Analysis: Individual dental cover - is there any money in it?

Cash Plans/Dental

Corporate dental schemes can be big business for brokers, but is there any money to be made from marketing cover to consumers? Sam Barrett reports

With a visit to the dentist becoming increasingly expensive, it’s not surprising that demand for dental plans is growing. According to Laing & Buisson, although there was a slight fall in the numbers covered by capitation schemes, demand for dental insurance schemes increased by 7.3% in 2010.

While corporate schemes have fared particularly well, some insurers are now turning their attention on individuals, with a flurry of activity in this part of the market. The last few months have seen the sale of Denplan to Simplyhealth to strengthen its healthcare proposition; and Bupa’s debut into the consumer dental insurance market with the launch of its Dental Cover 10 and 20 plans.

"We included dental in our Bupa by You medical insurance consumer proposition and we got such high demand for this that we decided to launch it on a standalone basis," explains Alastair Dornan, head of business development at Bupa.

The plan offers two price points, £9.40 and £13.40. The cheaper of the two, Dental Cover 10, is designed to provide a full refund for NHS treatment while the other plan is more suited to those with a private dentist, allowing them to claim up to £150 a year for routine treatment such as check-ups, x-rays and a scale and polish. With the more expensive plan, individuals can also claim up to 75% of the cost of any additional non-cosmetic treatment, up to a maximum of £700 a year, plus up to £5,000 a year for dental injury and £600 a year for emergency dental treatment. Both plans also include cover for oral cancer.

Dental competition

Although this is a new area for Bupa, other providers are also active in the individual dental insurance market. Simplyhealth has its Simply Dental plan, which was launched in 2006 and costs from £7.50 a month. This allows members to claim back a percentage, either 50% or 75%, of the cost of clinically necessary treatment with check-ups and x-rays fully covered.

"You have to have co-insurance on these schemes," says Howard Hughes, head of employer marketing at Simplyhealth. "Without this it’s not sustainable."

WPA has also been in the dental market for many years with its Providental plan which costs from £9.50 a month. Similarly, AXA PPP healthcare has a dental insurance scheme, which it launched last autumn. Like Bupa’s plan it has two levels, Core for NHS patients and Premium for those with a private dentist.       

Although the bulk of sales are direct, commission is available on some of these plans. For example while Simplyhealth will pay initial commission of 15% with 5% renewal, Bupa’s plan is only available direct to consumers.

Some of the big brands also knock out dental insurance. For instance Tesco has teamed up with AXA PPP healthcare offer core cover for £9.95 a month for NHS treatment and premium cover at £19.95 a month for private treatment. Boots also offers a dental plan which is underwritten by Great Lakes Reinsurance and starts at £9.75 a month.  

But although these high street names are jostling for business, sales of dental insurance schemes do remain low.

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