Average Price Changes for Largest Clients

For reference, below are the proposals for gross and risk margin

EXECUTIVE SUMMARY

The top 10 carriers would see a slight (<.1%) in price compared to 2023 to present
In general, there is a tradeoff between a slightly lower risk margin and a higher gross margin to offset
SCI contracts for AXA and CNA would see increases (~2%)
The new pricing would result in fewer contracts eligible for risk cap (33.1% v 32.1% for top payers, 38.7% v 36.1% for others)
New pricing would have resulted in 8 fewer bookends out of 1,982 contracts included, with 2 additional windfalls

Data based in Active, Completed and Abrogated OP through June 2025

Below is the summary of total price showing that the new margin scheme is revenue neutral over the 2023-2025 period

Total Revenue Before and After
Diagnosis Type	Contract Price	New Contract Price	Count
ABI	481,607,611	481,607,611	328
Amputation	121,295,414	121,295,414	109
Burn Injury	190,992,770	190,992,770	104
Multiple Trauma	375,452,303	375,452,303	351
Other	3,898,335	3,898,335	4
SCI	347,294,343	347,474,350	160
Total	1,520,540,776	1,520,720,783	1,056

The charts below show the statistics on price changes for our largest clients had the changes been in effect for years 2023 to 2025. The 10th to 90th percentile are less than +-10% for most clients.

Average Price Changes
Primary Payer	Count	Mean	5th Percentile	10th Percentile	90th Percentile	95th Percentile
AIG Technical Third Party Oversight	52	-0.44%	-6.42%	0.00%	0.00%	0.00%
AXA XL	27	-0.66%	-2.92%	0.00%	0.00%	0.00%
Amerisure Mutual Insurance Company	29	0.00%	0.00%	0.00%	0.00%	0.00%
CNA	25	1.70%	-5.29%	0.00%	9.59%	12.39%
Chubb	134	-0.33%	-11.91%	0.00%	0.00%	0.66%
Clear Spring Property and Casualty Company	31	-0.83%	-5.29%	0.00%	0.00%	0.78%
Old Republic Risk Management	21	-0.75%	-5.98%	0.00%	0.00%	0.00%
Sentry Insurance	34	0.89%	-3.66%	-0.71%	0.00%	6.21%
Travelers	73	0.10%	-5.43%	0.00%	0.00%	0.65%
Zurich North America	227	-0.28%	-3.54%	0.00%	0.00%	0.00%

The following charts show the dispersion of price changes about the mean

This table shows the ranges by diagnosis, which indicates the largest potential impact in SCI cases. Only AXA and CNA see price increases

