The rapid increase in pet ownership in the UK since COVID-19 has highlighted the importance of pet insurance, but has the market kept up? In the first of this three part blog series, Shreyas Vasanthkumar, Managing Director, Europe, the Middle East and Africa, shines the spotlight on a sector ripe for transformation.
“A dog is the only thing on earth that loves you more than you love yourself”, or so the saying goes. It’s true we often don’t deserve the devotion of our dogs, but some of us definitely deserve the disdain of our cats, or the pure indifference of our stick insects!
There’s no hiding from the fact that we spend a lot of time and money on our pets. And as a nation of animal lovers, many in the UK took what positives they could out of the pandemic lockdowns and got a new pet. In fact, cat and dog ownership in the UK grew by around 63% and 39% respectively since the start of the COVID-19 pandemic – with 3.2 million households acquiring a new pet.
A low insurance penetration market
This rapid increase in pet ownership in the UK since COVID-19 has highlighted the importance of insurance. But how relevant is traditional pet insurance in the modern world? In 2021, a quarter of pet insurance policyholders were first time buyers, but there is overall low insurance penetration in this market with only around 25% of households in the UK having pet insurance.
And yet no-one is denying that most responsible pet owners seek to look after their companions – from dogs and cats to lizards, budgies and many creatures great and small – and want to give them the appropriate medical care and attention should the need arise.
The issue is that traditional insurance models have often left policyholders disillusioned and unhappy – hikes in premiums for older pets coupled with confrontational and painfully slow claims processes and often inadequate and delayed claims payouts have left many pet owners to turn their back on insurance, and hope for the best.
Change is in the air
The fact that 42% of pet owners feel that insurance is too expensive says it all really. The UK pet insurance market is ripe for change, and technology is driving this transformation. Insurers need to improve underwriting and improve pricing and claims processes to connect with buyers and make pet insurance more relevant and affordable again. Doing so will increase uptake.
With the help of modern core systems, insurers can offer competitive pricing by leveraging embedded analytics to price each individual risk properly and launch innovative products quickly to capture the enormous opportunity the market offers.
From binding coverage and policy inception to renewal and claims processes, technology can support the automated assessment of pre-existing medical conditions, and increase the detection of fraudulent claims to help increase transparency for underwriters and for policyholders.
Duck Creek’s low code core system and pre-built pet-specific accelerators are key to powering the kind of agility that insurers need to move quickly in this growing corner of the UK insurance market. Cloud technology architecture offers the ability to launch new products from a centralised platform faster than ever – fuelled by improved risk selection, enhanced pricing, improved data analytics and underwriting information enrichment during the quote journey.
Personalised user experience
Ultimately, providing policyholders with a personalised digital user experience, and making the insurance buying and claims process as seamless, relevant and accessible as possible – for instance by embedding insurance with registration at every veterinary clinic – can help transform this market and create a much better customer experience.
This will go hand in hand with risk mitigation and education campaigns, such as top care tips to help keep pets healthy, and reminders for regular check-ups with their veterinarian. We are excited to be supporting insurers in developing cutting edge products and services for the UK pet insurance market through our evergreen modern core systems, and playing our part in powering the change that is needed to help us provide our pets with the best possible care.
Duck Creek allows insurers to provide real-time access to policies, coverages and customer information 24/7, ensuring customers have access when they may need it most. Learn more here.
Also, check out our other articles in this three part blog series on Pet Insurance: UK Buyers of Pet Insurance highlight a static and ‘unfair’ market which presents significant opportunities for insurers to provide an holistic customer experience