NARS’ Ruryk: Rising specialisation means more claims need to be outsourced to TPAs

NARS CEO Robert Ruryk has said the increase in specialisation across the industry means the specialist expertise of outsourced claim handling is needed, while expressing relief over last year’s mild wind season, given strains TPAs could have faced.

The chief executive of the third-party claims administrator (TPA) was speaking to The Insurer TV on the sidelines of this week’s Target Markets mid-year meeting in Tampa, Florida, where he also said the TPA industry would have struggled with staffing levels in the event of Cat 5 hurricane.

“We have specialties in program business, whether it's a trucking program, garbage haulers, whatever it might be – we've done those. A lot of carriers haven't, right?” Ruryk explained.

“I mean, they are approached by an MGA and a reinsurance broker, and what happens? They put a program together [and] they think their claims company or their department inside is going to handle that, [but] most of the time, they don't know what they're doing there,” he commented.

“So it's helpful to have a TPA in those situations,” he added.

NARS launched as North America Risk Services in 1997 as a subsidiary of fronting company Clarendon, but was spun out and rebranded when that firm struggled.

“This is our preferred business model to be in,” Ruryk said of the programs market, where he said the TPA will often follow programs and MGAs to new carriers in the event that the capacity backing a program changes.

“TPAs can do self-insureds or risk captives, risk pools, whatever it might be. We have always grown and we've always been a part of the program space. That's our strength,” he explained.

“There's certainly some benefit to be added by that specialisation,” Ruryk continued.

“Just the knowledge that you have of the inner workings of whatever [product] it might be. The products that they're selling here at Target Markets – you know, these niche-ey types of programs – you have to have some knowledge of that,” Ruryk explained.

“No one would have enough staff”

Rruryk said he’s not seeing any broad trends of carriers taking claims-handling in-house, though he did say the industry was fortunate there was no major landfalling hurricane in 2023 in a densely populated area, as the TPA industry would have been short staffed.

That said, Ruryk explained that his company has a lighter cat footprint and tends to focus on liability lines.

“So, more of our adjusters and staff are dedicated towards liability lines and that type of physical damage,” Ruryk commented.

“That being said, even though it was kind of a quieter year, I would say, there were enough convection storms and all the hail storms and things like that, to keep the market fairly active, and, as you probably have heard, there's something of a staffing shortage,” he commented.

He explained that the lack of losses benefited the industry “because what would happen if we actually had a real event – when I say ‘real event’ I mean a Cat 5 hitting Florida or something along those lines, where we would not have enough staff,” he argued.

“No one would have enough staff,” he explained, adding that in that event TPAs might need to rely on auto adjusters looking to make some extra money.

Ruryk also discussed how his firm is working towards combating sky-high jury verdicts, which have become known colloquially as nuclear verdicts.

“We are doing everything possible and I'd imagine everyone in the industry is doing the same thing, with AI and trying to pick up those things, those little tidbits that might lead themselves to a bad outcome. So, you do what you can there and just keep adjusting the way we always are,” Ruryk commented.

Ruryk said NARS currently has about 550 people on staff, and has been growing at, “about 20 percent” as a result of providing a “concierge-type” service to clients.

“We're trying to be specialised, but provide that individual service,” he explained.

“I would like to see workers' compensation grow, because it is our smallest line of business and we've gotten to the point where we're really good at it,” he concluded.

Watch the full interview with NARS CEO Robert Ruryk to hear more about:

  • Why NARS has dedicated significant time and resources to the MGA space
  • How the adjusting market might adapt to a big cat event in the near future
  • The explosion in the number of attendees at Target Markets’ mid-year meeting
  • Whether Ruryk sees trends of claims being outsourced or moved in-house
  • How NARS thinks about cyber
  • And more…