Insurance Third-Party Administrator Market Report By Insights, Size, and Growth - 2031

The market for insurance third-party administrators was valued at approximately US$ 1.85 billion in 2023 and is projected to grow significantly, reaching US$ 256.02 billion in the same year and further escalating to US$ 544.67 billion by 2031. This growth trajectory indicates a compound annual growth rate (CAGR) of 9.9% from 2023 to 2031.

The insurance third-party administrator market is categorized into five primary regions: North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South & Central America. In 2023, North America led the market, followed closely by APAC and Europe. A key driver of market expansion in North America is the heightened awareness and preference for insurance products. The prevalence of digital solutions across various industries further aids third-party administrators in this region by streamlining workflows and ensuring accurate operations, thus enhancing service delivery to policyholders. Insurance firms in North America are actively pursuing both organic and inorganic growth strategies, including market expansion and the introduction of new products, which bolster the progress of the insurance third-party administrator market in the region.

The Asia Pacific region is anticipated to witness the highest growth rate in the insurance third-party administrator market from 2023 to 2031. A report by KPMG highlighted that as of December 2022, Asia Pacific was the fastest-growing market for insurance services. The increasing population and rising awareness of the advantages of insurance, particularly highlighted during the COVID-19 pandemic, have revitalized the insurance sector in this area. Consumers in various countries are becoming more cognizant of healthcare expenses and are opting for enhanced healthcare coverage. Consequently, to accommodate the growing number of policyholders, insurance companies are increasingly engaging third-party administrators to extend their services to a wider audience. In APAC, third-party administrator service providers are expanding their operations through various inorganic growth strategies. For instance, in September 2022, Medi Assist, the leading health insurance third-party administrator in India, announced its acquisition of Medvantage Insurance TPA Pvt. Ltd., a company with a 20-year history focused on corporate clients. This acquisition enabled Medvantage and its clientele to leverage Medi Assist's extensive network of hospitals across India, along with advanced capabilities in AI/ML, automation, and fraud prevention. Such strategic acquisitions are instrumental in broadening customer outreach, thereby contributing to the growth of the insurance third-party administrator market in APAC.

From an end-user perspective, the insurance third-party administrator market is divided into large enterprises and small to mid-sized enterprises. The segment representing large enterprises holds the most significant share of the insurance third-party administrator market. Third-party administrators serve as essential partners for large organizations, offering a range of services that facilitate the management of employee benefit programs and risk mitigation. They alleviate the administrative load for large enterprises, which often handle numerous employee benefit claims. These administrators are responsible for processing health insurance claims, workers' compensation claims, and other related documentation, allowing human resources and internal accounting teams to focus on more strategic initiatives. Third-party claims administrators possess the expertise and technological resources necessary to manage intricate claims efficiently. Employees within these organizations remain informed about regulatory updates and best practices to ensure compliance. Large enterprises typically require a comprehensive suite of services from third-party claims administrators, including claims management, policy administration, and commission processing. Notable companies providing third-party claims administrator services to large enterprises include Sedgwick, UMR Inc., Crawford, and CorVel Corp.

Key players in the insurance third-party administrator market include Sedgwick, Crawford and Company, CorVel Corp., United Healthcare Services LLC, Helmsman Management Services, LLC, Charles Taylor, ExlService Holdings, Inc., Gallagher Bassett Services LLC, and Meritain Health, Inc., all of which are profiled in this market analysis.

The overall size of the insurance third-party administrator market has been determined through a combination of primary and secondary research methodologies. Extensive secondary research has been conducted utilizing both internal and external sources to gather qualitative and quantitative data regarding the market size. This approach also aids in providing a comprehensive overview and forecast of the market across all segments. Additionally, numerous primary interviews have been carried out with industry stakeholders to validate the findings and obtain analytical insights. This process includes discussions with industry experts such as vice presidents, business development managers, market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the insurance third-party administrator sector.