Health Insurers Ceded $203 Billion in 2025, and the 90.3% Loss Ratio Reads Net

AM Best counted $203 billion of ceded US health insurance premium in 2025 against $59 billion in 2016. Its September 8 market segment report calls that growth of more than 300%; the two endpoints divide to 3.44, so 2025 cessions run at 3.4 times the 2016 level, an increase of 244%. Stop-loss and excess-loss cessions inside that total reached $19.6 billion, up 50% in a single year.

The 1,156 insurers that filed the NAIC health blank for 2025 posted an aggregate loss ratio of 90.3% and a combined ratio of 100.6%, both struck on net earned premium, on a book that wrote $1.37 trillion of direct premium. Reinsurance recoveries have already come through the claims line by the time either ratio is computed, so statutory reporting shows almost none of the $203 billion on its face.

Key Takeaways

$203 billion of US health premium was ceded in 2025 against $59 billion in 2016, per AM Best's September 8 market segment report. The endpoints divide to 3.4 times the 2016 level, an increase of 244%.
$19.6 billion of that was stop-loss and excess loss, up 50% year over year and roughly 9.7% of all ceded health premium. Backing the increase out puts the 2024 base near $13 billion.
90.3% was the 2025 aggregate loss ratio across 1,156 NAIC health-blank filers, computed on a claims subtotal reported including net reinsurance recoveries. The combined ratio reached 100.6%, the net underwriting loss $8.1 billion.
47% of cessions went to unaffiliated companies, the highest share in a decade and roughly $95 billion at that percentage, growing at more than double the affiliated rate.
2031 is the earliest the American Academy of Actuaries' proposed managed care credit changes could reach the RBC formula, after five years of Exhibit 7 reporting gross and net of reinsurance and only if the data satisfies the Work Group.

What Is Inside the $203 Billion

Comprehensive major medical was the largest ceded line in 2025 at $38 billion, Medicare Advantage close behind. Stop-loss and excess-loss cessions came to $19.6 billion, a 50% increase over 2024 and roughly 9.7% of the $203 billion total. Back the 50% out and stop-loss cessions ran near $13 billion a year earlier. AM Best puts annual growth in double digits in three of the past five years, with increases of 30% or more in both 2024 and 2025.

Unaffiliated companies took 47% of ceded premium in 2025, the highest share in a decade and roughly $95 billion at that percentage, and year-over-year growth in unaffiliated cessions ran at more than double the affiliated rate. Captives went the opposite way, falling to $5 billion from $11 billion in 2024 after years of an upward trend. AM Best states that drop as 56%; its own rounded endpoints give 54.5%.

NAIC health-blank filers reported $1.37 trillion of direct written premium for 2025, up 15.2% or $181 billion, across 1,156 companies. Setting $203 billion against that gives roughly 15%, and against the $223.9 billion of health-blank capital and surplus excluding affiliated amounts it gives roughly 91%. Neither ratio is clean: AM Best does not publish which annual statement blanks its ceded universe spans or whether the premium is written or earned, so the two sides of each ratio may cover different filers.

Statutory or RBC line	Stated	What it drives
Analysis of Operations, Line 17 claims subtotal	Net of reinsurance	The 90.3% aggregate loss ratio and the 100.6% combined ratio
H2 Underwriting Risk Revenue	Net of reinsurance	Tiered at 0.1493 to $25M, 0.0893 above
H2 Underwriting Risk Incurred Claims	Net of reinsurance	The claims side of the same H2 ratio
Maximum Per-Individual Risk after Reinsurance	Reads treaty terms	Alternate risk charge; proposed for deletion
Exhibit 7 Part 1	Gross of reinsurance	The managed care credit at 15%, 60% and 75%

Line references from the NAIC health annual statement and the American Academy of Actuaries April 2025 H2 report.

