Health Insurance – The Underwriting Cycle

December 14th, 2021

Health care cost trends are not the only factor influencing the change in health insurance premiums. Competition, legislation, regulation, and difficulty in predicting future costs are all contributors to the phenomenon called the Underwriting Cycle – a repeating pattern of gains and losses within the insurance industry. As the cycle plays out, expected trends and the associated premium increases tend to go above or below the actual rate of change in underlying health care costs.

This article discusses the underwriting cycle of health insurance plans in general terms and describes changes and adjustments that health plans typically exhibit as the cycle progresses.