Blood cancer claim costs per employee climbed more than 70% in 2025, and neoplasms held their position as the leading driver of stop-loss reimbursements at 36% (QBE North America 2026 Accident & Health Market Report, via Risk & Insurance, June 2026). That severity concentration, not the more widely cited jump in claim frequency, is what is now forcing stop-loss carriers to reconsider how they reserve for a layer where a handful of oncology and cell-therapy claims can outrun a year of loss picks.
QBE North America President of Accident and Health Tara Krauss framed the shift bluntly: "High-cost claims are no longer outliers. They are becoming a routine part of the healthcare landscape" and must be "proactively anticipated and managed" (Tara Krauss, via Insurance Business Magazine, 2026). The report's headline frequency statistic, that 49% of self-funded plan sponsors now report at least one claim exceeding $1 million, up from 23% a year earlier, has already circulated widely across employee-benefits trade press this year. What has drawn less attention is what is inside that excess layer once a plan crosses the million-dollar line: a severity mix so concentrated in a handful of high-cost diagnoses and therapies that the frequency statistic alone understates how the underlying claim distribution has actually moved.
The Frequency Headline Everyone Already Knows
The context is worth stating once, briefly, because it sets the scale of what follows. QBE's 2026 report found jumbo claim frequency rising across every severity threshold it tracks, from $500,000 through $2 million, between 2024 and 2025, a pattern the report described as a broad-based shift rather than isolated volatility (QBE North America, June 2026). One in six plan sponsors now report at least one $3 million claim, and high-cost claim frequency overall has nearly tripled over the past five years, with average severity in 2025 running 10% above the prior-year average (QBE North America, June 2026). Fewer than 1% of covered individuals, those with $250,000 or more in annual claims, now account for 15% of total medical and prescription drug spending across the self-funded market QBE tracks (QBE North America, via Insurance Business Magazine, 2026).
That is the backdrop. It is also, at this point, familiar ground: prior actuary.info coverage has already walked through the excess loss factor mechanics behind the 49%-versus-23% comparison and the specific-deductible pricing gap it implies (Stop-Loss at 12.7%: The Structural Break Behind the Premium; Stop-Loss Specific Trend Jumps 18% as Actuarial Surprises Mount). The more useful question this year is not whether the frequency shifted. It is what QBE's underlying diagnosis-level data says about where the severity is concentrated, because that concentration, not the frequency count, is what determines whether a carrier's reserve for the excess layer is adequate.
Where the Severity Concentrated: Blood Cancer's 70% Jump
Neoplasms have topped QBE's list of excess-claim drivers in every edition of the report published since 2023, in a band that has run from 31% to 36% of stop-loss reimbursements across the years studied, and the 2026 edition put the figure at 36% (QBE North America, June 2026). What changed this year is the composition inside that category. Blood cancers, including leukemia, lymphoma, and multiple myeloma, now account for more than half of all neoplasm claims at the $1 million individual specific deductible, and claim cost per employee per month for blood cancers rose more than 70% in 2025 alone (QBE North America, via Risk & Insurance, June 2026). Myeloid leukemia showed the steepest increase among blood cancer subtypes, and multiple myeloma cases carried potential annual costs ranging from $335,000 to $2.5 million, a spread wide enough that a single diagnosis code no longer predicts a narrow cost band the way it might have a decade ago (QBE North America, June 2026). The report's single highest claim to date exceeded $7 million, driven by oncology care that progressed from initial treatment to transplant and advanced cellular therapy (QBE North America, June 2026). That is not a hypothetical tail scenario in an actuarial model. It is a claim QBE has actually paid, and it illustrates why blood cancer specifically, rather than neoplasms as a broad category, is where the severity distribution has stretched furthest. A carrier pricing the $1 million specific deductible off an aggregate neoplasm frequency and severity assumption, without separating blood cancers from solid tumors, is blending a diagnosis group whose cost trajectory now diverges sharply from the rest of the category it sits inside.
