Prudential Financial’s Move to Dental Insurance Part of Strategy on Voluntary Benefits

Copyright 2010 A.M. Best Company, Inc.All Rights Reserved BestWire

February 23, 2010 Tuesday 02:25 PM EST

544 words

Prudential Financial's Move to Dental Insurance Part of Strategy on Voluntary Benefits

Fran Lysiak

NEWARK, N.J.

Prudential Financial Inc.'s move to offer dental coverage is part of a strategy by its group insurance business to expand voluntary employee benefits offerings to employers.

The second-biggest U.S. life insurer plans to offer dental coverage plans to employers, after forming a partnership with Group Dental Service Inc., a dental administrator affiliated with national managed care company Coventry Health Care Inc. (NYSE: CVH). Group Dental's network includes 130,000 provider locations (BestWire, Feb. 22, 2010).

Laurita Warner, a spokeswoman for Prudential (NYSE: PRU), said offering dental insurance in an employee benefits package allows employers to enrich voluntary offerings that are becoming popular today.

By offering voluntary coverages, employers offer their employees the ability to select the insurance that's right for them, tailored to their stage of life -- at group rates, she said.

Unlike traditional group insurance, where an employer pays some portion of employees' premiums, voluntary benefits -- although sponsored by the employer -- do not require the employer to contribute toward premiums. If an employee chooses to participate, the employee pays 100% of the premium through payroll deduction.

Dental insurance is new for Prudential's group insurance business, Warner said. However, because dental coverage was offered previously through its former Prudential Healthcare business, it's the first time this coverage is being offered since Prudential exited the health insurance business in 1998 to divest itself of a noncore business, she said.

Adding dental insurance to the group business isn't a re-entry by Prudential into the health insurance business, Warner said.

Ethan Foxman, president of Group Dental Service, said in a statement that the company will administer private-label dental programs, including network management and claims-payment services, to Prudential's clients (BestWire, Feb. 22, 2010).

Regarding private labeling, the dental product is branded and underwritten by Prudential, Warner said. The partnership with Group Dental allows Prudential to offer the network of 130,000 provider locations, she said.

Through its group business, Prudential said it will first offer preferred provider and indemnity dental plans to employers with plans covering fewer than 1,000 employees. It expects to start offering quotes to clients and producers in the second quarter for new business starting in the third quarter (BestWire, Feb. 22, 2010).

Prudential administers group insurance plans for about 7,200 clients with 25 to 999 lives, and these are the plan sponsors the company will initially be marketing the dental plans to, Warner said.

The alliance "further deepens our product portfolio and meets growing interest among employers to bundle dental insurance along with life, disability, and long-term care insurance," said Lori High, president of Prudential's group insurance business, in a statement (BestWire, Feb. 22, 2010).

Prudential Insurance Company of America currently has a Best's Financial Strength Rating of A+ (Superior).

Coventry Health and Life Insurance Co. currently has a Best's Financial Strength Rating of A- (Excellent)

(By Fran Matso Lysiak, senior associate editor, BestWeek: [email protected])

February 24, 2010

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