2026 MARKET TRENDS

Healthcare

Managed Care and Accident & Health Reinsurance

Key Takeaways

The managed care and reinsurance market stands firmly in hard territory
Due to rising claim costs, significant rate increases up to 40% for all managed care and health reinsurance coverage is anticipated

The growing pipeline for high-cost gene and cell therapies will continue to increase insurance and reinsurance costs, potentially leading to the exclusion of certain members or drugs from coverage.

Overview

This space has experienced a surge in high-cost claims affecting all populations, including commercial, ACA, Medicare and Medicaid. Historically shielded populations are now experiencing claims exceeding $1 million. The growing pipeline for high-cost gene and cell therapies will continue to increase insurance and reinsurance costs, potentially leading to the exclusion of certain members or drugs from coverage. As a result, loss ratios are increasing, and underwriters are becoming more conservative.

The political environment has created uncertainty for all government populations, including Medicaid, ACA and Medicare Advantage. All plans with exposure to one or more of these populations will experience shifts in enrollment, reductions in funding and increased volatility profiles, further compounding market conditions.

Market Conditions

The accident and health market has shifted rapidly and severely in the second half of 2025 and is now in a hard market. Shortly after January 1, two of the largest reinsurers in the market announced plans to exit. While there continues to be ample capacity, markets are seeking significant rate increases and becoming more restrictive with terms and conditions. Additionally, markets continue to use disclosure and lasers aggressively to limit their exposures.

Trends impacting the insurance and reinsurance market include:

Unprecedented increase in frequency of catastrophic claims

Most markets are reporting a 20-30% year-over-year increase in claims over $1 million. Over four years, the reported increases in this category are consistently over 50%.

The pipeline for cell therapies, gene therapies, and other extremely high-cost specialty drugs continues to grow

Within the next three years, there will likely be approvals for therapies targeting higher prevalence diseases which will drive more utilization. Regardless of category, the use of these high-cost drugs translates to increased insurance and reinsurance costs and the potential for the exclusion of members and drugs.

Impacts & Considerations

Hard market trends in the insurance and reinsurance space show no sign of abating anytime soon. Double-digit rate increases are pressuring budgets. Lasers and exclusions can leave organizations exposed to high costs beyond the rate increase itself. While rate increases can be difficult to navigate, it is important to weigh expected recoveries against the rate (net cost). Given the catastrophic claim trends, it is possible recoveries will outpace rate increases.

Organizations are encouraged to choose a stable and reliable reinsurance partner that can provide a long-term relationship. While it can be tempting to focus only on price during a hard market, collaborating with a predictable market should help offer sustainable solutions.

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