Insurance Third-Party Administrator Market Outlook by 2031

Insurance Third-Party Administrator Market Size and Forecast (2021-2031), Global and Regional Share, Trends, and Growth Opportunity Analysis: By Insurance Type (Healthcare, Retirement Plans, Commercial General Liability Insurers, and Other Insurance Types); End-user (Large Enterprises and Small & Medium-Sized Enterprises); and Geography

  • Report Code : TIPRE00039066
  • Category : Banking, Financial Services, and Insurance
  • Status : Data Released
  • No. of Pages : 150
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Insurance Third-Party Administrator Market Size and Trends

The insurance Third-Party administrator market size is expected to grow from US$ 356.42 billion in 2023 to US$ 747.50 billion by 2031; it is anticipated to expand at a CAGR of 9.7% from 2023 to 2031. Third-party administrators (TPAs) play a critical role in streamlining the claims procedure. They assess claims, authenticate information, and enable prompt payments to receivers. This speeds up the resolution process and improves customer satisfaction. Furthermore, TPAs handle policy administration processes like endorsements, issuing policies and renewals, and reducing administrative loads for insurers. By outsourcing these functions to TPAs, insurance firms can focus on risk assessment, underwriting, and intensifying their business. Thus, the demand for insurance Third-Party administrator services is expected to increase during the forecast period.

Insurance Third-Party Administrator Market Analysis

The increase in the adoption of third-party administrators in the health insurance business and the surge in the need for operational transparency & efficiency in the insurance business are boosting insurance Third-Party administrator market growth. However, privacy concerns and security issues, along with limited awareness or understanding of insurance third-party administrator services, restrict the growth of the insurance Third-Party administrator market. On the contrary, technological advancements in third-party administrator services are expected to provide lucrative opportunities for the development of the market during the forecast period.

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Insurance Third-Party Administrator Market: Strategic Insights

insurance-third-party-administrator-market
Market Size Value inUS$ 356.42 billion in 2023
Market Size Value byUS$ 747.50 billion by 2031
Growth rateCAGR of 9.7% from 2023 to 2031
Forecast Period2023-2031
Base Year2023
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Insurance Third-Party Administrator

Industry Overview

  • A third-party administrator is a licensed third-party entity that delivers administrative solutions to employment firms, health insurance companies, and other businesses. It acts as an intermediary between the policyholder and the insurance company to ensure cashless claims and reimbursement.
  • Additionally, the surge in health insurance customers has augmented the quantity of work and led to a decrease in the quality of insurance services. Thus, TPAs are established to support insurers in arranging for cashless treatments for clients demanding seamless claim payments. In addition, TPAs also examine hospital documents and bill documents for their correctness and help in the processing of the claim.

Insurance Third-Party Administrator Market Driver

Increasing Operational Outsourcing to Drive the Insurance Third-Party Administrator Market

  • The growing trend of operational outsourcing is supplementing the market growth. Insurers are progressively recognizing the value of transferring non-core functions to specialized TPAs. By assigning tasks like policy administration, claims processing, and customer service to TPAs, underwriters can optimize their resources and focus on fundamental activities such as risk and underwriting assessment. This move improves operational efficiency, lessens administrative overhead, and aids insurers to respond more efficiently to market dynamics.
  • Operational outsourcing to TPAs also allows insurers to access technologies and expertise that might be cost-prohibitive to develop in-house. As the complication of insurance operations increases and governing compliance becomes more complex, TPAs deliver a dedicated approach to handling these challenges. This strategic collaboration provides a competitive edge for insurance companies, improves customer experience, and fast-tracks insurance industry growth.

Insurance Third-Party Administrator

Market Report Segmentation Analysis

  • Based on end-users, the insurance Third-Party administrator market is segmented into large enterprises and small & medium-sized enterprises. The large enterprises segment dominated the insurance Third-Party administrator market share in 2023 and is expected to continue this trend during the forecast period, as large enterprises deal with a higher volume of insurance claims, policies, and policyholders, which further boost the market demand.
  • However, the small and medium-sized enterprises segment is projected to witness significant growth in the upcoming years, as it provides substantial benefits to reduce costs and better claim efficiency to these enterprises, which drives the adoption of the insurance Third-Party administrator industry among SMEs.
  • A third-party administrator is essential to process healthcare claims. In the applied world of insurance, a few responsibilities of a TPA may comprise the commitment to accelerate the claim process as soon as the insured indicates it. Their responsibility is to review all supportive documents and settle down the claim either on a reimbursement basis or cashlessly. TPAs also manage other services, such as wellness programs, ambulances, and so on, in addition to the claim procedure.
  • Additionally, increasing healthcare costs are anticipated to surge the demand for third-party administrators during the forecast period. The cost of healthcare has increased dramatically in current years and is anticipated to rise even further as chronic disease frequency increases. Thus, the healthcare segment is expected to grow during the forecast period.

