Loss ratio tells you what happened, not why.

Loss ratio, claims paid divided by total premium earned, is one indicator of employee value. But that metric only tells part of the story. When employees don't use their coverage, the value of the benefit declines regardless of the premium being paid.

Appropriate loss ratios vary by product, case size and plan design, which is why a single benchmark is less useful to consultants than understanding what's driving a given plan's experience. If a plan’s loss ratio is below the expected target there are several possible causes: favorable claims experience, plan design, expense structure or eligible claims that were never filed. Consultants need the context behind the number before deciding whether a plan is underperforming, appropriately priced or ready for enhancement.

The levers that drive value

The factors that influence utilization and loss ratio are more complex than the calculation itself.

For Securian Financial, the most important levers include, Medical Claims Integration, product design and employee communication. Together, these capabilities help close the gap between enrolling in a benefit and receiving value from it.

Employees are more likely to use a benefit when claims are simple, support is readily available and payments arrive quickly. Every point of friction creates another reason not to file a valid claim. That’s why capabilities like instant decisioning, speed of payment and claims support contribute to employee engagement and value.

Medical Claims Integration also helps make the benefit more visible. It uses medical claims data to identify potential supplemental health claims and notifies employees when they may be eligible for benefits. For one Securian client, a global leader in consulting and engineering with 35,000 employees, more than 68% of all claims submitted in 2025 were initiated through medical claims integration. And in that same year more than 1,100 qualifying claims were identified that had not yet been submitted.²

Communication is the final link. Even the most comprehensive supplemental health coverage can only deliver value when employees understand what is available and how to access it when eligible events occur. Securian’s Affordability Trap research found that only 30% of employees were enrolled in supplemental health coverage through their employer, and another 11% were not sure if they were enrolled. Among those who used supplemental coverage, 67% found it helpful. The challenge is making sure employees know and understand how to use their benefits.³

The affordability question

Because rate adjustments have not always been a regular renewal conversation for voluntary benefits, consultants and employers may continue to gravitate toward the lowest-cost or cost-neutral option when selecting a supplemental health carrier.

At first glance, that approach makes sense. A lower rate can be appropriate when it reflects the plan design and expected claims activity. But if the lower cost comes from low awareness, limited use or friction that keeps employees from completing valid claims, the plan may not be delivering on the employer’s goals. Price still matters. But it should be considered alongside utilization and claims experience to determine if employees are receiving value from the coverage.

That is especially important in the current environment. Voluntary benefits are receiving more scrutiny, and recent industry commentary has pointed to the importance of prudent product selection, monitoring and clear evidence of employee value.⁴

Before asking for enhancements, understand the experience

Consultants should understand a plan’s historical performance from a loss ratio perspective before deciding whether plan enhancements are justified. If a plan is already running above target, adding benefits without addressing pricing can make the plan less stable over time.

Carriers who share plan experience data can help paint that picture. Securian proactively shares utilization reporting on a quarterly basis, in addition to detailed claims and premium data. This data enables the employer and their consultant to identify trends and evaluate plan performance.