Accident and Health Reinsurance

by Diana Hilmer *

Thomas G. Brown **

     Accident and health (A&H) reinsurance is a relatively young market that has grown to meet demands for increased capacity in A&H insurance covers and expanded product offerings from insurers. This chapter discusses the underlying health care market, its origins and the self-insured organizations which serve it, as well as the A&H primary insurance market in the U.S., before exploring the reinsurance market.


     At the end of 1993, annual health care spending in the U.S. reached $884.2 billion. Approximately 40% of that amount represented government-subsidized benefits. Private health insurance offered through commercial insurers, Blue Cross-Blue Shield hospital-surgical plans, health maintenance organizations, and self-funded employer groups covered more than 187,000,000 persons under age 65 (from a population of 260,000,000).1 By the end of this decade, the Health Care Financing Administration of the federal government (HCFA) estimates that national health care expenditures will be $1,616 trillion, approximately 16.4% of the gross national product (GNP).

     Commercial Insurers. Major types of A&H insurance in the private market include disability income replacement (short-term, long-term, and professional office overhead expense), accidental death and dismemberment insurance, hospitalization insurance, major medical expense insurance, and other ancillary coverages which have evolved . . .

* CLU, Second Vice President and Director, National Executive Accounts, LINCOLN NATIONAL REINSURANCE COMPANIES, One Reinsurance Place, 1700 Magnavox Way, Fort Wayne IN 46801-2385. An autobiography follows the chapter.

** Chairman and Chief Executive Officer, DUNCANSON & HOLT GROUP, One Liberty Plaza, New York NY 10006. An autobiography follows the chapter.

The authors are grateful to three reviewers of the chapter's first draft: Ms. Patricia Saporito (of SAPORITO AND ASSOCIATES in New York), Dr. Jerry S. Rosenbloom (of the Wharton School at the UNIVERSITY OF PENNSYLVANIA in Philadelphia), and Ms. Renate Nellich (of THE MERCANTILE AND GENERAL REINSURANCE COMPANY OF CANADA in Toronto). Special gratitude is extended to Ms. Nellich and her associates for contributing also to subsequent drafts.

1 Source Book of Health Insurance Data, (Washington, D.C.: HIAA) 1996, pp. 4-30.

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