Average Price Changes by Diagnosis
Primary Payer	Diagnosis Type	Count	Mean	5th Percentile	10th Percentile	90th Percentile	95th Percentile
AIG Technical Third Party Oversight	ABI	20	0.00%	0.00%	0.00%	0.00%	0.00%
AIG Technical Third Party Oversight	Amputation	2	0.00%	0.00%	0.00%	0.00%	0.00%
AIG Technical Third Party Oversight	Burn Injury	8	0.00%	0.00%	0.00%	0.00%	0.00%
AIG Technical Third Party Oversight	Multiple Trauma	16	0.00%	0.00%	0.00%	0.00%	0.00%
AIG Technical Third Party Oversight	SCI	6	-4.70%	-13.14%	-11.90%	4.30%	4.66%
AXA XL	ABI	11	0.00%	0.00%	0.00%	0.00%	0.00%
AXA XL	Amputation	2	0.00%	0.00%	0.00%	0.00%	0.00%
AXA XL	Burn Injury	2	0.00%	0.00%	0.00%	0.00%	0.00%
AXA XL	Multiple Trauma	9	0.00%	0.00%	0.00%	0.00%	0.00%
AXA XL	SCI	3	-5.18%	-13.32%	-12.30%	1.54%	2.25%
Amerisure Mutual Insurance Company	ABI	8	0.00%	0.00%	0.00%	0.00%	0.00%
Amerisure Mutual Insurance Company	Amputation	3	0.00%	0.00%	0.00%	0.00%	0.00%
Amerisure Mutual Insurance Company	Burn Injury	3	0.00%	0.00%	0.00%	0.00%	0.00%
Amerisure Mutual Insurance Company	Multiple Trauma	15	0.00%	0.00%	0.00%	0.00%	0.00%
CNA	ABI	4	0.00%	0.00%	0.00%	0.00%	0.00%
CNA	Amputation	3	0.00%	0.00%	0.00%	0.00%	0.00%
CNA	Burn Injury	6	0.00%	0.00%	0.00%	0.00%	0.00%
CNA	Multiple Trauma	5	0.00%	0.00%	0.00%	0.00%	0.00%
CNA	SCI	7	5.05%	-7.31%	-7.01%	15.07%	16.93%
Chubb	ABI	43	0.00%	0.00%	0.00%	0.00%	0.00%
Chubb	Amputation	21	0.00%	0.00%	0.00%	0.00%	0.00%
Chubb	Burn Injury	13	0.00%	0.00%	0.00%	0.00%	0.00%
Chubb	Multiple Trauma	39	0.00%	0.00%	0.00%	0.00%	0.00%
Chubb	Other	1	0.00%	0.00%	0.00%	0.00%	0.00%
Chubb	SCI	17	-3.71%	-18.30%	-15.42%	12.29%	13.58%
Clear Spring Property and Casualty Company	ABI	8	0.00%	0.00%	0.00%	0.00%	0.00%
Clear Spring Property and Casualty Company	Burn Injury	1	0.00%	0.00%	0.00%	0.00%	0.00%
Clear Spring Property and Casualty Company	Multiple Trauma	15	0.00%	0.00%	0.00%	0.00%	0.00%
Clear Spring Property and Casualty Company	SCI	7	-3.36%	-15.04%	-12.37%	2.22%	2.71%
Old Republic Risk Management	ABI	9	0.00%	0.00%	0.00%	0.00%	0.00%
Old Republic Risk Management	Amputation	1	0.00%	0.00%	0.00%	0.00%	0.00%
Old Republic Risk Management	Burn Injury	3	0.00%	0.00%	0.00%	0.00%	0.00%
Old Republic Risk Management	Multiple Trauma	6	0.00%	0.00%	0.00%	0.00%	0.00%
Old Republic Risk Management	SCI	2	-6.01%	-6.04%	-6.04%	-5.99%	-5.99%
Sentry Insurance	ABI	8	0.00%	0.00%	0.00%	0.00%	0.00%
Sentry Insurance	Amputation	4	0.00%	0.00%	0.00%	0.00%	0.00%
Sentry Insurance	Burn Injury	2	0.00%	0.00%	0.00%	0.00%	0.00%
Sentry Insurance	Multiple Trauma	12	0.00%	0.00%	0.00%	0.00%	0.00%
Sentry Insurance	SCI	8	0.04%	-10.34%	-6.99%	8.78%	8.89%
Travelers	ABI	38	0.00%	0.00%	0.00%	0.00%	0.00%
Travelers	Amputation	2	0.00%	0.00%	0.00%	0.00%	0.00%
Travelers	Burn Injury	8	0.00%	0.00%	0.00%	0.00%	0.00%
Travelers	Multiple Trauma	14	0.00%	0.00%	0.00%	0.00%	0.00%
Travelers	SCI	11	-1.52%	-13.37%	-12.40%	12.00%	14.18%
Zurich North America	ABI	56	0.00%	0.00%	0.00%	0.00%	0.00%
Zurich North America	Amputation	29	0.00%	0.00%	0.00%	0.00%	0.00%
Zurich North America	Burn Injury	23	0.00%	0.00%	0.00%	0.00%	0.00%
Zurich North America	Multiple Trauma	93	0.00%	0.00%	0.00%	0.00%	0.00%
Zurich North America	Other	1	0.00%	0.00%	0.00%	0.00%	0.00%
Zurich North America	SCI	25	-1.71%	-15.64%	-12.14%	11.82%	12.92%

Now we show the average price changes for Zurich if we hold the gross margin constant and only change risk margin, and vice versa

Zurich Price Change due to Risk and Gross
Diagnosis Type	Count	Risk Change	Gross Change	Total Change
ABI	56	1.00000	1.0000	1.0000
Amputation	29	1.00000	1.0000	1.0000
Burn Injury	23	1.00000	1.0000	1.0000
Multiple Trauma	93	1.00000	1.0000	1.0000
Other	1	1.00000	1.0000	1.0000
SCI	25	0.95836	1.0265	0.9829

Top 10 Price Change due to Risk and Gross
Diagnosis Type	Count	Risk Change	Gross Change	Total Change
ABI	205	1.00000	1.0000	1.00000
Amputation	67	1.00000	1.0000	1.00000
Burn Injury	69	1.00000	1.0000	1.00000
Multiple Trauma	224	1.00000	1.0000	1.00000
Other	2	1.00000	1.0000	1.00000
SCI	86	0.97061	1.0266	0.99418

