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2021

U.S. Insurance Third-party Administrator Market

U.S. Insurance Third-party Administrator Market Size, Share, Competitive Landscape and Trend Analysis Report, by Service Type, End User and Enterprise Size : Opportunity Analysis and Industry Forecast, 2021-2030

BI : Insurance

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Author's: Aarti Goswami| Pramod Borasi | Onkar Sumant
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U.S. Insurance Third-party Administrator Market Outlook - 2030

The U.S. insurance third-party administrator market was valued at $156,081.04 million in 2020, and is projected to reach $243.26 Billion by 2030, growing at a CAGR of 4.6% from 2021 to 2030.

Third-party administrator is an organization that processes insurance claims for several insurance coverages such as workers compensation and general liability. It is an organization within the insurance industry, which administers other services such as underwriting and customer service. Third-party administrators perform outsourcing of administrating the claims process, as third-party administrators perform the task, which is handled by the insurance company or the company itself. 

U.S. Insurance Third-Party Administrator Market

Rapid adoption of third-party administrators in the health insurance industry and rise in need for operational efficiency & transparency in insurance business process are some of the factors propelling the market growth. However, security issues and privacy concerns are the major factors limiting the U.S. insurance third-party administrator market. On the contrary, technological advancements in third-party administrator, such as adoption of Internet of things (IoT), artificial intelligence, machine learning, and robotics process automation have led to the growth of the industry. Furthermore, artificial intelligence technology has claims administration with predictive outcomes, wherein a low-cost claim can be identified automatically through processing & eliminating the need for claim adjustment intervention. Thus, the demand for insurance third-party administrator is expected to grow considerably in coming years. 

The report focuses on growth prospects, restraints, and trends of the U.S. insurance third-party administrator market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers, on the U.S. insurance third-party administrator market.

Segment review

The U.S. insurance third-party administrator market industry is segmented into service type, end user, and enterprise size. By service type, the market is divided into claims management, policy management, commissions management, and others. On the basis of end user, it is bifurcated into life & health insurance and property & casualty (P&C) insurance. Depending on enterprise size, it is bifurcated into large enterprises and small & medium-sized enterprises.    

U.S. Insurance Third-party Administrator Market
By Enterprise Size
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Large Enterprises segment accounted for the highest market share in 2020

COVID-19 Impact Analysis

The outbreak of COVID-19 is anticipated to provide growth opportunities for the insurance third-party administrator market during the forecast period. This is attributed to rise in digital transformation trend in insurance and surge in demand for third-party administrator solutions that are hosted or managed on the cloud. Moreover, during the pandemic, the number of claims in health insurance increased in the U.S. Therefore, to effectively handle such high number of claims, insurance companies are heavily investing in third-party administrator services. Thus, these factors ensure that insurance companies are considering third-party administrators for improving cost efficiency and business operations during the pandemic situation.  

Top impacting factors

Surge in adoption of third-party administrators in the health insurance industry

Third-party administrator outsourcing plays a vital role in the health insurance industry, as it helps health insurance companies to increase their efficiency by processing claims and settling payments. In addition, third-party administrators provide various features to end users, which include 24/7 support; responding to customer queries over multiple channels such as social media, chat, and email; and capitalizing on sales opportunities beyond geographical locations. 

U.S. Insurance Third-party Administrator Market
By End User
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Life & Health Insurance segment is projected as one of the most lucrative segments.

However, due to COVID-19, increase has been witnessed in the number of health insurance customers, which led to surge in the burden of work and decrease in the quality of claim processing & settlement services, thereby driving the growth of the market. In addition, third-party administration services are increasingly adopted by health insurance companies, as they offer various value-added services along with processing of the claim and scrutinizing the hospital bills such as ambulance, helpline facilities for knowledge sharing, and providing a long list of network hospitals. This subsequently fuels the growth of the U.S. insurance third-party administrator market.

