How does W. Dental enter the dental plan operator market?

According to data from the ANS, unlike health plan operators, which registered in 2022 a operating loss of R$ 10.7 billion, companies that operate exclusively dental plans have registered a positive net result of around R$ 700 million and a total revenue of R$ 4 billion. O Union of Insurance and Reinsurance Companies pointed out that, even though only 15% of Brazilians have dental plans, these operators have been expanding continuously, registering an average growth of 1.6 million lives per year in the supplementary dentistry market.

It is in this promising context that W. Dental, Healthtech Invested by Green Rock, she decided to act in early 2020. In an exclusive interview, Igor Pereira, founder and CEO of Odontotech, tells a little about his career with W. Dental. Initially, he reports that he and his partners did not come from the health area, but that they began to study this market and saw a very large digitalization opportunity. In the midst of research, Igor says that the dental insurance market has aroused interest in some issues.

“The first point that drew attention was that Brazil has the largest supply of dental professionals in the world. Around 20% of the world's dentists are here. On the other hand, we noticed that the penetration of dental plans was very small compared to other countries. When we started studying, we saw that about 12% of the Brazilian population had dental plans. Today that number is around 14%. When we look at more mature markets, we see that this potential can reach 80%, 90% of the population, so it's a very large market growth opportunity”.

In addition to this aspect of the incipient market and the possibility of capturing part of this growth, Igor observed that there was a great deal of dissatisfaction among beneficiaries with traditional dental plans, which are typically distributed with health plans. “We noticed that the beneficiaries found it very difficult to use the plan, to find dentists who attended to the plan, to perform procedures that went beyond more basic services such as cleaning. This generated a great deal of dissatisfaction,” she says. In addition to this user dissatisfaction, the founder of W. Dental states that the accredited members were also unhappy on many points, such as the delay in receiving and the disqualifications.

Still, within the market, a very large concentration was perceived in a few operators, which was also evaluated as an opportunity: “we see that often when there are few players with a large percentage of the market, they often end up settling for that leadership and don't have many incentives to improve the service, digitize and create a better experience for the beneficiary. So we also saw this as an opportunity to create a differentiated product.”

Based on this data, Igor saw a space to create a digital operator with a differentiated experience for a very large and expanding market. “Today Brazil has more or less 30 million beneficiaries and we understand that the potential of this market is for more than 120 million, which would be approximately half of the Brazilian population. And we see that the dental insurance market is growing regardless of whether the country is in crisis or is doing well. This caught our attention a lot, especially when we compared the data with health plans, which have basically stagnated since 2014.”

Faster payments and focus on user experience

In addition to the regulatory barriers that must be overcome in order to establish an operator, the founder of W. Dental points out that one of the central challenges was to thoroughly understand the pain and demands of beneficiaries and those accredited to offer a value proposition that would respond to them. Igor understands that there is still a sea of opportunities, but he understands that a primary demand that needed to be met was a faster payment: “in this sense, we paid for our entire accredited network within 30 days, which is an exception in this market and is something that was noticed by dentists”.

Regarding the beneficiary's demand regarding their difficulty in using the plans, W. Dental responded to this with a technological solution. Igor says that “today 98% of procedures are digitally approved at the time of consultation, expediting customer service and payment for the dentist”. In addition, it highlights the focus of Odontotech in the user experience. In this sense, the application is simple and has a functionality for classification by proximity and evaluation of other users in relation to dentists, directing the beneficiary to a better experience.

“We receive dozens of dentists every week who want to become accredited in our network. For us this is a sign that we are doing something different in the market. Dentists obviously have contact with each other, they talk about their experiences and as a reflection of this, our value proposition has been recognized in the market”, concludes Igor.

B2B focus and the preventive approach to health

Regarding W. Dental's next steps, Igor shares that Odontotech It has been focusing on B2B for a few months, on the understanding that this market has a larger growth scale, in addition to smaller default. This new focus triggered a series of changes in the company and its product, which could expand in the future to areas other than dentistry, according to him.

“If our focus today is on companies, we need to understand very well how they use the dental benefit, what the pain is and what our value proposition is to improve this service in companies. In this sense, HR became a key player in this equation. Once we understood that this would be our focus, we changed the strategy to develop a benefit management product for HR, obviously focused on dental benefits, but which could very possibly be expanded to other benefits, such as health, for example,” says Igor.

Thus, Igor reports that W. Dental is finalizing the development of a product that presents a series of dashboards of intelligence with data on the use of the plan by the beneficiaries. Based on this, HR has the capacity to engage users for preventive use of the benefit.

“We understand that preventive use is the best path for the beneficiary, for the accredited and for the company. Understand how users are using this benefit and direct them to a correct use based on this data and insights it's very relevant. This provides a tool for HR that doesn't exist in the market. Generally, there is only visibility about this when the plan is renewed,” Igor ponders.

The founder of W. Dental concludes by stating that the product aimed at individuals still exists and is currently growing more organically, but that the greatest investment effort and the team, in addition to the financial, commercial and technological focus, is focused on B2B.