Below is the price change per year for Zurich

Zurich Effective Year Price Change due to Risk and Gross
Effective Year	Count	Risk Change	Gross Change	Total Change
2023	75	0.98878	1.0028	0.99119
2024	106	0.99802	1.0042	1.00211
2025	46	0.98984	1.0083	0.99727

And for the Top 10

Top 10 Effective Year Price Change due to Risk and Gross
Diagnosis Type	Count	Risk Change	Gross Change	Total Change
2023	250	0.98940	1.0050	0.99389
2024	273	0.99808	1.0042	1.00196
2025	130	0.99661	1.0077	1.00308

The increase of price for Zurich is due to the higher proportion of sub-500K contracts compared to the average. The second table shows an average increase for Zurich of almost 6% in gross margin for sub-500K contracts, with a new gross margin of 30%

Claim Budget Breakdown Top 10 Payers
Budget/Payer	Old Republic Risk Management	Clear Spring Property and Casualty Company	Amerisure Mutual Insurance Company	AXA XL	CNA	Sentry Insurance	AIG Technical Third Party Oversight	Travelers	Chubb	Zurich North America	Total
A- 0-500K	9 (17.3%)	10 (34.5%)	7 (25.9%)	50 (37.3%)	12 (38.7%)	1 (4.0%)	1 (4.8%)	8 (23.5%)	12 (16.4%)	90 (39.6%)	200 (30.6%)
B- 500-750	10 (19.2%)	8 (27.6%)	6 (22.2%)	24 (17.9%)	6 (19.4%)	2 (8.0%)	6 (28.6%)	7 (20.6%)	14 (19.2%)	43 (18.9%)	126 (19.3%)
C- 750-1M	11 (21.2%)	4 (13.8%)	3 (11.1%)	19 (14.2%)	5 (16.1%)	6 (24.0%)	6 (28.6%)	6 (17.6%)	9 (12.3%)	43 (18.9%)	112 (17.2%)
D- 1M-1.25M	7 (13.5%)	1 (3.4%)	3 (11.1%)	13 (9.7%)	4 (12.9%)	4 (16.0%)	0 (0.0%)	3 (8.8%)	7 (9.6%)	16 (7.0%)	58 (8.9%)
E- 1.25M-1.5M	5 (9.6%)	5 (17.2%)	2 (7.4%)	10 (7.5%)	3 (9.7%)	3 (12.0%)	3 (14.3%)	4 (11.8%)	10 (13.7%)	9 (4.0%)	54 (8.3%)
F- 1.5M-1.75M	4 (7.7%)	0 (0.0%)	2 (7.4%)	5 (3.7%)	0 (0.0%)	5 (20.0%)	1 (4.8%)	1 (2.9%)	11 (15.1%)	12 (5.3%)	41 (6.3%)
G- 1.75M-2M	1 (1.9%)	0 (0.0%)	1 (3.7%)	2 (1.5%)	0 (0.0%)	0 (0.0%)	1 (4.8%)	0 (0.0%)	4 (5.5%)	6 (2.6%)	15 (2.3%)
H- 2M-2.5M	2 (3.8%)	0 (0.0%)	1 (3.7%)	7 (5.2%)	1 (3.2%)	1 (4.0%)	3 (14.3%)	2 (5.9%)	2 (2.7%)	6 (2.6%)	25 (3.8%)
I- 2.5M-3M	1 (1.9%)	0 (0.0%)	1 (3.7%)	3 (2.2%)	0 (0.0%)	0 (0.0%)	0 (0.0%)	1 (2.9%)	2 (2.7%)	0 (0.0%)	8 (1.2%)
J- Over 3M	2 (3.8%)	1 (3.4%)	1 (3.7%)	1 (0.7%)	0 (0.0%)	3 (12.0%)	0 (0.0%)	2 (5.9%)	2 (2.7%)	2 (0.9%)	14 (2.1%)
Total	52 (100.0%)	29 (100.0%)	27 (100.0%)	134 (100.0%)	31 (100.0%)	25 (100.0%)	21 (100.0%)	34 (100.0%)	73 (100.0%)	227 (100.0%)	653 (100.0%)

The chart below indicates the possible need for a favored nations gross margin to remain in place.

