Latest / Breaking the ICE / Episode 10 - The Future of Pet Claims and Underwriting

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Episode 10 - The Future of Pet Claims and Underwriting · Breaking the ICE

• 0:04
  SPEAKER_03: Hello and welcome back to the Breaking the Ice Podcast.
• 0:08
  SPEAKER_03: This is season one, episode 10.
• 0:10
  SPEAKER_03: Uh I'm once again joined by my co-host, Lloyd Overton, Mark Colonese.
• 0:14
  SPEAKER_03: Lloyd, Mark, how are you guys doing today?
• 0:16
  SPEAKER_02: Good.
• 0:17
  SPEAKER_02: Podcast on a Friday.
• 0:18
  SPEAKER_02: So yeah, I'm uh I'm kind of two hours away from uh two hours away from the pub.
• 0:23
  SPEAKER_02: Yeah, me too.
• 0:24
  SPEAKER_03: Can't wait.
• 0:26
  SPEAKER_03: Well, it's it's good that we've scheduled this episode for two and a half hours.
• 0:29
  SPEAKER_03: So um let me go grab a beer.
• 0:33
  SPEAKER_03: Yeah, yeah, yeah, yeah, yeah.
• 0:34
  SPEAKER_03: It's good to good to be chatting with you guys.
• 0:36
  SPEAKER_03: How's the week been?
• 0:37
  SPEAKER_00: Uh good.
• 0:38
  SPEAKER_00: Um busy, a lot of interest, getting some sort of um RFIs out the door, getting ready for an event next week, actually, relevant to what we're gonna talk about in a moment.
• 0:52
  SPEAKER_00: We've got a pet round table.
• 0:54
  SPEAKER_00: In fact, the pet round table will discuss many of these topics.
• 0:58
  SPEAKER_00: So um it's almost a warm-up event for for that discussion.
• 1:03
  SPEAKER_03: Yeah.
• 1:03
  SPEAKER_03: Yeah, fantastic.
• 1:05
  SPEAKER_03: Um as Marcus just alluded to, we're gonna we're gonna pick up on our conversation from last week.
• 1:12
  SPEAKER_03: Uh we'll do sort of uh the uh the sequel to our intro to pet.
• 1:17
  SPEAKER_03: And I thought I just thought there was a lot of topics that we could have gone into more detail with.
• 1:21
  SPEAKER_03: So um I, you know, I'm excited to to continue the conversation here.
• 1:27
  SPEAKER_03: Um before we get into it, I was at the um the NAFIA board meeting this week in Minneapolis, and it was uh extremely hot.
• 1:39
  SPEAKER_03: Uh the hottest it's I've ever felt it in Minnesota.
• 1:42
  SPEAKER_03: I didn't know it could get it.
• 1:43
  SPEAKER_00: It was just um telling our listeners what NAFIA is.
• 1:47
  SPEAKER_03: Yeah, the North American Pet Health Insurance Association.
• 1:50
  SPEAKER_03: Good one.
• 1:51
  SPEAKER_03: Um you know what?
• 1:53
  SPEAKER_03: And I I actually get bothered with the acronyms.
• 1:55
  SPEAKER_03: So good, thank you for calling me out on that, Mark.
• 1:57
  SPEAKER_03: That's good.
• 1:57
  SPEAKER_03: Yeah, it's okay.
• 1:58
  SPEAKER_03: So yeah, it's a it's it's effectively a trade association um for pet insurers in North America.
• 2:05
  SPEAKER_03: And and you know, we're um uh we have a great privilege of of being included in um in the association and and being able to participate in these meetings.
• 2:14
  SPEAKER_03: They're extremely insightful.
• 2:16
  SPEAKER_03: Um one of the biggest topics of conversation there was how to raise the awareness of pet insurance in uh in North America.
• 2:27
  SPEAKER_03: Uh, I think there's about a 6% penetration in terms of pet ownership to uh pet insurance uh policy ownership.
• 2:34
  SPEAKER_03: Um and you know, they had all these unbelievable creative ideas about um you know how to increase exposure.
• 2:41
  SPEAKER_03: And I was so disappointed to hear that you know this podcast was not first and foremost on there.
• 2:48
  SPEAKER_03: Sorry, I just had to um I tried to keep it straight face there while I was saying that.
