Monday 01 June 2026 - Company news

Children Under Ten Are America’s Biggest Driver of Stop Loss Claims Exceeding $1 Million, Finds Tokio Marine HCC – A&H Group

Kennesaw, GA – (June 1, 2026) – HCC Life Insurance Company (operating as Tokio Marine HCC - A&H Group) (“TMHCC”), a member of the Tokio Marine HCC group of companies based in Houston, Texas, has released its 2026 Annual Market Report, revealing that the number of large stop loss claims are rising sharply at all claim thresholds, with children under ten years of age accounting for 39% of all stop loss claims exceeding $1 million, more than triple any other age group.  StopLoss_header

The report, which draws on six years of proprietary claims data, finds that claims above $2 million have risen 213% since policy year 2020. This year’s findings are particularly striking as the 2025 claims trend has come in even higher than 2024; a year that had itself prompted widespread market speculation about whether costs had peaked. A significant factor is the duration of the most complex cases. Conditions that lead to the largest claims are not only becoming more frequent, but they also require sustained, intensive treatment that keeps costs climbing long after the initial diagnosis or event.

The report points to a rise in catastrophic neonatal claims driven by complications from maternal obesity and later-age pregnancies as key factors Most claimants under ten in our data fall into perinatal, neonatal, and congenital or chromosomal abnormality categories, which is why this age group accounts for a larger share of claims over a million dollars.  Infants under the age of one average $1.37 million in claim severity for claims above $500,000.  For plan sponsors, that severity has a direct financial consequence. Higher stop loss claims drive increases in premium rates at renewal.

Cancer remains the single biggest driver of stop loss exposure, accounting for just over 35% of total paid claims and has grown as a share over the past four years, followed by cardiovascular diseases at nearly 13%. Nervous system disorders have moved into third place among the diagnostic categories with the highest total costs last year, a shift the report links to rising prescription drug costs. Mental and behavioral health are also on the rise, with the report finding that frequency rather than severity is the main cost driver. This pattern connects to the broader reduction in stigma around seeking mental health treatment. 

The report also includes data on:

  • Frequency of Large Claims: The frequencies of Stop Loss claims per covered live are increasing at all claim size levels due to acceleration in medical/Rx cost increases
  • Trends in Transplants: Record transplant volumes in 2025 totalling 49,065, with heart transplants reaching 4,587, liver transplants climbing to 12,344, and living donors hitting a new high of 7,239
  • Cost Containment Savings: Payment integrity and specialist contracting programs generated $2.7 million in Preliminary Claims Unit savings and $27.6 million in Specialty Claims Unit savings in 2025
  • A Stop Loss Trend Surprise: Year-over-year trends in January 2024 and 2025 came in 5.0 and 9.2 percentage points above the prior five-year average

Jay Ritchie, President & CEO of Tokio Marine HCC - A&H Group, said: “The conditions driving the largest claims aren’t new, but their cost trajectory is. The market is still catching up to price this risk adequately, and employers are actively seeking to improve cost management and mitigation. The brokers and plan sponsors that bring more solutions sooner will be in a very different position than those who don’t.” 

The release of TMHCC – A&H Group’s 2026 Annual Market Report comes as self-funded employers face a healthcare cost environment that is structurally different from even five years ago. A rise in catastrophic neonatal cases, sustained pressure from cancer and specialty prescription drugs, and growing mental health service usage are combining to make the largest claims both more frequent and harder to predict. 

See the full report here.

END

Tokio Marine HCC is a member of the Tokio Marine Group, a premier global company founded in 1879 with a market capitalization of $86 billion as of March 31, 2026. Headquartered in Houston, Texas, Tokio Marine HCC is a leading specialty insurance group with offices in the United States, Mexico, the United Kingdom and Continental Europe. Tokio Marine HCC’s major domestic insurance companies have financial strength ratings of ‘A+’ (Strong) from S&P Global Ratings, ‘A++’ (Superior) from AM Best, and ‘AA-’ (Very Strong) from Fitch Ratings; its major international insurance companies have financial strength ratings of ‘A+’ (Strong) from S&P Global Ratings. Tokio Marine HCC is the marketing name used to describe the affiliated companies under the common ownership of HCC Insurance Holdings, Inc., a Delaware-incorporated insurance holding company. For more information about Tokio Marine HCC, please visit www.tokiomarinehcc.com.

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Brian Norris
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