Written by Bruce Dunham, Director of Underwriting at Roundstone.<\/em><\/p>\n<\/p><\/div>\n Quick Answer: Roundstone underwrites all group captive health plans in house as a managing general underwriter. That means employers and advisors get full visibility into how rates are set, direct access to the underwriting team, and a renewal process that starts months before the numbers arrive.<\/p>\n When renewal season arrives in a fully insured plan, it usually goes like this: A number shows up. Nobody explains it. You pay it or you shop. Either way, you start over next year with the same visibility you had before, which is none.<\/p>\n That’s how the model works.<\/p>\n Fully insured carriers set rates, process claims, and control the data. By the time the renewal lands on your desk, the decisions are already made. You have no window into what drove the number and no real leverage to push back.<\/p>\n Self-funded health insurance through a group captive works differently. The data belongs to you, and the underwriting process is visible. When Roundstone does the underwriting in house, the renewal conversation starts months before the number arrives.<\/p>\n Learn how Roundstone’s in-house underwriting process works, what underwriters look at, how renewals get priced and delivered, and what employers and advisors should expect at every step.<\/p>\n<\/p><\/div>\n Every health plan starts with a pricing problem: How much will this group cost over the next 12 months? The underwriter’s job is to answer that question accurately enough to set a premium that covers the group’s expected exposure without pricing them out of the captive.<\/p>\n Two companies with the same number of employees can have very different risk profiles depending on the age of their workforce, the industry they’re in, where they’re located, and the health history of their people. Underwriting accounts for all of it.<\/p>\n In a fully insured plan, that analysis happens behind closed doors. The carrier runs the numbers and delivers a final figure. You see the outcome, but the work stays hidden.<\/p>\n In a self-funded captive, you see the formula.<\/p>\n<\/p><\/div>\n “We don’t look in the rearview mirror. We’re looking out the windshield.”\u00a0<\/p>\n<\/p><\/div>\n<\/p><\/div>\n Most group captives outsource underwriting to carrier partners. Roundstone keeps it in house. As the only group captive that also serves as its own managing general underwriter (MGU), every underwriting decision happens under the same roof as the claims and third-party administrator (TPA) operations run by Bywater.<\/p>\n When a large claim comes in during active underwriting, the claims team knows immediately, and that information reaches the underwriting team the same day. There’s no lag or handoffs between organizations. Your history stays in one system, visible to the people pricing your plan.<\/p>\n That integration shows up at every stage of the plan year.<\/p>\n Fully Insured vs. Self-Funded Group Captive: How the Models Compare<\/strong><\/p>\n<\/p><\/div>\n Underwriting<\/strong><\/p>\n<\/p><\/div>\n<\/div>\n<\/td>\n Claims data<\/strong><\/p>\n<\/p><\/div>\n<\/div>\n<\/td>\n Account management<\/strong><\/p>\n<\/p><\/div>\n<\/div>\n<\/td>\n Cost containment<\/strong><\/p>\n<\/p><\/div>\n<\/div>\n<\/td>\n Renewal<\/strong><\/p>\n<\/p><\/div>\n<\/div>\n<\/td>\n Employer recourse<\/strong><\/p>\n<\/p><\/div>\n<\/div>\n<\/td>\n For employers and advisors, that means the underwriting team is reachable. At Roundstone, it’s a team you can get on the phone with. Renewals also move faster when underwriting, claims, account management, and cost containment all operate from shared data and shared systems.<\/p>\n In a self-funded plan, stop-loss insurance is the protection that caps your exposure when claims run high. Your stop-loss premium is what gets underwritten, and it’s built from a specific set of variables.<\/p>\n Roundstone structures total premium into three buckets. The first covers fixed costs: stop-loss premiums, TPA fees, and administrative expenses. These are known quantities that hold for the plan year and represent about 15% of total premium. The remaining 85% is variable, split between pool premium and collateral (25%) and your employer claims account (60%).<\/p>\n<\/p><\/div>\n The fixed bucket is straightforward to price. The variable buckets are where the underwriting work happens.<\/p>\n Pool premium is priced on your group’s contribution to overall captive exposure. The claims account\u2014the largest bucket at 60%\u2014is the underwriter’s forward-looking estimate of what your group will actually spend on claims over the plan year. Accuracy matters here.<\/p>\n Underwriters look at a specific set of variables to build that estimate, as shown in the table below.<\/p>\n What goes into Stop-Loss Pricing: Group Health Plan Underwriting Factors<\/strong><\/p>\n<\/p><\/div>\n Aggregate per-employee-per-month (PEPM) trends get close attention. If a group’s costs are rising in a particular area, like specialty drugs, musculoskeletal care, or mental health, that pattern informs the rate.