Advancement in third-party administrator services  

Traditional third-party administrator services have been deployed since several decades; however, increased adoption of advanced technologies, such as Internet of Things (IoT), artificial intelligence, machine learning, and robotics process automation have led to the growth of the U.S. third-party administrator industry. The latest developments in technology have enabled the emergence of eTPAs. For instance, SCM Insurance Services, a leading provider of insurance and risk management services in the U.S., announced the continued expansion and enhancement of its third-party administrator offering under international programs group (IPG). IPG is a U.S. leading provider of third-party administrator solutions, and by bringing together two premier U.S. third-party administrator solutions, affirmative risk management (ARM) and claims management Inc. (CMI), IPG becomes the prominent provider of third-party administrator services in the country with superior technology through iAdjust, and a comprehensive suite of third-party administrator solutions. Therefore, increase in number of strategic developments in the U.S. is anticipated to provide remunerative opportunities for the expansion of the market during the forecast period.

U.S. Insurance Third-party Administrator Market
By Service Type
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Policy Management would exhibit the highest CAGR of 7.5% during 2021-2030

Key benefits for stakeholders 

  • The study provides in-depth analysis of the U.S. insurance third-party administrator market share along with current & future trends to illustrate the imminent investment pockets.
  • Information about key drivers, restrains, & opportunities and their impact analysis on the insurance third-party administrator market size are provided in the report.
  • Porter’s five forces illustrates the potency of buyers and suppliers operating in the U.S. insurance third-party administrator market growth.
  • An extensive analysis of the key segments of the industry helps to understand the U.S. insurance third-party administrator market trends.
  • The quantitative analysis of the U.S. insurance third-party administrator market size from 2021 to 2030 is provided to determine the market potential.

U.S. Insurance Third-party Administrator Market Report Highlights

Aspects Details
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By ENTERPRISE SIZE
  • Large enterprises
  • Small- & medium-sized enterprises (SMEs)
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By END USER
  • Life & health insurance
  • P&C insurance
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By SERVICE TYPE
  • Claims management
  • Policy management
  • Commission management
  • Others
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Key Market Players

CRAWFORD & COMPANY, HELMSMAN MANAGEMENT SERVICES LLC, UNITED HEALTHCARE SERVICES, INC., ESIS, EXLSERVICE HOLDINGS, INC., CHARLES TAYLOR, GALLAGHER BASSETT SERVICES, INC., MERITAIN HEALTH, CORVEL, SEDGWICK

Analyst Review

The demand for insurance third-party administrators has been witnessed to increase rapidly to handle the claims of worker’s compensation offered by employment firms under employee benefits in the country. In addition, third-party administrators are used to manage company’s group benefits, particularly health, workers compensation, and dental claims that are self-funded.

Furthermore, third-party administrators are used by health insurance companies to handle claims of the policyholders and provide value-added services, including hospitalization of patients, medical facilities such as arrangement of wheelchairs, beds, and medicines.

The CXOs further added that during the COVID-19 pandemic, third-party administrator services increased significantly. This was attributed to increased need for hospitalization and unavailability of hospital beds that accelerated the dependency on third-party administrators for arrangement of beds and medical equipment. Therefore, increase in adoption of third-party administrators by insurance companies for effectively handling the claims & providing other related insurance services during the pandemic notably contributed toward the market growth.

 

Author Name(s) : Aarti Goswami| Pramod Borasi | Onkar Sumant
Frequently Asked Questions?

The U.S. Insurance Third-party Administrator Market is estimated to grow at a CAGR of 4.6% from 2021 to 2030.

The U.S. Insurance Third-party Administrator Market is projected to reach $243.26 Billion by 2030.

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Surge in adoption for ruggedized computers for various industrial purposes, and increasing investments for development of smart cities etc. boost the U.S. Insurance Third-party Administrator market growth.

The key players profiled in the report include General Dynamics Corporation, Crystal Group, QualcoCharles Taylor, CORVEL, CRAWFORD & COMPANY, ESIS, ExlService Holdings, Inc and many more.

On the basis of top growing big corporations, we select top 10 players.

The U.S. Insurance Third-party Administrator Market is segmented on the basis of service type, end user, and enterprise size.

The key growth strategies of U.S. Insurance Third-party Administrator market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.

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U.S. Insurance Third-party Administrator Market

Opportunity Analysis and Industry Forecast, 2021-2030