• 2:52
  SPEAKER_03: Um but yeah, I mean I think I think awareness is uh it's it's critical, right?
• 2:58
  SPEAKER_03: And and I think there's a lot that goes into it and and you know, just more than just what pet insurance is, because I do think there's a consumer education gap in terms of what the product is and what it covers.
• 3:10
  SPEAKER_03: Um, I think how to use the product and and when to use the product and and you know there's just so much that goes into it.
• 3:17
  SPEAKER_03: So let's let's you know, without further ado, let's get right into it.
• 3:21
  SPEAKER_03: Um Mark, we picked up last time, I mean, we were talking about some of the sort of evolution that we predict could happen within the policy and service landscape on the pet side.
• 3:32
  SPEAKER_03: And I know that um, you know, we did want to get into more of the vet side of things.
• 3:37
  SPEAKER_03: Do we want to close off uh the policy discussion first, though?
• 3:40
  SPEAKER_03: I mean, is there is there anything that you know you want to uh I think I think what you just said there is actually quite interesting.
• 3:49
  SPEAKER_00: The fact that um I presume it's the folks in Lafia that are saying the market's six percent now in the States.
• 3:56
  SPEAKER_00: Yeah.
• 3:57
  SPEAKER_00: Because, you know, uh it was 1% penetrated for a long time.
• 4:04
  SPEAKER_00: Um, you know, going back as far back as 2016.
• 4:08
  SPEAKER_00: Does I do get the feeling that there's there is a momentum building.
• 4:14
  SPEAKER_00: Um I think I think it actually wasn't that long ago that the market was at 4%, maybe you know, a year ago.
• 4:22
  SPEAKER_00: So so it does seem to be picking up, which is which is really which is really interesting, actually.
• 4:28
  SPEAKER_00: Um and I think, you know, I guess that there'll come a tipping point, won't there, whereby in general the reaction when you go to the States and you say, you know, the classic example is when you go through customs and they say, Why are you here?
• 4:42
  SPEAKER_00: And I go, I'm here for a pet insurance thing.
• 4:44
  SPEAKER_00: And then I go, pet insurance?
• 4:46
  SPEAKER_00: You can get pet insurance?
• 4:47
  SPEAKER_00: Yeah, yeah, you can.
• 4:49
  SPEAKER_00: So I look forward to the I look forward to the moment when I go through customs and they don't um think I'm some kind of lunatic um when I tell them when I tell them what I do.
• 4:59
  SPEAKER_00: Well, they they still will, just not about the pet insurance, though, Mark.
• 5:02
  SPEAKER_00: Yeah, that's that is possible.
• 5:03
  SPEAKER_00: Yeah, so so that the dynamic between the interaction between uh the vet and and the insurer, it's quite interesting.
• 5:14
  SPEAKER_00: It's a really I mean the the there are it's kind of there are there are two stories here really that so in the UK and again this is gosh, well it's it's not a new thing, um, and it definitely existed in well, yeah, it definitely existed back in 2013.
• 5:34
  SPEAKER_00: So we had Vet Envoy.
• 5:36
  SPEAKER_00: So um there was a chap who kind of spotted that insurance was growing.
• 5:41
  SPEAKER_00: We were probably at uh at 20% at that point in terms of market penetration in the UK, and he built uh a data exchange format and he did a lot of groundwork because a lot of these systems were on-prem, the practice management systems, to effectively enable claims and and in some instances medical history uh to be exchanged uh electronically with insurers.
• 6:06
  SPEAKER_00: Um and uh and that was great.
• 6:10
  SPEAKER_00: Uh they were quite a small, well, no, I mean, really were a kind of one or two-man band.
• 6:16
  SPEAKER_00: So he did amazingly well.
• 6:18
  SPEAKER_00: Uh the guy, the guy dad died sadly.
• 6:20
  SPEAKER_00: Um, they did amazingly well to get to work with those practice management systems.
• 6:27
  SPEAKER_00: Um and that really, you know, that was quite far-sighted and it and it was a great solution.
• 6:34
  SPEAKER_00: It ultimately got bought by Alliance.
• 6:37
  SPEAKER_00: Um, I guess it would have been around the 2020s, 2021.