<\/p>\n Active cost containment programs also factor in. If your group has strategies like pharmacy management, direct primary care, or chronic disease programs in place, the underwriter can price the claims account more aggressively because the risk profile is lower. <\/p>\n For smaller groups with limited claims history, Roundstone uses AI modeling to fill credibility gaps, drawing on broader population data to produce a rate that reflects realistic expected costs.<\/p>\n That’s the model working as designed. When claims run lower than projected, unused premiums return to the employer at year end. It’s why Roundstone has returned $91.8 million to its members since 2005.<\/p>\n<\/p><\/div>\n Before Roundstone finalizes its renewal number, the underwriting team reviews the incumbent carrier’s renewal in a process called shadow pricing.<\/p>\n The purpose is context. Roundstone builds its number from its own analysis. Shadow pricing adds a layer of understanding about what the existing carrier is signaling about the group\u2019s risk profile.<\/p>\n A large increase from a previous carrier provides real information. If a fully insured carrier is raising a group\u2019s premium by 40% or 60%, the carrier has looked at the claims data and concluded the group is more expensive than the rate it was paying could support.<\/p>\n Roundstone\u2019s analysis may confirm the carrier\u2019s read, or it might reach a different conclusion.<\/p>\n<\/p><\/div>\n Roundstone begins the pre-renewal process four to six months before a plan year ends. The underwriting team starts pulling claims performance, cost trends, and any developing large claims, and the account management conversation starts at the same time.<\/p>\n The renewal itself is delivered 90 to 120 days before the plan year starts, with a full account of every factor that moved the rate. Employers and advisors walk into the renewal conversation already holding the context.<\/p>\n The question employers ask most often at renewal: “We had a clean year. Why did our premium increase?”<\/p>\n Medical and pharmacy costs rise across the market every year, independent of your group’s claims experience. That trend, currently running at 7% to 8%, shows up in your renewal whether your employees had a good claim year or not.<\/p>\n Pool dynamics matter, too. In a group captive, individual risk is spread across member companies, and a year with significant shared claims affects the pool rate. This shared risk keeps any one employer from having to shoulder a catastrophic plan year on their own.<\/p>\n<\/p><\/div>\n When an employer joins Roundstone’s captive, collateral is collected at entry. It’s held as security against potential claim obligations, a standard requirement in any self-funded structure.<\/p>\n At Roundstone, that collateral is interest-bearing, collected once on entry to the captive, and returned when the employer exits.<\/p>\n Some competing captive structures collect additional collateral at each new captive close, so obligations stack year over year. An employer in that model might carry $28,000 at year one and $86,000 or more by year five.<\/p>\n In Roundstone’s model, that capital stays accessible to the business. Long-term members rarely face a second collateral call.<\/p>\n<\/p><\/div>\n Underwriting shouldn’t be a black box, and at Roundstone, it isn’t.<\/p>\n When underwriting, claims, and account management operate as one system, the renewal is the output of a process you’ve been part of all year.<\/p>\n Find out what your group’s numbers look like before the next renewal season hits you with another unexplained premium increase.<\/p>\nWhat an Underwriter Does<\/h2>\n<\/p><\/div>\n
Why In-House Underwriting Is Different<\/h2>\n<\/p><\/div>\n
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\n \n\t\t\t\t\t\t\t\t\t\t\t\t\t\tStage<\/span><\/th>\n \n\t\t\t\t\t\t\t\t\t\t\t\t\t\tFully Insured Model<\/span><\/th>\n \n\t\t\t\t\t\t\t\t\t\t\t\t\t\tRoundstone Captive<\/span><\/th>\n<\/tr>\n<\/thead>\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n ![\"\"](\"https:\/\/roundstoneinsurance.com\/wp-content\/uploads\/2026\/06\/Insurance-cost-distribution-15-fixed-25-variable-for-pool-60-variable-for-claims.webp\")
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\n \n\t\t\t\t\t\t\t\t\t\t\t\t\t\tFactor<\/span><\/th>\n \n\t\t\t\t\t\t\t\t\t\t\t\t\t\tWhat It Signals to Underwriters<\/span><\/th>\n<\/tr>\n<\/thead>\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n What Is Shadow Pricing?<\/h2>\n<\/p><\/div>\n
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\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\nThe Renewal Timeline: What To Expect and When<\/h2>\n<\/p><\/div>\n
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\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\nHow Collateral Works and Why It Matters<\/h2>\n<\/p><\/div>\n
Know Your Numbers Before Your Renewal Arrives<\/h2>\n<\/p><\/div>\n