The Third-Party Administrators and Claims Adjusters in the US Industry Market Research Report from IBISWorld has Been Updated

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The US Third-Party Administrators and Insurance Claims Adjusters has recently experienced declines due to the 2008 financial crisis and subsequent recession, the industry is poised to recover as demand from downstream markets increases. For these reasons, industry research firm IBISWorld has updated a report on the Third-Party Administrators and Claims Adjusters industry in its growing industry report collection.

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Growth in claims adjustment outsourcing and demand for advisory services will drive revenue

The US Third-Party Administrators and Insurance Claims Adjusters industry plays a critical role in the insurance and funds sectors by allowing businesses to outsource claims processing and to fund administration and risk management. “Since 2000, the industry's growth has been driven by a steady increase in outsourcing activities within the insurance and pension fund sectors because operators have looked to cut costs to improve profitability,” according to IBISWorld industry analyst Doug Kelly. Additionally, industry firms have benefited from an increase in demand for risk management and other insurance advisory services.

In the five years to 2013, revenue for the Third-Party Administrators and Claims Adjusters industry is expected to decline at a 1.9% average annual rate to about $46.9 billion. The 2008 financial crisis and subsequent recession caused steep drops in insurance and employee-benefit plans assets, the total number of funds and the volume of plan participants, all of which negatively influenced industry fees. In turn, industry revenue earned from providing services to insurance and employee-benefit funds contracted. At the same time, demand from primary insurers (e.g., property and casualty, health and medical and life insurers) for claims and associated actuarial and consulting services declined as a result of lower underlying business activity, high unemployment and volatile financial markets. “Though revenue rebounded in 2010,” says Kelly, “growth has since been due to slow growth in insurance industries and volatile financial markets as the overall US economy continues to work through the economic cost of the recession.”

Over the five years to 2018, industry revenue is expected to increase as insurance industries' demand for claims processing and administration services picks up. Higher downstream demand for industry services will be supported by economic growth and increases in employment. New financial sector regulations will pressure insurers' profitability and increase claims and administrative outsourcing to industry firms, adding to this increased demand. Meanwhile, a renewed focus on risk management by insurers, as well as employee benefit and insurance fund administrators, will boost demand for industry risk advisory and actuarial consulting services.

The US Third-Party Administrators and Insurance Claims Adjusters industry has a low level of concentration and a high level of fragmentation. The top three players account for less than a quarter of industry revenue, which is up from 2008 due to consolidation among larger industry players, but still at a low level. The risk management and consultancy sector of the industry comprises the three largest industry players, Marsh & McLennan Companies, Aon Corporation and Willis Group Holdings, while other sectors of the industry are more segmented. Risk managers and insurance consultants benefit from economies of scale since they need information and sophisticated models and analytics for their operations and recommendations. In contrast, claims adjusters, appraisers, examiners and investigators need strong knowledge of local markets since these firms make determinations of damage and liability related to insurance policy coverage and claims.

For more information, visit IBISWorld’s Third-Party Administrators and Claims Adjusters in the US industry report page.

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IBISWorld industry Report Key Topics

This industry is composed of three segments: claims adjusting; third-party administration of insurance; and pension funds and insurance consulting and advisory services. The first segment includes investigating, appraising and settling insurance claims; the second consists of claims processing and administrative services; and the third focuses on insurance advisory or risk management operations. Insurance brokerage and sales are not included in this report

Industry Performance
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Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
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Globalization & Trade
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Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
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Major Companies
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Key Statistics
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Annual Change
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About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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