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Six Reasons Why Digital TPAs Are Accelerating the Digital Journey for Insurance Companies

Blog: Capgemini CTO Blog

Third-party administrator (TPA) services have been around for quite some time, and while there has been consolidation and change of ownership in the industry, improvements in service design and value creation have been rather slow and incremental. Despite the “no brainer” business case for insurance companies to outsource their administration to a TPA and the potential for the release of reserves, adoption rates are extremely low.

While traditional TPAs continue to deliver value to insurance companies, the timing is right for the evolution of Digital TPAs focusing on breakthrough innovation in customer experience and significant reduction in administrative spend. Insurance companies are now seeing the opportunity to fast track the Digital journey across their business by leveraging the significant investments into IT and platforms made by TPA service providers, which is leading to further consolidation of the industry.

With this in mind, there are six compelling trends that characterize and differentiate Digital TPAs:

In essence, Digital TPAs are focusing on the specific business outcomes that have eluded the industry until now – a paperless environment, jet issuance, rapid product launches, electronic claim payments, robotics-led conversions, straight-through claims processing up to 99% for structured products, increased adoption of digital customer engagement channels/self-service adoption, and a flexible execution approach based on characteristics of the insurance block, as opposed to a “one size, fits all” approach adopted by traditional TPAs.

This transition and disruption in the industry is being driven by a few technology-enabled Digital TPAs, which calls for even closer collaboration between insurers and TPAs to drive administration spend down to a historical low and enhance customer experience for policyholders, providers and members.

Click here to learn more about Capgemini’s viewpoint on disruptive trends and innovation in the front-, middle- and back office of a Digital TPA company.

And keep your eyes peeled for six more blogs each of which focuses on a different trend!

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