Why the Same Group Insurance Plan Can Have Different Prices
When business owners compare quotes for their group benefits plan, a common question arises:
“If the plan design and employee data are identical, why do different insurance companies quote different prices?”
It’s a fair question — and the answer isn’t just about numbers. It’s about how each insurance company defines its ideal client and which kinds of groups it prefers to insure.
Each Insurance Company Has a Different Ideal Client
Group insurance pricing isn’t uniform across the industry.
Each insurance company in Canada has its own view of what constitutes a “good risk,” and that perspective heavily influences how they price the same plan.
Key differentiators include:
Industry Focus
Some companies prefer professional, white-collar firms (law, accounting, technology) where claims tend to be more stable and predictable. Others are more comfortable with industries like healthcare, manufacturing, or retail. If your business aligns with their preferred sectors, you’ll likely receive more competitive quotes.Company Size Preferences
Some companies focus on very small businesses (under 10 employees), while others target mid-size or larger organizations. Your size can make you more or less attractive to different companies.Geographic Strategy
Insurance companies sometimes target growth in certain provinces or regions. A firm in Manitoba might get more favorable pricing from a company that’s trying to expand in Western Canada.Portfolio Management
Every insurance company manages its overall exposure across industries. If it already has many clients in your sector, it may quote more conservatively. Conversely, if your sector is underrepresented in its portfolio, it may price more aggressively to win your business.
Thus, two insurance companies evaluating the same plan, same employee census, and same data can arrive at very different price conclusions.
Pricing Is Both Analytical and Strategic
While all insurance companies rely on core data — age distribution, claims history, location, plan design — how each company interprets and weights that information can differ substantially:
One company may heavily reward consistent claims experience.
Another may place more emphasis on demographics or provincial cost factors.
Some may be more aggressive on health and dental, while others compete on life and disability benefits.
When a company is looking to grow in a certain sector, it may temporarily sharpen its pricing toward groups like yours.
This strategic side of pricing is why market conditions and company priorities shift over time.
Why Market Research Is Important
A proper market comparison is not about chasing the lowest quote. It’s about finding which insurance companies view your business favorably—and can offer sustainable pricing over time.
A robust market review should:
Benchmark your benefits plan against similar businesses in your industry
Identify which insurance companies are currently aggressive in your sector or region
Help you avoid short-term “teaser” rates that may backfire at renewal
If you’re curious how your current plan compares to the market, you can try the Next Benefits Benchmarking Tool. It’s designed to give you a snapshot of how your plan stacks up against others across Canada.
When to Shop the Market
Timing your market review is critical. Doing it too frequently can create instability and reduce your credibility, while waiting too long can mean missed opportunities.
You should consider going to market when:
Your claims have been relatively stable for at least two years
Your industry is seeing favorable pricing trends
You believe your current insurance company’s pricing is above what comparable organizations are paying
You should avoid marketing when:
You recently changed to a new insurance company
Your claims are unusually high or volatile
You’re in the middle of a rate guarantee period
The ideal approach is a strategic market review, launched when the industry is receptive to your profile.
Conclusion
Even when plan design and employee data are identical, pricing among insurance companies can vary dramatically. The difference lies in how each company views risk, balance, growth priorities, and portfolio mix.
At Next Benefits, we help Canadian employers understand where they stand in today’s market and connect them with insurance companies best suited to their business.
If you’d like to see how your plan compares, start with the Next Benefits Benchmarking Tool— and let us help you make smart decisions for your group benefits.
