple Hits

ING Re is edging its way into the group health “multipleoccurrence” reinsurance market.

ING Re, a U.S. unit of ING Groep N.V., Amsterdam, introduced itsmultiple loss medical reinsurance product about a year ago. Companyexecutives say they believe the product might be the first of itskind.

The product will not protect health plans against terrorism, themost obvious source of big multiple occurrence claims. But theproduct will protect health plans against births of triplets,epidemics, night club fires, car wrecks that hurt several membersof the same family, and many other events that affect 3 or moreinsureds.

Health plans that buy the coverage and suffer multiple lossesstill have to pay a deductible, but they should get back more thanthey would collect if they had to pay 3 or more separate,conventional reinsurance deductibles or rely entirely on standardaggregate coverage, according to Michelle Fallahi, a vice presidentin ING Res Minneapolis office. ING Re is selling the product as aseparate agreement along with conventional reinsurance.

When pricing the product, “we spent a fair amount of timelooking at data for multiple births,” Fallahi says.

Quantifying the likelihood that other types of disasters willoccur is more difficult, but ING Re actuaries see evidence that theincidence is increasing, Fallahi says.

ING Re excluded coverage for the results of terrorism to keepcosts down.

Employers that are interested in the multiple-occurrence productshould work closely with benefits advisors to see how the coveragewould fit with standard aggregate coverage, says Stephen George,president of Provider Risk Inc., Miami, a reinsurancebrokerage.

George also recommends that employers review their history ofmultiple-occurrence claims.

Fortunately, at most plans, “it is very rare to get thecatastrophic hit, and tremendously rarer to get multiple-trauma,same-membership hits,” George says.

Reproduced from National Underwriter Edition, April 19, 2004.Copyright 2004 by The National Underwriter Company in the serialpublication. All rights reserved.Copyright in this article as anindependent work may be held by the author.