The Asia Pacific’s insurance third – party administrator (TPA) market is anticipated to achieve the highest compound annual growth rate (CAGR) of 8.9% by 2030. This growth is being spurred by the twin factors of increasing healthcare costs and rising disposable incomes in the region, as per Allied Market Research.
Globally, the TPA market, which generated $280.69 billion in 2020, is projected to reach $514.98 billion by 2030, with a CAGR of 6.3% from 2021 to 2030. TPAs play a crucial role as intermediaries between insurers and policyholders. They streamline claim settlements and enhance service quality, especially with the mounting demand in the health insurance sector. The growing acceptance of TPAs in health insurance and the necessity for improved operational efficiency and transparency are the main drivers of market expansion. However, issues related to data security and privacy present hurdles. Technological progress in TPA services, such as cloud – based solutions, is expected to open up new opportunities.
In 2020, large enterprises dominated the global TPA market, holding nearly two – thirds of the share, as they aimed to manage risks arising from regulatory changes. On the other hand, small and medium – sized enterprises (SMEs) are forecast to have the highest CAGR of 7.4% until 2030, as more SMEs are opting for TPAs to administer self – funded benefit plans. North America led the market in 2020, contributing nearly 60% of the total revenue, thanks to the extensive use of health insurance and a conducive regulatory environment in the US. The report underlines the increasing importance of TPAs in simplifying insurance procedures and resolving challenges, setting the stage for a period of significant growth in the coming decade.
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