Payers, Health Tech

Verily launches stop-loss health insurance subsidiary

Alphabet’s healthcare subsidiary, Verily, will partner with Swiss Re Corporate Solutions to create a new stop-loss insurance company. The new entity, called Coefficient, will use data analytics to help self-funded companies manage unexpected areas of cost.


Alphabet’s health insurance subsidiary, Verily, is entering the stop-loss insurance business. Verily formed a new subsidiary, Coefficient Insurance Company, backed by Swiss Re Group’s commercial insurance unit.

For self-insured companies, stop-loss insurance is used to provide protection against large or catastrophic claims. As more businesses choose to self-insure, some of them turn to stop-loss insurance to minimize their risk.

Swiss Re Corporate Solutions will make a minority investment in Coefficient, subject to regulatory approval. Ivan Gonzalez, CEO of Swiss Re Corporate Solutions’ North America business, will join the company’s board.

Swiss Re will bring its experience with managing risk to the partnership, while Verily will bring its experience in data analytics. The idea is to use analytics-based underwriting to identify unexpected costs and cover them using insurance policy provisions.

For example, high cost treatments or specialty medications might be two typical sources of cost volatility, but Coefficient can pinpoint what areas are driving the most unpredictable cost volatility for company by analyzing an employer’s spend, a Verily spokeswoman wrote in an email.

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A Deep-dive Into Specialty Pharma

A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.

Coefficient will partner with brokerage firms that serve self-funded employers to roll out the new insurance offering.

“Employers have been facing rising and increasingly unpredictable healthcare costs for years,” Verily CEO Andy Conrad said in a news release. “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”

In the future, the plan is to work in Verily’s other technology services, such as mobile health devices and care management programs. For instance, Verily has partnered with Sanofi to create a virtual care program for type 2 diabetes. The company has also rolled out an app-based service that companies can use to screen employees for Covid-19.

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