Zurich Price Change by Claim Budget
Claim Budget	Count	Risk Change	Gross Change	Total Change	Current GM	New GM
A- 0-500K	90	0.99613	1.0024	0.99839	26.3%	26.5%
B- 500-750	43	0.98748	1.0029	0.98965	26.4%	26.6%
C- 750-1M	43	0.99879	1.0037	1.00237	25.6%	25.8%
D- 1M-1.25M	16	0.99608	1.0024	0.99823	25.9%	26.1%
E- 1.25M-1.5M	9	1.00570	1.0042	1.01016	24.4%	24.6%
F- 1.5M-1.75M	12	1.00246	1.0050	1.00753	22.0%	22.3%
G- 1.75M-2M	6	0.97556	1.0275	1.00037	19.2%	21.0%
H- 2M-2.5M	6	0.95960	1.0000	0.95960	18.3%	18.3%
J- Over 3M	2	1.00000	1.0000	1.00000	17.0%	17.0%

Next we show the loss ratio based on the original contract price v the new contract price

Loss Ratio Comaprison
Payer	Current Price	New Price
AIG Technical Third Party Oversight	72.00%	72.32%
AXA XL	75.77%	76.28%
Amerisure Mutual Insurance Company	70.25%	70.25%
CNA	75.31%	74.05%
Chubb	72.64%	72.88%
Clear Spring Property and Casualty Company	68.18%	68.75%
Old Republic Risk Management	79.88%	80.48%
Sentry Insurance	73.13%	72.48%
Travelers	74.17%	74.09%
Zurich North America	71.00%	71.20%

Loss Ratio by Effective Year
Payer	Effective Year	Current Price	New Price
AIG Technical Third Party Oversight	2023	71.57%	72.24%
AIG Technical Third Party Oversight	2024	71.46%	71.44%
AIG Technical Third Party Oversight	2025	74.15%	74.57%
AXA XL	2023	78.76%	79.63%
AXA XL	2024	68.52%	68.52%
AXA XL	2025	80.42%	80.42%
Amerisure Mutual Insurance Company	2023	71.19%	71.19%
Amerisure Mutual Insurance Company	2024	61.27%	61.27%
Amerisure Mutual Insurance Company	2025	75.85%	75.85%
CNA	2023	71.69%	72.51%
CNA	2024	74.92%	73.92%
CNA	2025	81.15%	76.31%
Chubb	2023	69.05%	69.80%
Chubb	2024	75.06%	74.96%
Chubb	2025	76.50%	76.09%
Clear Spring Property and Casualty Company	2023	65.97%	66.55%
Clear Spring Property and Casualty Company	2024	63.56%	63.56%
Clear Spring Property and Casualty Company	2025	77.73%	79.10%
Old Republic Risk Management	2023	82.29%	82.29%
Old Republic Risk Management	2024	80.28%	81.29%
Old Republic Risk Management	2025	72.90%	72.90%
Sentry Insurance	2023	70.07%	70.18%
Sentry Insurance	2024	73.38%	72.15%
Sentry Insurance	2025	76.63%	77.45%
Travelers	2023	72.56%	72.16%
Travelers	2024	76.03%	76.52%
Travelers	2025	77.66%	77.66%
Zurich North America	2023	64.78%	65.35%
Zurich North America	2024	74.10%	73.95%
Zurich North America	2025	76.26%	76.46%

This methodology would have led to fewer bookends, both Windfalls and Losses.

Bookends Before and After
Bookend	Current	New
L	49	48
N	879	885
W	128	123

There is a slightly larger proportion of risk cap eligible contracts (loss ratio < 61%) in the general client population as opposed to the top ten payers. Note this includes Completed, Abrogated and Active at 6/30/2025.

Top Payers Risk Cap Exposure - Current Price
Risk Cap Cutoff	Count	Contract Price	Percent Count	Percent Price
Over	487	737,464,073	74.6%	80.1%
Under	166	182,844,383	25.4%	19.9%

And at the proposed new price

Top Payers Risk Cap Exposure - New Price
Risk Cap Cutoff	Count	New Contract Price	Percent Count	Percent Price
Over	488	734,379,741	74.7%	79.9%
Under	165	184,884,501	25.3%	20.1%

Below is the risk cap exposure for all other payers out of the top ten

Other Payers Risk Cap Exposure - Current Price
Risk Cap Cutoff	Count	Contract Price	Percent Count	Percent Price
Over	284	460,103,133	70.5%	76.7%
Under	119	140,129,187	29.5%	23.3%

And at the new proposed prices.

Other Payers Risk Cap Exposure - New Price
Risk Cap Cutoff	Count	New Contract Price	Percent Count	Percent Price
Over	281	457,262,500	69.7%	76.0%
Under	122	144,194,042	30.3%	24.0%

Average Price Changes for Largest Clients - SCI Only

Alan Shulman

2025-09-10