Insurance premiums are forecast to grow in response to a rise in demand, input costs and increases in supplier pricing power underscored by market consolidation
Los Angeles, CA (PRWEB) January 21, 2015
The buyer power score for group dental insurance is 3.9 out of 5.0, indicating moderate buyer power. Specifically, this buyer power score level suggests buyers have slightly more leverage during negotiations than suppliers, says IBISWorld analyst Kayley Freshman-Caffrey. A primary factor underscoring buyer power is the availability of substitutes. Instead of buying a group dental insurance policy from an insurance carrier, buyers can purchase a discount dental plan, set up a direct reimbursement plan or forgo insurance altogether. The availability of these substitutes benefits buyers by eroding the price of group dental insurance.
Another market attribute that helps buyer power is low demand driver volatility. Low demand driver volatility indicates that demand for group dental insurance is steady, which limits the extent to which insurance premiums fluctuate based on demand shifts. Consequently, price volatility for group dental insurance is low, which allows buyers to more accurately budget for the costs of their group dental insurance policy, continues Freshman-Caffrey. Low price volatility also reduces the probability of extreme price spikes or dips that negate a buyer's ability to make informed purchasing decisions.
Alternatively, a number of market characteristics reduce buyer power, including market concentration and supply chain risk. Neither of these factors is detrimental to buyers, but collectively they lessen the amount of power buyers have in the market. First, market concentration is moderate, reflecting the influence of top suppliers such as UnitedHealth Group Inc., MetLife Inc. and Aetna Inc. Moderate market concentration tempers competition, which hurts buyers by reducing the extent to which suppliers feel obligated to offer low prices. Market concentration is expected to increase in the coming years, exacerbating this issue. Secondly, supply chain risk among suppliers is moderate, which raises the probability of delays in the fulfillment of the buyer's claims. However, the positive effects of the high availability of substitutes and low demand driver volatility overpower the negative impacts of moderate market concentration and supply chain risk to give buyers a high level of power. For more information, visit IBISWorld’s Group Dental Insurance procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of group dental insurance. Dental insurance involves the transfer of responsibility for dental care costs from an individual to their insurance company. By purchasing dental insurance, buyers can reduce the amount they pay for dental procedures by 50.0% to 100.0% depending on the benefits they receive. Although dental insurance covers individual beneficiaries, group dental insurance policies allow companies to provide coverage for all of their employees. Suppliers of group dental insurance include large providers, small providers and state-sponsored providers. This report does not cover health insurance, discount dental plans or direct reimbursement dental plans.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.