Insurance Third Party Administrators Market Size (2024 - 2029)

Insurance Third Party Administrators Market Analysis

The Insurance Third-Party Administrators Market size is expected to grow from USD 454.83 billion in 2023 to USD 634.01 billion by 2028, at a CAGR of 6.87% during the forecast period (2023-2028).

Third-party administrators (TPAs) provide claims administrative services to insurance underwriting businesses. Many serve mid-sized or large companies that have opted to self-insure a portion of their liability, commercial property, or workers' compensation risks. They may also administer claims for businesses that have self-funded their health, dental, or other benefit plans. The business scope for TPAs varies from developed markets like the United States, where they play an auxiliary role in the insurance landscape, to developing economies like Malaysia, Vietnam, and Thailand, where TPAs/MBOs have a predominant hold on deciding the fee for doctors, etc. and stand as an intermediate before transforming themselves into a health insurance underwriter over the years.

The COVID-19 pandemic impacted the insurance industry in multiple ways, from employee and business continuity issues to client service considerations to the financial outlook. Insurers responded to the COVID-19 outbreak on multiple fronts as claims payers, employers, and capital managers. In this scenario, outsourcing players and TPAs were handy to the insurance industry.

Some TPAs built requisite capabilities in talent, technologies, and data to address the changing needs of the insurance industry, but most TPAs need to catch up. The Y-o-Y revenue growth slowed down for most TPAs in the United States. Due to the pandemic, this decline may continue in the current year.

While the TPA industry has multiple drivers, such as service expansions and carrier outsourcing, several impending challenges restrict growth opportunities. Most of the digital-led use cases implemented by TPAs are less sophisticated than those implemented by insurance IT providers or business process outsourcing providers.

Insurance Third Party Administrators Industry Segmentation

A third-party administrator is a company that provides operational services such as claims processing and employee benefits management under contract to another company. Insurance companies and self-insured companies often outsource their claims processing to third parties. The Insurance Third-party Administrators Market is Segmented by Insurance Type (Healthcare, Retirement Plans, Commercial General Liability Insurers, and Other Insurance Types) and by Geography (North America, Europe, Asia-Pacific, Latin America, and Middle-East and Africa). The report offers market size and forecasts for the Insurance Third-party administrators market in value (USD billion) for all the above segments.