Insurer seeks to bridge dental cover gap

Irish-born DeCare chief executive Mike Walsh sees a culture of dental insurance developing in Republic and hopes to get multinationals in the State on board, writes Una McCaffrey

There is something a little bit disarming about Mr Mike Walsh, the Irish-born US executive who helped the VHI to introduce its first dental care plan last week.

From across the room, he seems almost completely Americanised, with all of the wide smiles and hearty handshakes that are typically associated with the US business world.

He moves as if on wheels, always making eye contact with the appropriate person, always seeming to have the right thing to say on the tip of his tongue. He is the archetypal US salesman.

To write the Claremorris native off as only that, however, would be a mistake. Mr Walsh's talents extend much further than the ability to work a room and sell a bit of insurance.

He is president and chief executive of DeCare International, the US dental benefit firm that is now operating in the Republic. DeCare made profits of some $16 million (€13.1 million) last year on revenues of $663 million.

And Mr Walsh has retained a surprisingly Irish twang for a man who left his native Mayo for the US 33 years ago,

In fact, the only thing that marks him out from another Irish man of his age is probably his teeth, which are perfect, presumably as a result of good dental cover. This is in contrast to 52 per cent of Irish adults who do not have their own teeth, in case you were wondering.

Other facts of this nature were in plentiful supply at the VHI DeCare Dental launch last week, where Mr Walsh was in his salesman element.

When he joined Minnesota-based DeCare in 1987, revenues stood at less than $30 million and operations were in deep trouble. The turnaround has been his baby, with his aggressive business strategy taking no prisoners along the way.

The time has now come for international expansion, with DeCare's move into the Republic this week merely the first step in a plan to take over Europe.

Taking the Irish market first makes sense for the company, despite the Republic's small size in the wider context. Since 1998, DeCare has been operating a software development company to support its internal systems from Cork. This Irish presence was augmented in 1999 with the establishment of a claims-processing centre in (guess where?) Claremorris, giving DeCare a ready-made Irish backbone.

This latter facility employs 135 people, with a further 95 working in Cork. Mr Walsh says the Claremorris operation has a net gain of 15 new staff every month, with a total of about 270 workers to be in place within three years.

The DeCare dental insurance plans for the Irish market are structured in a similar fashion to regular health insurance, with the premium payable varying according to the level of desired cover. The cheapest family plan comes in at €11 per week.

Mr Walsh says the venture will "probably see a small loss in the first year" after signing up about 20,000 customers. The plan is then to move into profit over the following two years as the customer base is raised to about 175,000. Mr Walsh says these targets are conservative.

The start-up costs are shared in part with the VHI, which will, in effect, be DeCare's distributor. DeCare will at all times be the "licensed insurance entity", with VHI getting a cut from every policy sold.

Key to the growth strategy will be the development of good relations with the horde of multinationals that operate in the State.

The ideal for DeCare would be for dental insurance to be viewed as an expected benefit for an individual considering joining one of these companies. In this way, a culture of dental cover would develop.

It is clear that entering the Irish market is a big thing for Mr Walsh. He has personally negotiating the tax relief that the plans will carry with the Department of Finance.

"This Government really understands and wants to create private initiatives," he says.

The Tánaiste, Ms Harney is, according to Mr Walsh, a "genius" for appreciating the competitive model.

"I do have a certain amount of personal joy and interest that we are the party bringing the first dental policies to Ireland," is all he will say of the emotion attached to doing business in his home country.

As for making sure that DeCare group's claims-processing office is creating jobs in his home town, he says: "I'll never quite forget the emigrant trains out of Claremorris when I was a kid."

As things stand, tens of thousands of US dental insurance claims are sent to Claremorris each day (at close of business in Minnesota) and sent back to the US in time for start of business the following day.

It's all part of "feeding the monster", Mr Walsh remarks, as he muses on just how big that monster could become over the next few years.

After the Republic, the UK will be the next market for the firm, with continental Europe to follow. Mr Walsh says he will welcome the arrival of more dental assurers in the Irish market as it grows over the next few years.

"If we have competition, it's going to make us better."