Engle Martin’s Beene says TPA industry “booming” with MGA, E&S market explosion

Engle Martin’s president has said the flow of business into the MGA channel means the claims outsourcing business is “booming”, citing the transportation, construction and renewables segments as providing the most opportunity.

Speaking to The Insurer TV at last week’s WSIA Underwriting Summit in Phoenix, Arizona, the Atlanta-based third-party administrator(TPA)’s president Stephen Beene also commented on the use of AI in claims-handling.

Asked to sum up the current state of the TPA market, Beene said the segment is “booming”, pointing to new programs being launched as providing “a lot of opportunities”.

“[That] really puts a premium on putting your best foot forward and being ready for those opportunities to come in the door,” he commented, saying the firm’s goal at the WSIA event was to learn about new programs coming to market.

“The outsourcing we see continues, where you have specialty underwriters coming together with the MGAs, building out these programs, and they're doing what they do well, which is underwriting,” he explained.

“And they want to source the claims to an outfit like ours and other folks in our space. So, what we see there is really those new specialty programs coming down the pike and us being able to take advantage of that as a TPA operation,” he added.

Transportation, construction, renewables among segments offering opportunity

New opportunities Engle Martin is seeing include those in transportation, construction and renewables, as well as “some” liability opportunities.

“I think in terms of where we're seeing more activity on the transportation side, we see a ton of activity there,” he commented.

“So, really across the board, the hard market, obviously playing a factor there, where we're seeing a lot of new specialty business coming in the door,” Beene explained.

The absence of a major US landfalling hurricane in a populated area last year gave the TPA an opportunity to increase its focus internally, close out previous claims and “be ready” for the next major wind event.

Other trends Beene highlighted include an increase in deductibles driven by the hard market, which means in some cases fewer claims for the TPA to adjust.

Beene said Engle Martin distinguishes itself with the talent the firm has on hand to service claims and its ability to handle complex claims.

“You've got co-led facilities and programs that really require an expertise – not just around the claims handling – but really with the claims management and account management associated with that,” he said, noting that the firm has 450 field adjusters around the country.

“So, we feel like that combination of talent behind the desk and you have the desk-field combination [that] really gives us a leg up in terms of service and our clients,” he observed, while also pointing out the TPA’s investments in technology.

Beene said private equity is continuing to invest in the TPA segment, which is driving consolidation, while investments in AI to drive claims-handling efficiency are also on the rise.

“For us, we feel good about where we're at, and we're two years into our acquisition of Synergy, which is our TPA, and I feel like we're positioned well with competitors to make the next step,” he said.

Beene also said AI is “a factor already” in influencing claims-handling processes and as a potential exposure.

“I think it's happening already in our business and some other businesses where we're using AI to really make ourselves more efficient on some of the back-office processes that we do, really, in an effort to allow the value-added work to happen by our adjusters,” he explained.

Beene said he envisions AI as “complementing” existing parts of Engle Martin’s business, rather than contributing to dislocation.

“We're in the third inning of a nine-inning game there. It's a heavy commitment for us as a company entirely at Engle Martin, but also at Synergy our TPA as well,” he commented.