Insurance Third-Party Administrator

Market Regional Analysis

The scope of the insurance third-party administrator market report is primarily divided into five regions - North America, Europe, Asia Pacific, Middle East & Africa, and South America. North America is observing rapid growth and is expected to hold a noteworthy insurance Third-Party administrator market share in 2022. In North America, TPAs are observing increased demand owing to compound regulatory landscapes, increasing healthcare costs, and a requirement for efficient administrative processes. With the intricacies of the US healthcare system, TPAs play a critical role in managing provider networks, health insurance claims, and member services. Furthermore, focusing on retirement planning in the region further drives TPA growth, as TPAs assist in competently administrating various retirement plans.

Insurance Third-Party Administrator

Market Report Scope

The "Insurance Third-Party Administrator Market Analysis" was carried out based on insurance type and geography. In terms of insurance type, the market is segmented into healthcare, retirement plans, commercial general liability insurers, and other insurance types. Based on end-users, the insurance third-party administrator market is segmented into large enterprises and small & medium-sized enterprises. Based on geography, the market is segmented into North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

Insurance Third-Party Administrator

Market Leaders & Share Analysis

Sedgwick, ESIS, Crawford & Company, CorVel, United Healthcare Services, Inc., Helmsman Management Services, LLC, Charles Taylor, ExlService Holdings, Inc., Gallagher Bassett Services LLC, and Meritain Health, Inc. are among the prominent players profiled in the Insurance Third-Party Administrator market report. In addition, several other players have been studied and analyzed during the study to get a holistic view of the market and its ecosystem. The insurance third-party administrator market forecast is estimated based on various secondary and primary research findings, such as key company publications, association data, and databases.

Insurance Third-Party Administrator

Market News and Recent Developments

Companies adopt inorganic and organic strategies such as mergers and acquisitions in the insurance third-party administrator market. A few recent key market developments are listed below:

 

  • In December 2022, Sedgwick launched a novel resource solutions business unit for its insurer clients in the UK. Sedgwick's experience and technical expertise help clients with both temporary and permanent placements across claims handling divisions.

(Source: Sedgwick, Company Website)

  • In September 2022, Sedgwick acquired full ownership of Sedgwick Leif Hansen A/S, a loss-adjusting and third-party administration firm based in Denmark. Preceding to the acquisition, Sedgwick was a minority shareholder in the company.

(Source: Sedgwick, Company Website)

Insurance Third-Party Administrator

Market Report Coverage & Deliverables

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

  • Market size & forecast at global, regional, and country levels for all the key market segments covered under the scope.
  • Market dynamics such as drivers, restraints, and key opportunities.
  • Key future trends.
  • Detailed PEST & SWOT analysis
  • Global and regional market analysis covering key market trends, key players, regulations, and recent market developments.
  • Industry landscape and competition analysis covering market concentration, heat map analysis, key players, and recent developments.
  • Detailed company profiles.
Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

Insurance Type, End-user, and Geography

Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

This text is related
to country scope.

Frequently Asked Questions


Which are the key players holding the major market share of the third-party administrator market?

The key players holding majority shares in the global third-party administrator market are Sedgwick, Crawford & Company, CorVel, United Healthcare Services, Inc., and Helmsman Management.

What will be the market size for the global third-party administrator market by 2031?

The global third-party administrator market is expected to reach US$ 747.50 billion by 2031.

What is the estimated market size for the global third-party administrator market in 2022?

The global third-party administrator market was estimated to be US$ 356.42 billion in 2023 and is expected to grow at a CAGR of 9.7 % during the forecast period 2023 - 2030.

What are the future trends of the Global third-party administrator market?

Technological innovations in the market, which is anticipated to play a significant role in the global third-party administrator market in the coming years.

What are the driving factors impacting the global third-party administrator market?

Increasing demand from the healthcare industry and growing digitalization are the major factors that propel the global third-party administrator market.

  • Sedgwick
  • ESIS
  • Crawford & Company
  • CorVel
  • United Healthcare Services, Inc.
  • Helmsman Management Services, LLC
  • Charles Taylor
  • ExlService Holdings, Inc.
  • Gallagher Bassett Services LLC
  • Meritain Health, Inc.

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

  • Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
  • Validates and strengthens in-house secondary research findings
  • Develops the analysis team’s expertise and market understanding

Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
  • Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.

Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

  • 3.2 Country Level Data:

Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.

  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.

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