Sedgwick Group announced this week that it has signed an agreement to purchase York Risk Services, continuing a long-term consolidation trend among third-party administrators.
The purchase of York — which must be approved by federal regulators — would mark Sedgwick’s third acquisition of a TPA in five years. The Memphis, Tennessee-based company purchased Cunningham Lindsey in 2018 and T&H Global Holdings, owner of VeriClaim, in 2014.
Sedgwick isn’t the only third-party administrator in a buying mood. Also on Monday, Fairfax Financial Holdings’ Riverstone subsidiary announced that it has acquired Rockville Risk Management Associates and its sister company, ER Quinn Co.
Sedgwick Group President Michael Arbour said during an interview that the purchase of York will enhance the company’s scope of services and improve its access to talent in the claims industry. He said York is active in some market segments where Sedgwick has little presence, such as with Longshore and Harbor Workers’ Compensation and Defense Base Act claims and the administration of group risk pools.
He noted that York also is in a strong position as a service provider for public agencies and provides managed care services for other claims administrators. Sedgwick also provides managed care services, but only to clients for whom it adjusts claims, he said.
“We’ve admired them as a friendly competitor for years,” Arbour said. “They do a lot of things that we do and they do a lot things that we don’t do.”
Joe Paduda, owner of the employer consulting firm Health Strategy Associates, said the merger of the two TPAs — both of which adjust workers’ compensation claims — is not surprising.
“There’s no question there will be more consolidation in the industry,” he said in an email. “Worker’s comp is a shrinking business and consolidation is a foregone conclusion.”…