Merit Medicine White Paper Shows AI Improves Group Health Underwriting

Retrospective study with national stop-loss carrier demonstrates 29% medical loss ratio improvement using predictive analytics.

Published on Feb. 24, 2026

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Merit Medicine, a healthcare analytics company, released a white paper showing how its AI-powered predictive analytics platform, Merit Predict, could have improved underwriting outcomes by 107% for a national stop-loss carrier. The retrospective case study, validated by an independent actuarial firm, analyzed 19 employer groups and found that Merit Predict successfully identified four of the six highest-risk groups before underwriting decisions were made.

Why it matters

The study highlights the challenges facing stop-loss carriers, MGUs, primary insurers, and reinsurance partners in accurately assessing group health risk using traditional underwriting methods. Merit Predict's ability to identify high-volatility groups that disproportionately drive losses could help carriers price more competitively, improve win rates, and manage capital exposure more effectively.

The details

The analysis revealed that the four highest-risk (Tier 5) groups, representing just 21% of the total, accounted for 52% of underwriting losses. Excluding or repricing these Tier 5 groups would have improved the total loss ratio from 83.6% to 55%, and profit margin would have increased from 16.4% to 45%. Two Tier 5 groups experienced reimbursements 172% higher than collected premiums, and the single largest loss of $2.3M had a Stop-Loss Risk Score 1.5X higher than any other group.

  • The white paper was released on February 24, 2026.

The players

Merit Medicine, Inc.

A leading healthcare analytics company specializing in AI-driven predictive insights.

Ali Panjwani

Founder of Merit Medicine.

Joshua W. Axene

FSA, FCA, MAAA, Partner and Consulting Actuary at Axene Health Partners, an independent actuarial firm that validated the findings.

Axene Health Partners

An independent health actuarial consulting firm focused on helping organizations understand, manage, and predict healthcare costs.

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What they’re saying

“This white paper validates what we've long believed: that a small number of high-volatility groups disproportionately drive losses in health insurance portfolios, and these groups can be identified before underwriting decisions are made.”

— Ali Panjwani, Founder of Merit Medicine (Merit Medicine)

“The results demonstrate a clear pattern of loss concentration that Merit Predict successfully identified prospectively. This level of predictive accuracy represents a meaningful advancement in underwriting discipline. For carriers managing tail risk and capital efficiency, these insights provide a defensible, auditable framework that complements traditional actuarial methods rather than replacing them.”

— Joshua W. Axene, FSA, FCA, MAAA, Partner and Consulting Actuary at Axene Health Partners (Merit Medicine)

What’s next

The full white paper, "Using AI-Led Predictive Analytics to Improve Underwriting Outcomes," is available for download on the Merit Medicine website.

The takeaway

Merit Medicine's AI-powered predictive analytics platform, Merit Predict, has the potential to significantly improve group health underwriting outcomes by identifying high-risk groups before binding, allowing carriers to price more competitively and manage capital exposure more effectively.