• 6:42
  SPEAKER_00: Um, but at that point it was used by a number of insurers.
• 6:45
  SPEAKER_00: Now, there's a slightly I never I never understood the logic, the logic for it.
• 6:48
  SPEAKER_00: That's been withdrawn from the market now, or is being withdrawn from the market.
• 6:52
  SPEAKER_00: I don't know if it's going to rise from the ashes.
• 6:54
  SPEAKER_03: Yeah, let's walk through kind of just a little bit more um functionally speaking, how that integration works, right?
• 7:00
  SPEAKER_03: Because we have uh we have the the vet practices who have practice management software, and that practice management software does everything from um you know diorizing appointments to uh inventory management on prescription medications and medical supplies and and and the like.
• 7:21
  SPEAKER_03: Um and that and I guess just you know explain a little bit more about what that what the integration was.
• 7:27
  SPEAKER_03: It was it from the insurance policy management system to the practice management system?
• 7:35
  SPEAKER_00: Well, so that that's really interesting that you should pick it up that way.
• 7:37
  SPEAKER_00: No, it was the other way.
• 7:39
  SPEAKER_00: And and importantly, the practice management systems, what they are doing are effectively they are the patient records.
• 7:46
  SPEAKER_00: You know, that's their primary job.
• 7:48
  SPEAKER_00: You know, you take Fluffy to the vet, Fluffy's got a record on there, we can see how many times Fluffy's come in, what medications he's had, when his injections in vaccinations are due.
• 8:02
  SPEAKER_00: So Vet Envoy.
• 8:04
  SPEAKER_00: So in the event that somebody came in and said, Oh, I've got insurance, and it's with one of the companies that had signed up to the Vet Envoy um platform, they would be able to press a button um within the practice and send the claim electronically to the insurer.
• 8:25
  SPEAKER_00: There were some issues with it, but effectively Vet Envoy worked as a centralized hub and it would then figure out where to send uh to which insurer it needed to send it to.
• 8:36
  SPEAKER_03: But is the insured is the insured still paying or the pet owner in this case still paying out of pocket and then they'll seek reimbursement from the insurance out of pocket, yeah.
• 8:46
  SPEAKER_03: Still paying out of pocket in this scenario.
• 8:48
  SPEAKER_00: But much better paper-free journey.
• 8:52
  SPEAKER_03: Yeah, so so you know, the the vet will provide services that'll cost 200 pounds person, the the pet owner will say, I have coverage, and through this vet envoy, I think it was an XML, the vet would send a copy of the claim, the you know, sort of itemized 200 pounds worth of charges to the carrier.
• 9:18
  SPEAKER_03: The pet parent pays the 200 pounds, and then at some point in time they're later reimbursed by their uh their but then okay correct.
• 9:27
  SPEAKER_00: Crucially, from the vet's perspective, they they don't have to fill out a claim form, they don't have to print out an invoice.
• 9:35
  SPEAKER_00: Um so you know, from the vet's perspective, on the one hand, it's great that someone's insured, they can, you know, offer them more extensive care options, but actually filling out a claim form is a massive pain in the butt, and they have to employ someone to do that, you know.
• 9:51
  SPEAKER_00: And certainly in the UK, you know, where it's one in three have insurance, it becomes quite a burden.
• 9:59
  SPEAKER_00: Um and yeah, so yeah, so that's kind of so that so that um capability was withdrawn.
• 10:08
  SPEAKER_00: There are some new entrants into the market.
• 10:10
  SPEAKER_00: So there's a company called Wizintech, I think that comes out of the Nordics that are looking to fill that gap.
• 10:16
  SPEAKER_00: You've also got Claris, which is part of the Doubtless group, um, looking to fill that gap.
• 10:24
  SPEAKER_00: Uh, and then there's also a company called Helm, um, again, looking to fill that gap.
• 10:31
  SPEAKER_00: Um and then and there may be others.
• 10:35
  SPEAKER_00: In fact, uh ICE itself has built direct integrations.
• 10:38
  SPEAKER_00: So we're directly integrated with Lupa, Vivet Shore, which is great.
• 10:43
  SPEAKER_00: You know, that does exactly what it needs to do, but it is point-to-point as opposed to you need to know who your insurer is, as opposed to submit claim, fire and forget, ends up in the right place.
