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Buyers of insurance claims processing services face high switching costs, but they are also aided by low market share concentration and a high availability of substitutes. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has added a report on the procurement of Insurance Claims Processing Services to its growing collection of procurement category market research reports.
Los Angeles, CA (PRWEB) June 26, 2014
The buyer power score for insurance claims processing services is 4.0 out of 5, signifying that buyers have a medium level of power in the market. According to IBISWorld procurement analyst Kayley Freshman-Caffrey, while high switching costs hurt buyer power, low market share concentration and a high availability of substitutes mitigate this harm. High switching costs characterize the market because buyers are obligated to contract with suppliers for two or more years. It is necessary for buyers to commit to this period of time to allow their supplier to become accustomed to their systems and claims practices. For this reason, buyers that aim to switch suppliers face a variety of expenses such as learning costs, performance risk and financial penalties. These probable costs make it difficult for buyers to switch, disadvantaging buyers by limiting their ability to obtain a new supplier if their current one is not performing to their standards.
Low market share concentration alleviates some of these ills. The low degree of market concentration indicates that no single supplier dominates the market, which means buyers have a wider range of suppliers to choose from during the selection process. Because market share is spread among many market firms, competition among suppliers is intense, says Freshman-Caffrey. Intense competition pressures suppliers to keep their prices low to prevent their customers from taking their business elsewhere.
A high availability of substitutes further aids buyers by giving them a range of options they can use to process their claims. The existence of such alternatives erodes the price of insurance claims processing services. Overall, the positive effects of low market concentration and the availability of substitutes balance the high switching costs to give buyers a moderate amount of negotiating power. The four largest vendors in the insurance claims processing services market are Accenture, Computer Sciences Corporation, NTT Data Corporation and Infosys Technologies Limited.
For more information, visit IBISWorlds Insurance Claims Processing Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of insurance claims processing services. Insurance claims processing services aid buyers in reducing the costs associated with their claims management system by outsourcing the process to a firm with competencies in the field. The services provided by these firms involve front-end claims acceptance, data entry, claims pre-adjudication, claims adjudication and adjustments, coordination of benefits processing and explanation of benefits (EOB) processing. These services can benefit various types of insurers, including life insurance carriers; health and medical insurance carriers; and property, casualty and direct insurance carriers. This report does not include services that assist with the distribution of retirement and pension funds.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorlds procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement 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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