Reading the Renewal Package — A Checklist

A renewal package arrives, an increase is quoted, and most employers accept it because they have no basis on which to argue. This is that basis. Work through it in order.

The checklist

01
Confirm the policy year dates
Read them off the experience report column headers, not from memory. They tell you your real anniversary — which employers misremember constantly.
02
Check whether the final column is a completed year
If it is, the renewal has already happened and any rates you hold are stale.
03
Identify paid versus incurred on every figure
The most common reason two documents about the same plan disagree.
04
Split the loss ratio by line
Never accept a blended figure. A healthy blend routinely hides one line running well above target.
05
Compare each line to its target loss ratio
Under target is your argument. Over target is theirs. You cannot argue either until you have both numbers.
06
Note the credibility
It tells you how much of the renewal is genuinely about your group and how much is the insurer’s book.
07
Compare rate trend to claims trend
If premium has grown faster than incurred claims over several years, that gap is recapture and it is your strongest documented argument.
08
Check the benefit schedule against the non-evidence maximum
Look for anyone whose formula puts them above the NEM without medical evidence on file. This is the most common uncovered exposure on small plans.
09
Confirm who pays the LTD premium
Employer-paid makes the eventual benefit taxable to the employee. Employee-paid makes it tax-free. Free to fix.
10
Identify anyone off work or on modified duties
A disclosure obligation on any move, and a pre-existing condition exposure if the disability line changes insurer.
11
Ask about pooling level and rate guarantee on every competing quote
A cheaper rate with weaker pooling or a shorter guarantee is not a like-for-like comparison.
12
Ask whether an accumulated deficit exists
It can follow the plan out the door and it is often the hidden reason a renewal looks punitive.

If you only do three things

Write down the incurred loss ratio by line, the target loss ratio, and the credibility. Those three numbers tell you whether there is an argument to make, how strong it is, and whether the insurer is obliged to listen.

How Insurers Build LTD Reserves