Tokio Marine expands medical insurance with acquisition
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Tokio Marine has agreed to buy Gulf Guaranty Employee Benefit Services through its wholly owned subsidiary HCC Insurance Holdings.
The purchase price is undisclosed.
GGEBS is a managing general underwriter that designs, underwrites and administers group gap medical insurance for small and mid-sized businesses. The company offers group gap medical insurance that pays limited benefits for expenses otherwise covered by an employer’s primary medical insurance, but not payable due to the deductible and co-insurance provisions of the primary plan.
Tokio Marine defined gap medical insurance as a generic term for ancillary coverage to cover medical expenses that are not covered by the "primary medical insurance" arranged by the employer for its employees. It is sometimes also referred to as secondary medical insurance.
The Japanese insurer said it is seeking to capture growth in this market, to strengthen its presence in the health insurance market and to further diversify its business.
“GGEBS' gap medical insurance has been attracting attention in recent years, especially from small and medium-sized companies that want to maintain and improve employee benefits while keeping costs relatively low, because the coverage can be effectively designed to meet the needs of the client company,” said Tokio Marine.
“In the US, companies are required to provide health insurance to their employees, but as the cost of health insurance premiums has increased due to rising medical costs, an increasing number of companies are seeking to control costs by self-funding as an alternative to purchasing primary medical insurance, or by selecting high deductible plans for primary medical insurance.”
The transaction is expected to close in this quarter, subject to closing conditions, including receipt of regulatory approvals.
Is the health insurance market changing?
