U.S. Insurance Third-party Administrator Market Expected to Reach $243.26 Billion by 2030 - Allied Market Research

According to a recent report published by Allied Market Research, titled, “U.S. Insurance Third-party Administrator Market by Service Type, End User, and Enterprise Size: Opportunity Analysis and Industry Forecast, 2021-2030,” the U.S. insurance third-party administrator market was valued at $156.08 billion 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 acts as an intermediary between the insurance company and policyholder to ensure cashless claims, and reimbursement claims are settled effectively. Increase in health insurance customers has accelerated the quantity of work and led to decrease in the quality of services. Therefore, third-party administrators are established to assist insurers to arrange for cashless treatments for customers demanding seamless claim settlements. In addition, third-party administrators scrutinize hospital bills and documents for their accuracy and help in the processing of the claim.

Rise in need for effective claim handling & payment settlement, achieving operational efficiency & transparency in insurance business process, and adoption of third-party administrator in health insurance are the key factors propelling the growth of the U.S. insurance third-party administrator industry. However, risk of data theft and security issues are the major factors limiting the market growth. On the contrary, with rising number of health insurance policyholders, worker compensation prefers third-party administrators to effectively handle claims and settlement of payment on behalf of the insurance companies. Thus, the demand for insurance third-party administrator is anticipated to grow exponentially in the coming years, which is likely to offer remunerative opportunities for the expansion of the market in the U.S.

On the basis of end user, the life & health insurance segment is expected to grow at a fastest rate during the forecast period. This is attributed to the fact that third-party administrators provide a variety of services such as billing services and data & analytics, which help in claim processing & settlement while providing timely customer services.

The outbreak of COVID-19 has positively impacted the U.S. third-party administrator market due to the rise is number of claims for health insurance during the pandemic. Therefore, insurance companies are depending on TPAs for handling such large number of claims and providing payment settlement. Furthermore, during the global health crisis, hospitalization has increased tremendously for which TPAs are providing ambulance services, medical facilities, and other value-added services in the country. Therefore, the demand for third-party administrator has increased during the COVID-19 pandemic.   

Key findings of the study

• By service type, the claims management segment led the U.S. insurance third-party administrator market size in terms of revenue in 2020.
• On the basis of end user, the life & health insurance segment accounted for the highest share in 2020.
• Depending on enterprise size, the large enterprises segment generated the highest revenue in 2020.

The top companies in the U.S. third-party administrator market analysis include such as Charles Taylor, CORVEL, CRAWFORD & COMPANY, ESIS, ExlService Holdings, Inc., GALLAGHER BASSETT SERVICES, INC., Helmsman Management Services LLC, Meritain Health, SEDGWICK, and United HealthCare Services, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the U.S. insurance third-party administrator market share.