Actuarial terms, explained with real numbers

Definitions, worked examples, and short videos for brokers, HR, and finance leads who make decisions from actuarial reports.

Browse the glossary Check your renewal →

Example · Benefits brokerRenewal checkProposed renewal+14.0%Trend explains+8% to +11%Worth a question

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Most people arrive with a decision to make, not a term to look up.

RenewalWhy is our renewal going up?Every increase is several pieces stacked together. See which ones hit your group, and what to ask.Read the answer →PremiumOur claims went down. Why did our premium go up?Six reasons a better year can still bring a higher renewal, with the numbers worked out.Read the answer →Before you signWhat should we ask before we sign the renewal?Seven questions that show what is driving the number, what is negotiable, and what a useful answer sounds like.Read the answer →

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Term of the week

Formulary

A plan's list of covered drugs, sorted into tiers. The tier, not the drug, often sets what members pay, and placement can reflect rebates as well as clinical review.

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Tier 2 copay$36

Tier 3 copay$66

Extra over 12 fills+$360

Hypothetical, using KFF 2026 average copays.

Explainers in under two minutes

1:48 · Pharmacy RebatesThe bill comes now. The rebate comes later.

1:39 · FormularySame drug. Different tier.

1:27 · Specialty DrugsAbout two in 100 prescriptions. More than half the pharmacy bill.

1:40 · PBM (Pharmacy Benefit Manager)Three ways your PBM can get paid. What does yours keep?

1:38 · Risk AdjustmentSame $600 bill. Opposite stories.

1:27 · Value-Based CarePaid for results. Who keeps the savings?

1:31 · Actuarially SoundTwo quotes. Only one holds up.

1:34 · Self-Funded PlanYou pay the claims. You keep the savings.

1:32 · Fully Insured PlanOne price. The insurer takes the risk.

1:23 · Level-Funded PlanSame bill every month. What happens at year-end?

1:28 · Leveraged TrendSame plan, bigger increase

1:24 · PMPM (Per Member Per Month)Claims went up 10%. Cost per person went down.

1:19 · RenewalYour renewal is +14%. Only part of it is trend.

1:24 · Medical Loss RatioWhy a 90% group still got a rebate

1:09 · CredibilityHow much does your own data count?

1:14 · Experience RatingHow your renewal is built, in six steps

1:19 · IBNRWhy December always looks cheap

1:25 · Stop-Loss InsuranceTwo safety nets: specific vs. aggregate

1:23 · Loss RatioYour loss ratio is 76%. Or is it 90%?

1:13 · Medical TrendWhy trend runs 18 months, not 12

Browse the glossary

Every term has a worked example and the questions to ask your carrier.

Renewal drivers7

Renewal Medical Trend Experience Rating Credibility Loss Ratio Medical Loss Ratio Leveraged Trend

Funding options4

Fully Insured Plan Level-Funded Plan Self-Funded Plan Actuarially Sound

Stop-loss1

Stop-Loss Insurance

Specific Stop-LossSoon

Aggregate Stop-LossSoon

Attachment PointSoon

Claims and measures2

IBNR PMPM (Per Member Per Month)

Cost and care models2

Value-Based Care Risk Adjustment

Pharmacy costs4

PBM (Pharmacy Benefit Manager)Pharmacy Rebates Specialty Drugs Formulary

Spread PricingSoon

Understanding the numbers is the first step.
Knowing what to do with them is next.

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