The TPA industry is undergoing a rapid transformation. Our latest deep dive analyzes India’s largest TPA, shedding light on its growth trajectory, business model, and market potential. Medi Assist, leads the way with 40% market share 1.7bn$ premiums under management! Medi Assist has used its power as TPA to a build a strong network over the years and focus on customer experience.
From understanding the role of TPAs in the healthcare ecosystem to identifying untapped opportunities, this analysis is a must-read for VCs, health insurance companies, healthtech, insurtech, and HR tech startups looking to navigate this dynamic space.
Overview of the TPA Sector
The TPA or third party administrator is an IRDAI permitted insurance intermediary that provides operational services in relation to a health insurance policy. The range of services provided by a TPA can include: enrolling individuals to health insurance plans, customer support, developing a provider (hospital) network, claims management. They don’t carry the risk but act as an intermediary to support insurers with operations of risk management, claims being a major component.
In India, we currently have 16 registered TPAs (TPAs need a registration from the IRDAI), with Medi Assist being the biggest one.
Medi Assist – The Largest TPA by Market Size
The numbers overview from FY23 Annual Report is here (recommended to re-read after reading business model assessment)
FY 23 Annual Report Numbers
- Premiums Under Management: $1.7 billion
- Revenue: $60.5 million, 28.2% y-o-y growth
- PAT for FY23 – 9mn$, PAT y-o-y growth
- Value of Claims Processed: $1.6 billion
- Provider (Hospital) Partnerships: 14,000
- Claims Initiated: 7 million
- Insurer Tie-ups: 36
- Corporate/Startup Tie-ups: 9,500
- Cities with Network Hospitals: 967
- Countries of Presence: 141
Medi Assist has also acquired 3 TPAs in Indian market (Medvantage, Rakhsha & Medicare), in addition to a global health benefits platform – Mayfair We Care. It currently dominates the TPA market with 40% share.
Business Model
Medi Assist offers policy & claims administration services for both group & retail health insurance policies. This means it ties up with – a. insurers; b. employers (corporates, startups providing health insurance to their employees). The tie-up is also to utilize Medi Assist’s network of hospitals for cashless claims and other ancillary services. Medi Assist has 14k hospitals in its network!
Once the tie up is in place, Medi Assist becomes the POC for policy administration, or claims related requests raised by the policyholder/customer/employee, without any interference by the corporate/Insurer.
However, do note that the final call as to claims approval & settlement is taken by the Insurer in all cases.
Medi Assist has its own member benefits and claims platforms that can be used by the customer throughout the policy period. The benefit to insurance companies & employers is two-fold, operational – to save costs & time, and policyholder experience – ancillary services such as cashless settlement + value added services, like, providing ambulances, lifestyle management etc.
Benefits Platform
The provision of benefits platform to corporate employees helps the HR function to manage employee benefits, provide wellness management & manage rewards etc
Enterprise SaaS to Insurers
Medi Assist also provides SaaS solutions to Insurance Companies. These solutions range from operations, to claims processing to fraud detection.
Revenue
For FY23, the company earned nearly 75% of its revenues (75% of 60.5mn$) from group insurance schemes – and roughly 11% each from retail and government-sponsored schemes.
Market Opportunity
The Medi Assist market opportunity based on the business model, can be under four broad categories: Health Insurance, Healthtech, HR Tech, Insurtech
Health insurance market size:
- The health insurance market (gross written premium) is set to reach 90bn$ by 2024. The GWP is anticipated to experience a CAGR of 6.76% between 2024 and 2028.
- This growth trajectory is expected to culminate in a market volume of 116bn$ by 2028.
- Furthermore, the average spending per capita in the health insurance market is estimated to be 62$ in 2024.
Healthtech market size: The Indian healthtech market is projected to reach 25bn$ by 2025
HR Tech market size: The Indian HR tech market size was $23.32 billion in 2021 and it is projected to reach $38.36 billion by 2030, growing at a CAGR of 5.7 percent from 2022 to 2030
Insurtech market size: India’s InsurTech sector is expected to grow by 17% annually to reach $307 Bn by 2030
Conclusion
The TPA sector is pivotal to the smooth functioning of the Indian healthcare ecosystem. Medi Assist has emerged as a dominant player due to its strong network, technological capabilities, and customer focus. The growing health insurance market presents significant growth opportunities for TPAs. The convergence of healthtech, HR tech, and insurtech will reshape the industry landscape.
References:
- Statistics on India health insurance market
- MediAssist Annual Report available here
- Healthtech stats here
- HR Tech stats here
- Insurtech stats here
