Insurance Third-Party Administrator Market Strategies, Top Players, Growth Opportunities, Analysis and Forecast by 2031

The insurance third-party administrator market size is expected to reach US$ 544.67 billion by 2031 from US$ 256.02 billion in 2023. The market is estimated to record a CAGR of 9.9% from 2023 to 2031. Digital third-party administrators are likely to remain a key market trend in the coming years.

Insurance Third-Party Administrator Market Analysis

The insurance claim process can be complex and time consuming. A third-party administrator can help policyholders claim their policy benefits. They guide policyholders throughout the claim procedure and file claims on their behalf. Once the claims are filed, third-party administrators investigate and verify them. Their services can be tailored to a wide range of needs. Moreover, insurers can customize their agreements made with third-party administrators based on their specific needs. Other noteworthy offerings of insurance third-party administrator services include health benefits reporting and analytics, adjudicating claims, customer service for plan members, healthcare provider network access, detailed healthcare expense reporting, and collaborations with brokers and health insurance consultants. The increasing need for administrators in health insurance with the surging complexity of claim processes fuels the growth of the insurance third-party administrator market. Further, the proliferation of the insurance industry creates opportunities for market growth in the future. Digital third-party administrators are emerging as a significant trend in the market. On the other hand, data privacy concerns and security concerns limit the growth of the insurance third-party administrator market.

Insurance Third-Party Administrator Market Overview

A third-party administrator is an entity that handles administrative and operational tasks associated with an insurance plan. Administrative duties frequently include processing claims, enrolling consumers, and collecting premiums, adhering to federal rules. Third-party administrators do not create the policies of health insurance plans, but they help guarantee their implementation. A single third-party administrator may work with multiple insurers. While third-party administrators are typically linked with health insurance, they are employed in a wide range of other segments of the insurance industry. Commercial liability insurers and retirement plan administrators frequently hire third-party administrators to serve as claims adjusters or customer service representatives. Third-party administrator companies can be major multinational corporations, while individuals having third-party administrator certification can also work as independent contractors.

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Insurance Third-Party Administrator Market: Strategic Insights

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Insurance Third-Party Administrator Market Drivers and Opportunities

Increase in Preference for Administrators in Health Insurance Favors Market Growth

Third-party administrators serve as mediators between insurance companies and policyholders. They oversee specific services, such as processing claims, providing customer support, and managing payment transactions on behalf of health insurance companies. These service providers play a pivotal role in handling different facets of health insurance. They maintain policyholders' important records in a dedicated database and provide smooth back-end assistance. Third-party administrators also ensure the correct processing of policyholders' claims. They guarantee that the hospitals they manage meet the standards of network membership, allowing for hassle-free claim settlement. Various value-added services provided by several third-party administrators include specialized consultations, ambulance services, medical supplies, wellness programs, lifestyle management, 24-hour toll-free helplines, and health facilities. Insurers such as Oriental Insurance, New India Assurance, National Insurance, and United India opt for administrator services offered by Vidal Health Insurance TPA, Health Insurance TPA of India Ltd, Focus Health Services TPA Pvt. Ltd, Family Health Plan Insurance TPA Limited, and others. Thus, a broad application of third-party administrators in healthcare insurance drives the growth of the market.

Proliferation of Insurance Industry to Create Opportunities in Market

As countries grow and people gain more discretionary income, they are more likely to be able to afford and recognize the value of insurance products such as life, health, and property insurance plans. This is especially true for a burgeoning middle class striving for financial stability. People are becoming increasingly conscious of the possibility of financial loss due to unforeseen circumstances such as illness, accidents, or natural catastrophes. As a result, individuals, businesses, and other entities seek insurance policies to safeguard themselves from the repercussions, which fuels the demand for insurance solutions that can assist in managing these risks. According to the Federal Insurance Office (FIO), the US had 667 licensed L&H insurers, 2,656 P&C insurers, and 1,355 health in 2022. According to the India Brand Equity Foundation (IBEF), the insurance industry is one of the premium segments seeing significant expansion in India. This upward trend in the insurance sector can be ascribed to rising revenues and increased awareness of the profession. India has the sixth-largest life insurance market among emerging economies, growing at a pace of 32–34% per year. In recent years, the industry has experienced vigorous competition among rival businesses. Moreover, the insurance sector faces numerous constraints, including highly dynamic regulatory complications, which present organizations with considerable threats to financial and operational stability. Thus, the ongoing proliferation of the insurance industry is creating opportunities for the growth of the insurance third-party administrator market.

