Unum Dental has secured the renewal rights for global health services provider Cigna Healthcare’s dental customers as the US-based insurer divests its UK dental business.
The move by Cigna is a continuation of a withdrawal from the UK domestic market. Last September Health & Protection exclusively revealed that the company was withdrawing from the UK domestic private medical insurance (PMI) and healthcare trusts market, although at that time the insurer said it was commited to its UK operation.
Unum said Cigna has communicated with intermediaries and clients about the divestment and will continue to keep them informed throughout the process.
Cigna will cease to quote on new UK dental products from 1 October 2023, Unum said.
“The decision is grounded in the two parties’ shared values of putting customers first and comes as Unum Dental experiences rapidly rising demand for its workplace dental cover,” Unum said.
“This rising demand is against a backdrop of high UK inflation and a cost-of-living crunch, all while dental costs have increased for basic and essential oral healthcare.
“Quotes for dental plans due to commence before this date will be honoured. For those contracts expiring on or after 30 September 2023, Cigna will be unable to offer renewals.
“Unum and Cigna are working in partnership to ensure that we support both intermediaries and their clients to transition to a new Unum Dental policy at renewal,” Unum said.
When approached for comment by Health & Protection, a spokesperson for Cigna said: “This decision aligns with Cigna Healthcare’s strategy to deepen its focus on global healthcare and health services, including its UK international health business, which is unaffected by this decision.
“Cigna will continue to serve the health needs of the globally mobile individuals, corporations, IGOs, NGOs, as well as providing targeted health offerings across the globe.“
Unum a ‘good home’
Consensus among industry experts approached by Health & Protection was that Unum was a good home for Cigna dental clients, but that losing another provider from the market was not necessarily the best outcome.
Claire Ginnelly, vice-chairwoman of the Association of Medical Insurers and Intermediaries (AMII), told Health & Protection that consolidation in the market was not good for the consumer or advisers as it means less choice.
“This announcement from Cigna follows on from the strategic review they carried out last year which saw them withdraw from UK PMI and trust business, although at the time they stated they remained committed to the dental insurance market,” Ginnelly continued.
“One has to assume they want to focus on the global arm of their business.
“I am assuming their decision is not related to the Bupa decision last year to sell some of their dental clinics. Bupa stated this was due to the national shortage of NHS dentists and rising costs which meant they couldn’t make the model work.
“The problem facing NHS dentists has been widely reported and more patients are being forced to go private.
“This probably makes the decision to take out insurance more attractive to both consumers and corporates, so there should be good opportunity for both advisers and insurers in this space, albeit choice has been reduced,” she added.
But Isaac Feiner, managing director of Lifepoint Healthcare, told Health & Protection that whether the consolidation in the market over recent years is good or bad remains to be seen.
“Ideally we want to have more choice to offer customers and the UK public,” Feiner said.
“However, I recognise that sometimes merging big firms and services together can improve outcomes for the end user.
“Unum is an excellent company and has had a very positive effect on its clients. So I am sure the strategy is well thought through and that this will lead to positive things.”
Steve Ellis, associate director at Prosperis, agreed, adding that Cigna’s dental book is in “safe hands” with Unum.
“This is perhaps the beginning of a move to fewer and larger providers offering a more holistic solution for employers?
“This feels like Bupa’s brief entry to the group risk market in the early 2000s. I expect more announcements in the not too distant future,” Ellis added.
Transition team set up
In terms of communicating the changes to clients, Unum said: “Cigna and Unum Dental have set up a transition team and a robust communications programme is in place to ensure that intermediaries and clients are kept fully up to date throughout the renewals process to enable a smooth transition and continuity of coverage.”
Glenn Thompson, chief distribution officer at Unum UK, said: “We are investing and growing in areas that reflect the needs and requirements of our customers and broker partners, and dental insurance is a key driver of our strategy and ambitious growth plans.
“Unum’s average payout per claim rose by 24% between 2021 and 2022, signifying the upward pressure on a range of everyday costs, including essential healthcare expenditure.
“We are one of the UK’s leading employee benefits providers and will be ensuring a smooth transition for new dental customers,” he added.
In April 2023, the cost of NHS dentistry in England jumped by a historic 8.5%, outstripping the increase in employees’ average pay that month by two percentage points.
The British Dental Association warned the cost is shaping how millions of patients make clinical choices about their oral health .
Unum said that it remains the only UK dental insurer with recognised product status from the Oral Health Foundation, and provides dental insurance to nearly 270,000 employees at close to 1,000 businesses.