As managing director of Denplan, Steve Gates (pictured) is used to being the boss of a company within a company.
After all, the dental payment plan specialist, which was set up by two dentists back in 1986, has been part of AXA PPP healthcare since the insurer acquired it in 1993. That was until December of last year when it was announced that AXA had sold the organisation to Simplyhealth, the mutual cash plan and private medical insurance (PMI) provider, for £115m on a debt-free cash free basis.
And Gates, who has been managing director of Denplan since 2001, says he is comfortable in the new organisational structure in which he finds himself.
In fact, when I speak to him following news of the acquisition, he is at pains to stress that it will be “business as usual” for Denplan and its dentist and broker partners and, of course, for its customers.
“We were previously a very self-reliant business within AXA,” Gates explains, adding that he is not aware that Denplan’s new owner has any plans to shake things up.
“Simplyhealth has bought a number of different businesses that have continued to operate as self-sufficient businesses within the group,” Gates continues, pointing to brands such as BCWA which have been integrated within the Simplyhealth group over recent years.
The path to today
Last year’s announcement that Simplyhealth intends to purchase Groupama’s UK PMI business means that Denplan is going to remain part of a heavyweight insurer with a broad remit across healthcare. But why did AXA not want to retain Denplan which, after all, has grown to have over 6,500 dentist members and approximately 1.8 million patients across the UK?
The official line is that AXA wants to focus on providing PMI and associated medical services to individuals and businesses and since selling its traditional life and pensions business, AXA has refocused its UK operations in four core areas: personal and commercial insurance, wealth management and healthcare.
Simplyhealth, meanwhile, has previously told Health Insurance that it remains focused on generating scale across the broader healthcare landscape. As part of that drive, there are no plans, Gates says, to make wholesale changes at Denplan.
Brand will remain largely the same – although there may of course be reference to Simplyhealth in logos and literature – while there will be no changes in personnel as far as brokers are concerned, with Pam Whelan continuing in her role as corporate sales manager.
“It will be exactly the same team providing the same service,” Gates says. “There are no redundancies, no people changes.”
In any case, even prior to working within AXA – somewhere where he enjoyed “really quite a lot of freedom” as a MD – Gates has had experience of working for a business unit within a larger parent company when a spell at Norwich Union (now Aviva) saw him involved in the setting up of the provider’s healthcare business.
A spell as director of marketing in 1999, followed by a six month secondment in sales at one of the other AXA group companies was then followed by his appointment as MD of Denplan in 2001. It is a role previously held by 2011 Health Insurance Personality of the Year Chris Horlick, who is now managing director of long-term care provider Partnership, and it is a career path that Gates says he has enjoyed. But what achievement is he most proud of?
“It’s probably been around growth,” he says. “By that I mean we’re probably now two and a half times the size that we were ten years ago on the dentist side of the business while the employee benefits book is probably four or five times bigger than it was ten years ago.”
Denplan has a number of strands to its business, including a bedrock portfolio of capitation and other types of payment plans designed for dentists to offer to individuals. In addition to products designed specifically for schools and children, it also offers loans to pay for dental treatment and, perhaps surprisingly, it works with vet practices to offer preventative health plans for pets.
Of course, Health Insurance readers will no doubt be more interested in the corporate dental cover Denplan provides for employee benefit schemes. Recent years have seen Denplan step up its marketing efforts with employee benefit consultants (EBCs) and other intermediaries and those efforts have been rewarded with it scooping the Health Insurance Best Dental Plan Provider Award for two years running.
“We’ve focused on growth but with customer service as well,” Gates says. “There are companies that manage growth and yet they take their eye off actually looking after their customers. One of our big challenges has been how you achieve growth while keeping that level of customer service as high as possible.”
With this in mind, January sees the launch of what Gates says will be a “fully online” claiming system which will enable employees to submit a claim online, track where it is online and then receive payment online as well. He hopes it is the type of offering which will also appeal to intermediaries, the channel which delivers two thirds of its employee benefits business.
It is clearly a fundamental part of Denplan’s strategy. While brokers are “hugely important” for Denplan, he concedes that the provider has struggled outside of its core SME client base.
