IBISWorld, a market research firm serving many industries, has released a new report detailing the challenges facing the dental insurance industry as well as its successes over the past five years. Dental insurance is a rarity in the U.S., accounting for just 7% of all active insurance policies found in the country. While some of this may be due to persistent fear regarding dentistry from consumers, insurers claim that much of the industry’s shortcomings come from a bad economy and rising costs in medical care.
The report shows that dental insurance has been in a weak state for the past five years. The industry, as a whole, has been trying to manage the strain of growing health care expenditures and employers canceling the dental plans of their workers. These factors meant that the industry only experienced 2% revenue growth from 2007 to 2010. Despite these problems, however, the report suggests that the industry could be entering into a period of rapid revenue growth due to promising trends in the economy.
The report notes that unemployment is dropping steadily. As more people find jobs, they also gain the ability to insure themselves, thus seek out dental insurance policies. Insurers are likely to see more growth from raising the premiums for their dental plans as well, though this is primarily a tactic to keep up with the pace of medical services inflation.
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