Insurance Third Party Administrator Market 2023 - Global Industry Expected to Grow at CAGR of 9.6% and Forecast to 2032

Third party administrator (TPA) is a licensed third-party entity, which provides administrative solutions to health insurance companies, employment firms, and other entities. It acts as an intermediary between the insurance company and the policyholder to ensure cashless claims and reimbursement claims are settled effectively. Furthermore, the increase in health insurance customers has accelerated the quantity of work and led to a decrease in the quality of services. Therefore, TPAs are established to assist insurers in arranging for cashless treatments for customers demanding seamless claim settlements. In addition, TPAs also scrutinize hospital bills and documents for their accuracy and help in the processing of the claim.

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The rise in the adoption of third-party administrators in the health insurance industry and the rise in the need for operational efficiency & transparency in the insurance business are driving the growth of the insurance third-party administrator market. However, security issues and privacy concerns, along with limited understanding or awareness of insurance third-party administrator services limit the growth of insurance third-party administrator market. Conversely, technological advancements in third-party administrator services are anticipated to provide numerous opportunities for the expansion of the insurance third party administrator industry during the forecast period.

Allied Market Research published a report, titled, "Insurance Third Party Administrator Market by Service Type (Claims Management, Policy Management, Commission Management, Others), by End User (Life & Health Insurance and Property & Casualty Insurance), by Life & Health Insurance Type (Life Insurance and Health Insurance), by Health Insurance Type (Disease Insurance and Medical Insurance), by Demographics (Senior Citizens, Adults, and Minors), by Enterprise Size (Large Enterprises and Small & Medium-Sized Enterprises): Global Opportunity Analysis and Industry Forecast, 2023-2032". According to the report, the global insurance third party administrator industry generated $324.9 billion in 2022, and is anticipated to generate $795.1 billion by 2032, witnessing a CAGR of 9.6% from 2023 to 2032.

Prime determinants of growth

The rise in the adoption of third-party administrators in the health insurance industry and the rise in the need for operational efficiency & transparency in the insurance business drive the growth of the market. However, security issues and privacy concerns, along with limited understanding or awareness of insurance third-party administrator services limit the growth of this market. Conversely, technological advancements in third-party administrator services are anticipated to provide numerous opportunities for the expansion of the market during the forecast period.

Covid-19 Scenario

The insurance third party administrator market has witnessed significant growth during the COVID-19 pandemic, as the spread of novel coronavirus has led to an increase in demand for health insurance services.

The pandemic emphasized the significance of health insurance coverage, which resulted in a rise in demand for health insurance services.
Consequently, third-party administrator insurance services that specialized in health insurance experienced increased volumes of claims and policy inquiries.

Moreover, several companies are also investing to expand the portfolio of insurance TPA services, with the aim to improve cost-efficiency, which, in turn, is contributing toward the growth of the market.

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The claims management segment to maintain its leadership status throughout the forecast period

Based on service type, the claims management segment held the highest market share in 2022, accounting for more than two-thirds of the global insurance third party administrator  Industry revenue, owing to the rise in penetration of data analytics in claim management to process and analyze large volumes of claims data. However, the policy management segment is projected to manifest the highest CAGR of 12.1% from 2023 to 2032, owing to the emerging trend of digitalization, such as cloud-based platforms, artificial intelligence (AI), and robotic process automation (RPA) in policy management processes.

The life & health insurance segment to maintain its lead position during the forecast period

Based on end user, the life & health insurance segment accounted for the largest share in 2022, contributing to nearly three-fifths of the global insurance third party administrator market revenue. This segment is also expected to portray the largest CAGR of 10.4% from 2023 to 2032 and is projected to maintain its lead position during the forecast period, owing to the rise in the need for end-to-end claim processing in this sector to verify policyholder information, assess the validity of claims, and facilitate the settlement process, which eventually drives the need for TPA services in life & health insurance segment.

The large enterprises segment to maintain its leadership status throughout the forecast period

Based on enterprise size, the large enterprises segment held the highest market share in 2022, accounting formore tahn three-fifths of the global insurance third party administrator market revenue, owing to TPAs protecting these enterprises from such uncertainties and ensuring the smooth running of the business by reducing the chances of business interruptions and consequential losses. However, the small & medium-sized enterprises (SMEs) segment is projected to manifest the highest CAGR of 10.9% from 2023 to 2032, owing to the rise in adoption of cloud-based TPA services that help SMEs to offer scalable, flexible, and cost-effective services and provide better customer experiences.

North America to maintain its dominance by 2032

Based on region, North America held the highest market share in terms of revenue in 2022, accounting for nearly three-fifthsof the global insurance third party administrator market revenue, owing to the high cost of healthcare, which drives the demand for efficient healthcare claims processing and administration in the region. However, the Asia-Pacific region is expected to witness the fastest CAGR of 12.1% from 2023 to 2032 and is likely to dominate the market during the forecast period, owing to an increase in digital markets in Central and Southern Asia and the surge in spending on insurance services across the countries of Asia-Pacific region, particularly India, Japan, and China.

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Leading Market Players: -

Charles Taylor
Corvel
Crawford and Company
ESIS
Exlservice Holdings, Inc.
Gallagher Bassett Services LLC
Helsman Management Services, LLC
Meritain Health, Inc.
Sedgwick
United Healthcare Services, Inc.

The report provides a detailed analysis of these key players in the global insurance third party administrator market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.

Key Benefits for Stakeholders:

This report provides a quantitative analysis of the market segments, current trends, estimations, and dynamics of the insurance third party administrator market analysis from 2022 to 2032 to identify the prevailing insurance third party administrator market opportunity.

The market research is offered along with information related to key drivers, restraints, and opportunities.

Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders to make profit-oriented business decisions and strengthen their supplier-buyer network.

In-depth analysis of the insurance third party administrator market growth assists in determining the prevailing market opportunities.

Major countries in each region are mapped according to their revenue contribution to the global market.

Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.

The report on insurance third party administrator market trends includes an analysis of the regional as well as global insurance third party administrator market share, key players, market segments, application areas, and market growth strategies.

Insurance Third-Party Administrator Market Key Segments:

By Service Type:

Claims Management
Policy Management
Commission Management
Others

By End User:

Life and Health Insurance
Life and Health Insurance Type
Life Insurance
Health Insurance
Health Insurance Type
Disease Insurance
Property and Casualty Insurance
P and C Service Type
Claims Management
Policy Management
Commission Management
Others

P and C Insurance Type
Property Insurance
Professional Liability Insurance
Product Liability Insurance
Directors and Officers (D AND O) Liability Insurance
Others

By Enterprise Size:

Large Enterprises
Small and Medium-Sized Enterprises

By Region:

North America (U.S., Canada)
Europe (UK, Germany, France, Italy, Spain, Netherlands, Switzerland, Rest of Europe)
Asia-Pacific (China, India, Japan, Australia, South Korea, Rest of Asia-Pacific)
LAMEA (Latin America, Middle East, Africa)

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