“If you look at the make-up of our portfolio, we are quite heavily represented on the SME side,” he says. “You could say that we started our growth by developing relationships with what I would call the bigger regional brokers.”
The past two to three years has seen Denplan also begin to focus on meeting the needs of the larger EBCs too.
“We are probably number one in the SME side by by quite a big margin actually,” he says. “In the large corporate market we are probably more like number two or three and some of that has been down to the way that our products were designed.”
While Denplan had products that were “easily understandable” and “very easy to claim on” they did not in fact “quite fit” the needs of some of the larger EBCs, Gates continues.
“In other words, they wanted to be able to line up the benefit limits against all of our competitors,” he says. “Up until last year we weren’t ever really able to show EBCs in particular how our products lined up.”
The launch last year of Denplan’s Lucent range has, Gates argues, opened up conversations with some large companies.
“We are now starting to see where Lucent is opening a bit of a door for us,” he says. “If they want to take Lucent, absolutely brilliant, we are very comfortable with that, if they want one of our other products, again, we are equally happy for them to use those.”
Gates remains unapologetic that Denplan’s products might seem at first glance to be very similar to those of other providers in the market.
“Competitors probably have some products now which look a bit like our products and we probably now have a range of products that look a bit like their products,” he says. “I think rather than be polarised, we’ve all learnt a bit off each other. Your point is right, they are more comparable because we were finding it so difficult to communicate with brokers and EBCs the benefits of what we felt our products were at the time.”
Gates believes that Denplan now has the “right” product range in place and the focus is now on customer service.
“For us it’s about enhancing the service even further – and I think online is a key piece – and continuing to build ever stronger relationships with brokers and EBCs,” he says. “They remain an absolutely fundamental part of our business plan for the future which means that we need to know and understand what it is that they want us to do.”
Part of that commitment has been the launch of Denplan’s annual survey of employer attitudes to dentistry, an initiative which aims to arm intermediaries with market knowledge and key facts to impress and reassure clients.
“Companies want to know that they are dealing with a broker that understands dentistry and some of its intricacies as well,” Gates says.
Top of the dentistry agenda is of course both the future of NHS and private provision as well as a review of the market by the Office of Fair Trading (OFT). While Gates understands the importance of the issues, he does not predict “massive” changes to dental provision in the UK in the short-term.
Gates does suggest, though, that while the “grey area” between private and NHS provision needs to acknowledged, as do issues around NHS contracts, Denplan is well-placed to respond.
“From the employee benefits point of view we’re not really too worried about distinguishing between private and NHS dentistry on the basis that we have products that cover both,” he says.
So for now, the focus remains on carrying on as business as usual while the integration into Simplyhealth proceeds. Gates dismisses suggestions that Denplan’s offering will come into competition with Simplyhealth’s cash plan offering which, like the majority of cash plan providers, offers a range of dental benefits.
In fact Denplan used to provide administration services for AXA PPP’s direct-to-consumer cash plan and the provider’s salesforce rarely came into competition with that of its parent either in terms of cash plans or PMI on a direct or intermediated basis, Gates says.
“The benefit that we’ve got is that our product sets are sufficiently different so there will be clear blue water between the two of us,” Gates says. “For the foreseeable future we will be selling Denplan products separately to Simplyhealth’s. The products are sufficiently different to be able to do that.”
But what of the non-foreseeable future? Gates says he has two clear aims in mind: “The message from Simplyhealth is ‘make sure you deliver your 2012 plans and you engage with us’.”
Gates has done it before and he knows the market will be watching to see if he can do it again.
Steve Gates: Biography
After seven years at Norwich Union, Steve Gates joined Denplan in 1995 as marketing manager. In 1999 he became director of marketing and strategy and in 2001 he was appointed managing director. As Denplan’s managing director, Gates is responsible for the overall strategic direction and growth of company activities, both in association with the Denplan Board and other senior management team members. He works particularly closely in areas of new product and business development, while maintaining hands-on links with the dental profession, as well as harnessing the strengths and benefits of the relationship with Denplan’s parent company Simplyhealth.