Third Party Insurance Software Development- Market Growth
Based on combined data on overall digital insurance platform growth, growth of third-party administrators in the insurance space, and overall insurance market growth, the growth within the software development market for third-party administrators in the insurance industry is likely approximately 13.7%. Growth drivers included the adoption of Internet of Things, increased focus on customer-centric strategies within the insurance space, and need within the insurance industry to outsource processes while cutting operation costs and increasing efficiency.
Market Growth by End-User
- The digital insurance platform market which includes insurance software development, had an estimated annual growth rate of 13.7%.
- The market is segmented by three categories of end-users; third-party administrators, insurance companies, and aggregators.
- However, the growth rate specific to each end-user segment was not publicly available.
- This market is projected to reach $164.13 billion by 2023, up from $78.47 billion in 2017.
- While this figure represents the global growth, the US accounts for approximately 39% of the overall insurance software market, with growth rates in the US mirroring global growth.
- Growth is attributed to the adoption of Internet of Things (IoT) within industries, an increased focus on customer-centric strategies within the insurance space, and an increased awareness of the benefits of digitalizing channels amongst insurers.
Growth of Third-Party Administrators
- Given data was only available for the overall digital insurance platform market, we've also found data to triangulate how this growth would vary for the third-party administrator segment as a whole, as compared to the overall insurance market.
- The growth of revenue generated by third-party administrators in the insurance space had a growth of 4.7% in the five years leading up to 2019, including all sectors of insurance.
- Growth was caused by need within the insurance industry to outsource claims processing, administrative services and risk management while cutting operation costs and increasing efficiency.
- This mirrored overall growth in the space, with the global insurance market having a growth rate of approximately 4.48% between 2018 and 2022.
- Given the growth of third-party administrators in the insurance space increased at a similar rate to the insurance space as a whole, we can deduce that the annual growth rate for the third-party administrators segment would be similar, if not slightly higher, than the overall growth rate of 13.7%.
Other Relevant Data
- The life insurance administration SaaS market has a projected growth rate of 13% between 2018 and 2026.
- There are a total of 137,944 third-party insurance administrators in the US.
- Industry revenue for third-party insurance administrators was estimated at $256.3 billion in 2019.
- Increasing concerns around cyber security will further increase the need for software development aimed for third party administrators in the insurance space, with third parties needing cloud services and data systems that meet regulatory standards.
In order to determine the growth of the insurance software development market for third party administrators in the insurance industry, we searched market reports, industry news related both to third-party administrators and insurance software development, as well as press releases and other relevant business media sources. Because the market size by user end-segment was not publicly available, we triangulated data to determine whether the growth of the insurance software development market as a whole was likely to mirror the growth rate of insurance software development for third-party administrators. Given this segment and the market as a whole had similar growth rates, we were able to estimate a growth rate of the insurance software development market for third party administrators of 13.7%.