[pas]

okay, but surely then they get reinsurance, no? also does it make sense for every huge company to have their own insurance department?

isn't this simply a service that big corps can buy from these huge insurers? so they end up as the payers, they can manage their own plan(s), but of course they actually don't even have one single actuary on payroll, right?

[shimon]

Yes they also typically buy reinsurance (insurance that covers individuals whose claims exceed some amount in a given year, like say $150,000). The company will have some people in HR who administer this program but they aren't duplicating a lot of what the insurance companies do -- that's why they pay for administrative services.

They rarely have actuaries on payroll but there are several boutique actuarial consultant who serve these companies (e.g. "given the geographical distribution of your employees and the higher use of services X, Y, Z, you would save $xxx if you choose insurer A over insurer B").