Gene and Cell Therapy Add a Second Tail
Cancer is not the only driver stretching the excess layer. QBE's 2026 data shows a second, related tail forming around gene and cell therapies, several of which now carry single-claimant costs that rival or exceed the blood cancer cases driving the neoplasm category. One Elevidys claimant, the gene therapy approved for Duchenne muscular dystrophy, incurred approximately $3.4 million in paid claims, and Nexviazyme, an enzyme replacement therapy for Pompe disease, can run $2.1 million or more in annual cost for a single member (QBE North America, June 2026). Specialty pharmaceuticals more broadly ranged from $90,000 annually for Rinvoq to $395,000 for Opdivo, a spread that sits entirely inside what would once have been considered catastrophic-claim territory on its own, before a plan even reaches oncology or gene therapy (QBE North America, June 2026). Total U.S. pharmaceutical expenditures grew 12.7% in 2025 to $915.2 billion, and GLP-1 medications alone are projected to account for 0.5% to 1% of total medical cost trend in 2026, a smaller share than cancer and specialty biologics but one still large enough to compound the pressure on the same excess layer (QBE North America, June 2026).
Preterm births add a third, demographically distinct driver: birth-related claim frequency more than doubled between 2024 and 2025, and four of the top six pediatric claims QBE recorded in 2025 stemmed from extensive hospitalizations following birth, with third-party administrator payments on the costliest of those cases ranging from $10,600 to $5.6 million (QBE North America, June 2026). Circulatory disease, meanwhile, remains a steadier contributor at roughly 12% of claims across deductible levels, a frequency that has risen almost 60% since the pandemic but without the same severity concentration now visible in oncology and cell therapy (QBE North America, 2025 report baseline).
| Claim category | 2025/2026 figure | Source |
|---|---|---|
| Blood cancer claim cost per employee per month | Up more than 70% in 2025 | QBE North America, June 2026 |
| Highest recorded single claim to date | Exceeded $7 million (oncology to cellular therapy) | QBE North America, June 2026 |
| Multiple myeloma, potential annual cost | $335,000 to $2.5 million | QBE North America, June 2026 |
| Elevidys (Duchenne gene therapy), single claimant | Approximately $3.4 million | QBE North America, June 2026 |
| Nexviazyme (Pompe enzyme replacement), annual cost | Up to $2.1 million or more | QBE North America, June 2026 |
| Specialty pharmaceuticals, annual cost range | $90,000 (Rinvoq) to $395,000 (Opdivo) | QBE North America, June 2026 |
QBE Priced Ahead of the Market
QBE's own pricing response is the clearest signal that the carrier does not view this as a cyclical claims year. The company pushed its 2025 Accident and Health rate increases above 20%, a load well ahead of the broader market's average movement (QBE North America, via Insurance Business Magazine, 2026). Segal's national medical stop-loss dataset put the market-wide average premium increase at 9.7% in 2025 and reported it accelerating to nearly 13% in its Q3 2026 trends update, tracking claims data through its SHAPE health data warehouse and describing conditions once treated as rare shock losses as now recurring events (Segal, Q3 2026 Trends in Focus: Stop-Loss Insurance, July 2026). A carrier pricing at more than double the broader market's average increase is either repricing aggressively to catch up with a severity mix it already sees in its own paid claims, or is positioning to shed business it no longer wants to hold at prevailing rates. Given that QBE is the entity publishing the underlying severity data driving the rest of the market's rate actions, the first explanation is the more likely one.
Capital continues to flow into the line despite, or arguably because of, that repricing. The U.S. stop-loss market was valued at $26.9 billion in 2024, and Nationwide's acquisition of Allstate's employer stop-loss segment for $1.25 billion in January 2025 signaled that a major carrier viewed the line as a growth opportunity rather than a business to exit (QBE North America, via Insurance Business Magazine, 2026). That combination, rising severity, rate increases running well ahead of the broader market, and a major acquisition closing in the same window, describes a market repricing in real time rather than one in equilibrium. Carriers that priced the 2026 renewal off 2024 severity data, before the blood cancer and cell therapy figures QBE just published were visible, are likely to find their loss ratios running hot relative to plan by the second half of the policy year.