Insurance Third-Party Administrator Market Report Segmentation Analysis

Key segments that contributed to the derivation of the insurance third-party administrator market analysis are type and end user.

• Based on type, the market is segmented into healthcare, retirement plans, commercial general liability insurance, and other insurance types. The healthcare segment dominated the market in 2023.
• In terms of end user, the market is categorized into large enterprises, and small and medium-sized enterprises. The large enterprises segment dominated the market in 2023.

Insurance Third-Party Administrator Market Share Analysis by Geography

• The insurance third-party administrator market is segmented into five major regions: North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South & Central America. North America dominated the market in 2023, followed by APAC and Europe, respectively.
• The US, Canada, and Mexico are among the major economies in North America. This region accounts for a significant share of the global insurance third-party administrator market. These administrators handle claims operations and various other services for insurance companies. North America is a highly advanced region. Businesses in this region widely adopt advanced solutions to simplify their business workflow and operations. Continuous digitalization in the insurance industry is one of the factors fueling the insurance third-party administrator market growth in North America. For example, in October 2023, LIDP partnered with Sutherland, a global digital-first business-process-as-a-service (BPaaS) provider, to introduce innovative, comprehensive solutions. Digital tools and AI drive middle-office and back-office digitization and customer experience (CX), along with providing more precise insights into the insurance carrier business and growth.

Insurance Third-Party Administrator Market Regional Insights

The regional trends and factors influencing the Insurance Third-Party Administrator Market throughout the forecast period have been thoroughly explained by the analysts at Insight Partners. This section also discusses Insurance Third-Party Administrator Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Insurance Third-Party Administrator Market Report Scope

Insurance Third-Party Administrator Market Players Density: Understanding Its Impact on Business Dynamics

The Insurance Third-Party Administrator Market market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Insurance Third-Party Administrator Market are:

1. Sedgwick
2. Crawford and Company
3. CorVel Corp.
4. United Healthcare Services LLC
5. Helmsman Management Services, LLC
6. Charles Tayler

Disclaimer: The companies listed above are not ranked in any particular order.

Insurance Third-Party Administrator Market News and Recent Developments

The insurance third-party administrator market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the insurance third-party administrator market are listed below: Sedgwick has announced several new updates to its artificial intelligence-powered (AI) technology program The technology goal is to expedite the claims process by predicting, addressing, and automating steps in the claim lifecycle, thereby enhancing consumer experiences and streamlining claim resolutions.

(Source: Sedgwick, Press Release, May 2024)

• Crawford & Company's third-party administration business in the UK, i.e., Crawford TPA, has teamed with Automated Insurance Solutions (AIS), a British insurtech, to support speedier motor claims processing in the country. Crawford TPA would use AIS's automated motor claims liability assessment tool, BAIL, as part of its growing digital claims management ecosystem.

(Source: Crawford & Company, Press Release, May 2022)

Insurance Third-Party Administrator Market Report Coverage and Deliverables

The "Insurance Third-Party Administrator Market Size and Forecast (2021–2031)" provides a detailed analysis of the market covering the areas mentioned below:

• Insurance third-party administrator market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
• Insurance third-party administrator market trends as well as market dynamics such as drivers, restraints, and key opportunities
• Detailed PEST and SWOT analysis
• Insurance third-party administrator market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
• Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the insurance third-party administrator market
• Detailed company profiles