Where the H2 Base Sits Relative to a Cession

Line 17 of the statutory Analysis of Operations page, the claims subtotal that drives the reported loss ratio, is stated including net reinsurance recoveries. So the 2025 aggregate loss ratio of 90.3%, the 100.6% combined ratio and the $8.1 billion net underwriting loss all sit downstream of the $203 billion. Same for the $372 premium PMPM against $337 claims PMPM, a $35 margin against $38 in 2024. Investment income of $14.8 billion left net earnings at $6 billion and a 0.4% margin.

Health RBC reads the same way. In the H2 underwriting risk component, Underwriting Risk Revenue derives from the premium and government risk-revenue lines and Underwriting Risk Incurred Claims derives from Net Incurred Claims, with Net Premium Income drawn from Line 1 and claims from the Line 17 subtotal. A cession therefore shrinks the base the tiered factors apply to: 0.1493 on the first $25 million of comprehensive medical underwriting risk revenue, 0.0893 above it.

For comprehensive medical the alternate risk charge is the lesser of $1.5 million or twice Maximum Per-Individual Risk after Reinsurance, which the American Academy of Actuaries defines as the highest attachment point on any stop-loss reinsurance and which the same Work Group proposes to delete, leaving the alternate charge a flat dollar amount. Quota share moves ceded revenue and claims off the ceding insurer's books proportionally, per the Academy's own description; a stop-loss or excess-loss cession strips only the layer above the attachment point, which is where trend leverages hardest.

The NAIC's Accident and Health Policy Experience Report for data year 2024 puts countrywide Stop Loss and Excess Loss direct premiums earned at $39.9 billion against $34.2 billion of direct incurred claims, an 85.77% loss ratio as the exhibit reports it, covering 90.1 million lives. AM Best's $19.6 billion of cessions is a 2025 figure, the NAIC exhibit sits a year behind it and aggregates all statement types rather than the health blank alone, and AM Best publishes no affiliated split for stop-loss specifically. Setting the two against each other bounds how much of that direct layer moves on to a reinsurer; it does not measure it.

The Managed Care Credit Still Reads Gross

The largest offsetting credit inside H2 runs off a gross number: the managed care credit cuts underwriting risk in proportion to how much claim cost an insurer has pushed onto providers: 15% for contractual fee payments, 60% for capitated payments, 75% for non-contingent expenses and aggregate cost arrangements. Exhibit 7 Part 1, the schedule that feeds it, reports claims gross of reinsurance.

The Academy's April 2025 H2 report, from the Health Underwriting Risk Factors Analysis Work Group chaired by Derek Skoog, records what that has produced. Reinsurance contracts have grown markedly more complex over the years, and the Work Group observes some insurers tailoring reinsurance around the credit. Its proposed remedy is to collect the Exhibit 7 figures both gross and net of reinsurance. That report covers only Orange Blank filers, so coverage written on another blank sits outside the analysis.

The Work Group proposes revising Exhibit 7 Part 1 for the 2025 financial statement and collecting five years of insurer reporting on it. If that data satisfies the group, the analysis runs in 2030 and the changes to XR018 are finalized for the 2031 RBC, on a five-year review cycle thereafter. A separate Academy Stop-Loss Work Group is developing an update to the NAIC's medical stop-loss RBC factors.

AM Best's Jennifer Asamoah tied the surge to insurers seeking reinsurance to "manage large claims exposure and improve capital efficiency." That $203 billion is priced, booked and relieving capital today. The exhibit that would show a regulator how far insurers have tailored reinsurance around a credit computed gross, the impact the Work Group says it cannot currently measure, would not produce its first factor before the 2031 RBC, and only if five years of data satisfy the group.

Health Insurers Ceded $203 Billion in 2025, and the 90.3% Loss Ratio Reads Net

Key Takeaways

What Is Inside the $203 Billion

Where the H2 Base Sits Relative to a Cession

The Managed Care Credit Still Reads Gross

Further Reading

Sources