The Credibility Problem Underneath Lasering
The industry's standard response to a known high-cost claimant is lasering: carving that individual out of the standard specific deductible and either excluding the condition or setting an individually higher attachment point for the next policy year. Lasering works as a pricing tool only if a carrier can identify, in advance, which claimant is likely to become expensive. The research on that point is not encouraging. Ankit Nanda, a senior reinsurance actuary and Fellow of the Society of Actuaries who wrote on stop-loss credibility for the American Academy of Actuaries' journal, cited research finding that the odds of correctly predicting a high-cost claimant in a policy year based on past experience are no better than 50-50 (Ankit Nanda, MAAA, FSA, Contingencies, American Academy of Actuaries, January/February 2024). Nanda's broader point is a credibility argument familiar to any pricing actuary: "historical experience can only offer so much assistance in accurately projecting future costs," particularly for the small and midsized employer blocks that make up most of the self-funded stop-loss market, where claim volume is too thin to produce statistically reliable loss picks on its own. That credibility gap matters more, not less, as severity concentrates in specific diagnosis categories the way QBE's 2026 data shows. A specific stop-loss book covering an 800-life employer group at a $150,000 attachment point might generate on the order of $2 million to $2.5 million in annual specific premium. A single claim at QBE's reported $7 million ceiling, or even a multiple myeloma case at the upper end of the $335,000-to-$2.5-million range stacked against a handful of blood cancer claims elsewhere in the same block, can consume several years of that premium in one policy period. When a carrier cannot reliably predict which member will generate that claim, and Nanda's research suggests it functionally cannot, lasering becomes a lagging response rather than a pricing tool: it protects the carrier against a claimant already identified as high-cost, but it does nothing for the next claimant who has not yet presented, who is statistically just as likely to appear given a 50-50 predictive baseline. The practical effect is that lasering shifts realized risk back onto the plan sponsor for exactly the claimants who were already flagged, while the carrier remains exposed to the undiagnosed half of next year's severity, the population the coin-flip prediction problem cannot resolve in advance.
What a Fatter Tail Does to the Excess-Layer Loss Pick
For reserving actuaries, the practical consequence is a credibility problem that compounds rather than averages out. Medical stop-loss is a line where IBNR development on a handful of large claims can move a loss ratio more than an entire year of trend on the rest of the block, because the specific layer is, by construction, priced on the tail of the severity distribution rather than its body. A carrier can run a well-behaved frequency-severity model across a portfolio of hundreds of employer groups and still see individual blocks blow through their loss pick, because the diagnosis-level concentration QBE's report describes, blood cancer, gene therapy, and preterm complications clustering into the same small set of high-cost categories, means the underlying claims are not independent draws from a stable distribution. They are correlated with medical advances in specific treatment categories that can move faster than a carrier's annual severity study can absorb, as the jump from a 31%-to-36% neoplasm band to a 70% single-year rise in blood cancer cost per employee illustrates. That has a direct pricing and reserving consequence for how carriers should treat aggregate stop-loss and specific-deductible IBNR reserves this cycle. A reserve methodology anchored to a multi-year average severity trend will systematically understate the excess layer if the diagnosis mix inside that severity has shifted as sharply as QBE's blood cancer figure suggests, even if the aggregate frequency trend looks stable. The carriers most exposed are those still pricing specific deductibles off blended neoplasm assumptions rather than separating blood cancer, gene therapy, and solid-tumor severity into distinct loss development patterns, a granularity gap that this year's data suggests is no longer optional. Segal's acceleration from 9.7% to nearly 13% in a single year, against QBE's own 20%-plus rate action, is the market's own signal that the pricing gap Nanda's credibility framework predicts is already showing up in renewal negotiations, not just in actuarial memos.
Further Reading
- Stop-Loss at 12.7%: The Structural Break Behind the Premium: The excess loss factor mechanics behind the frequency shift this report builds on.
- Stop-Loss Specific Trend Jumps 18% as Actuarial Surprises Mount: How specific-deductible trend has diverged from aggregate cost trend in recent renewals.
- Cell and Gene Therapy Breaks Stop-Loss Pricing at the Catastrophic Layer: A closer look at how single-treatment gene therapy costs are reshaping catastrophic claim pricing.
- Stop-Loss Carriers Rewrite GLP-1 Rules at 2026 Renewal Season: How carriers are handling a separate but related specialty-drug cost driver at renewal.
- Cigna's 84.5% Medical Ratio Splits From the Medicare Advantage Trend Story: How the same catastrophic-claim pressure shows up differently across a carrier's commercial and Medicare Advantage books.
Sources
- Risk & Insurance: Cancer, Preterm Births, and Specialty Drugs Drive Record Severity in Self-Funded Health Plans (June 2026), reporting on QBE North America's 2026 Accident & Health Market Report.
- Insurance Business Magazine: Cancer Claims and Specialty Drugs Drive Stop-Loss Cost Surge, QBE Report Finds (2026).
- Risk & Insurance: Medical Stop Loss Claims Trends: Million-Dollar Cases Double as Cancer Remains Dominant.
- Segal: Q3 2026 Trends in Focus, Stop-Loss Insurance (July 2026).
- Ankit Nanda, MAAA, FSA, U.S. Health Employer Stop Loss: Considerations for New and Established Entrants, Contingencies, American Academy of Actuaries (January/February 2024).