January 1st is the worst renewal date to choose for a stop loss renewal, or any insurance renewal – especially if you are a MEWA.
Many MEWAs and other businesses choose January 1st for their renewals, thinking it is best to coincide with its fiscal year. However, they do not consider the insurance company underwriter who will review their risk. Most do not realize that 70+% of all insurance renews on 1/1.
Therefore, the underwriters from the insurance companies are receiving hundreds – if not thousands – of renewals and new business submissions. They have more submissions than they can even read and are literally overwhelmed. I know this from firsthand experience.
Underwriters must do triage in order to wade through all the submissions. Current client renewals are the priority and new business is culled for only the best opportunities. Prospects that are rate shoppers, brokers with little or no business with them, or those who have obstacles to quote, are declined immediately.
When a MEWA is submitted for a stop loss quote, it has many obstacles. Underwriters often cannot release or even quote a MEWA without compliance’s approval. Those folks are often hung up on the word MEWA, let alone if it meets their qualifications. So most MEWA submissions will go to the decline pile, as the added work is not worth the effort.
Therefore, if you are a MEWA, you might consider moving your renewal date for your stop loss, liability and other coverages, to any date other than January 1st. This way, the insurance companies are more likely to quote and hopefully provide competitive terms.
