Third Party Administrators
I have worked with third-party administrators since the beginning of my career in the late 1970’s.
Those who own and manage TPA’s are some of the most innovative and entrepreneurial people in the insurance industry. Many TPA’s do everything that an insurance company does except assume risk. However, their business depends upon the financial success of the programs they administer. Thus, a TPA is usually taking risk whether they want to or not.
Every TPA must deal with insurance companies. Those insurance companies generally have an actuary on their side of the table. Negotiations are much more likely to be successful if the TPA has an actuary on their side of the table as well.
Some large TPA’s have an actuarial staff. However, an in-house actuarial staff is certain to cost at least $300,000 per year. Even then, actuaries who work full time for TPA’s often don’t have the experience and credentials that are needed. The preferred alternative for most TPA’s is to work with consulting actuaries. However, working with a large consulting actuarial firm can be more expensive that maintaining and in-house staff. Further, the large firms often don’t have the entrepreneurial orientation that is needed.
I enjoy working with TPA’s, and I can provide references to long-time clients who can attest to the value that I have added to their organization.
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