High-cost claims in employer-sponsored health plans are accelerating at a pace that demands proactive management rather than reactive response, according to QBE North America's 2026 Accident and Health Market Report.
The annual report, which draws on QBE's proprietary claims data, found that neoplasms account for 36% of all stop-loss claim reimbursements, maintaining their position as the leading diagnosis across all deductible levels. At the $200,000 deductible level, neoplasm claim severity rose 12% from the average of prior years, while frequency climbed nearly 30%. Across all conditions, the frequency of members exceeding $200,000 in annual claims per 10,000 employees increased by nearly 20% year on year, driven primarily by neoplasms, birth-related claims and circulatory diseases. Birth-related claim frequency more than doubled between 2024 and 2025.
The findings land at a moment of broad pressure on employer health plans. According to the Business Group on Health's 2026 Employer Health Care Strategy Survey, cancer is the top condition driving health care costs for the fourth consecutive year, with employers predicting a median health care cost trend of 9% for 2026. Pharmacy costs are projected to increase 11% to 12% annually through 2026, driven by specialty drugs and new therapies, with employers already reporting that between 24% and 27% of total health plan spending goes to prescription drugs, according to the same survey.
Tara Krauss, president of Accident and Health at QBE North America, said: "High-cost claims are no longer outliers. They are becoming a routine part of the healthcare landscape and must be proactively anticipated and managed. Longer inpatient hospital stays, prolonged care due to advanced treatment options and the widespread adoption of specialty pharmaceuticals are all driving up costs and fundamentally altering the risk profile of employer-sponsored health plans."
The findings have direct implications for a stop-loss market already under significant strain. The US stop-loss market was valued at $26.9 billion in 2024, according to Allied Market Research, and Nationwide's January 2025 agreement to acquire Allstate's employer stop-loss segment for $1.25 billion underscored both the scale of consolidation and the depth of capital interest in the space.
QBE's own full-year 2025 results flagged increased claim severity in its North America Accident and Health segment due to rising treatment costs and demand for new drugs, necessitating rate increases of over 20%. The broader market is experiencing similar pressure. Segal's 2025 national medical stop-loss dataset found average stop-loss premium increases of 9.7% for plans maintaining comparable coverage levels, with high-cost claimants carrying $250,000 or more in annual paid claims accounting for less than 1% of covered individuals but 15% of total medical and prescription drug expenses.
Survey data from Aegis Risk found that claims in excess of $1 million are now reported by 49% of self-funded plan sponsors, up from 23% in 2024, with several major stop-loss writers including Cigna, Voya and Sun Life experiencing difficult claims in the fourth quarter of 2024 due to more advanced cancer treatments, premature births and increased hospital revenue management. Aegis noted that $3 million claims are becoming the new benchmark of concern in the current environment, with one in six plan sponsors now reporting claims at that level.
The report comes as more employers shift to self-funded arrangements to gain greater control over plan costs and design. The KFF 2025 Employer Health Benefits Survey found that 37% of covered employees at companies with between 10 and 199 employees are now in a level-funded plan, and when combined with traditional self-funded plans, 51% of employees in that market segment are covered by a self-funded or level-funded arrangement.
That shift is expanding the universe of employers exposed to stop-loss risk precisely when claim volatility is rising. Stop-loss renewals are under increasing pressure as high-cost claimants concentrate in mid-market groups and specialty drug utilization expands, with analysts noting that employers who understand their data and clinical exposure months before renewal are better positioned to negotiate favorable terms.
For brokers and benefits advisors, the QBE data underscores expanding variability and reduced predictability in claim outcomes, with specialized populations including pediatric and transplant patients adding further complexity to already difficult risk profiles.
Krauss added: "Employers are facing a multitude of pressures, from rising medical costs to increases in claim severity, which makes prevention, early intervention and proactive cost management more critical than ever."
