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Verily Eyes Employer Stop-Loss Market

August 25, 2020

Verily, an Alphabet company, introduced a new subsidiary, Coefficient Insurance Company, that will be backed by Swiss Re Corporate Solutions, the commercial insurance unit of the Swiss Re Group. Coefficient will combine innovative health technology solutions with novel insurance and payment models. Its precision risk solution helps self-funded employers to control cost volatility through a data-driven model that is unique in the traditional employer stop-loss market. Employer stop-loss is a segment of commercial insurance that protects self-funded employers from unexpected and large employee health benefit claims by reimbursing employers for claims above a defined amount.

Coefficient will leverage Verily’s core strengths integrating hardware, software and data science and will also leverage Swiss Re Corporate Solutions’s risk knowledge, distribution capabilities and reputation in the employer stop-loss market.

Coefficient’s precision risk solution is designed to provide self-funded employers with more predictable benefit plan protection. It uses an analytics-based underwriting engine to identify unexpected areas of cost volatility, and cover those exposures with more dynamic and precise insurance policy provisions. Over time, Coefficient plans to integrate Verily’s suite of health devices and tech-driven interventions for workers and dependents into its precision risk solution to improve health outcomes and control cost.

“Employers have been facing rising and increasingly unpredictable healthcare costs for years,” said Andy Conrad, CEO, Verily. “Coefficient is aimed at reducing blind spots and providing greater cost control mechanisms for self-funded employers, and we expect that partnering with Swiss Re Corporate Solutions will help us to better develop and distribute our precision risk solution to the employer stop-loss market. Over time, we look forward to integrating Coefficient with Verily’s employer health solutions, including mobile health devices and innovative care management programs, in order to align payment models with better health outcomes.”

"Swiss Re Corporate Solutions has long prided itself for being a knowledge-based and data-driven insurer. Today, we're building on that strong foundation by partnering with Alphabet's Verily to use advanced technology and data analytics to innovate risk management in the employer stop-loss space," stated Andreas Berger, CEO, Swiss Re Corporate Solutions. "We look forward to working with Coefficient in delivering on our mission to address industry inefficiencies, provide an outstanding customer experience and advance corporate insurance together.”

Swiss Re Corporate Solutions has agreed to make a minority investment in Coefficient, subject to the satisfaction of certain closing conditions including regulatory approvals. In connection with this investment, Ivan Gonzalez, CEO North America, Swiss Re Corporate Solutions, is expected to join the Coefficient Board of Directors upon closing.

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