• 10:57
  SPEAKER_00: So that's the hist that's the history of that.
• 10:58
  SPEAKER_00: And true panion.
• 11:00
  SPEAKER_03: And and just and just to be clear though, Mark, just sorry, just to back up a step, the insurance company still needs to make a a coverage decision, right?
• 11:08
  SPEAKER_03: So so even though the the claim is submitted to them via the XML, you know, they still need to log in on their side and say, actually, you weren't covered for this for a predestination.
• 11:19
  SPEAKER_00: So you've paid your thousand bucks or whatever, a thousand quid.
• 11:23
  SPEAKER_00: Um and you that claim ultimately maybe may be rejected.
• 11:27
  SPEAKER_00: Um, but you'll only find out, you know, in an ideal case in a couple of days.
• 11:32
  SPEAKER_00: You know, some cases back in the day when things were really manual, then you know, some of these companies were running several months backlog, which was terrible.
• 11:42
  SPEAKER_00: Um so uh yeah, so we've got some new entrants in the market.
• 11:47
  SPEAKER_00: Trupanion developed a similar system in North America, but they uh they interestingly kept it to themselves and used it as a kind of moat for the business.
• 12:02
  SPEAKER_00: I mean, some people would argue that actually slowed the growth of the pet market overall in the States.
• 12:09
  SPEAKER_00: Um I'm sure Tripanya might might see it differently.
• 12:13
  SPEAKER_00: I think I get the sense that that their grip, their grip on having that that moat is is loosening, particularly with with Claris coming into the market.
• 12:23
  SPEAKER_00: Um they had kind of defended it quite strongly legally.
• 12:28
  SPEAKER_00: Um, and I know it was a quite a current conversation at Nathia, actually, back in the day, as to whether they could offer an alternative.
• 12:36
  SPEAKER_00: But and in fact, actually, to be fair to True Panion, they were the pioneers of trying to shift the model away from a reimbursement model.
• 12:44
  SPEAKER_00: So you go to the vet, you have the treatment, you pay for it, you're out of pocket.
• 12:50
  SPEAKER_00: So there's a reimbursement model, so whatever the opposite of a reimbursement model is, so you're not being paid back, the insurer is covering it.
• 12:57
  SPEAKER_00: Weirdly, you know, I make a big fuss about how pet insurance, you know, and how dogs aren't fluffy cars.
• 13:04
  SPEAKER_00: But actually, the model is much more akin to what happens when you have a car crash or an auto accident.
• 13:10
  SPEAKER_00: You report it to your insurer, they go, don't worry about it, we'll cover the costs.
• 13:15
  SPEAKER_00: Um, and you effectively, you know, you walk off into the sunset and it's all taken care of.
• 13:21
  SPEAKER_00: So that is the model, and I kind of talk about pet 2.0.
• 13:25
  SPEAKER_00: That is the way I think the industry is going to go across the board in the next few years.
• 13:29
  SPEAKER_03: Yeah, or or or I think, I think even more sort of directly analogous, uh, you know, the sort of the the human health benefits model, right?
• 13:37
  SPEAKER_03: Where optometrists or dentists or you know, um pharmacies have uh, you know, sort of a broad service that they can verify coverage on and then just potentially charge you your excess or your deductible, which I think is is also uh exactly a difference here where a lot of these pet policies might have an excess or deductible, but it doesn't actually operate as a deductible in the sense that the other thing is.
• 14:05
  SPEAKER_00: So what the vets don't know when when you go into the practice is well, do you have insurance?
• 14:12
  SPEAKER_00: What is your excess?
• 14:13
  SPEAKER_00: Have you burned through your limit?
• 14:15
  SPEAKER_00: And yeah, all of this information is pertinent to actually the offers you're gonna suggest to your customer.
• 14:23
  SPEAKER_00: I was spoken to a vet this morning and he was saying, you know, it's kind of a dance when somebody comes in with their pet because you don't know what their financial situation is, and that is gonna completely influence the conversation that you're gonna have um with the with the policy holder.
• 14:40
  SPEAKER_00: So yeah, so so the likes of um Clarice and Helm, and potentially with Zintech, um less familiar with their technology, but um they want to offer they want to effectively um give that transparency of cover within the vet practice.
• 14:55
  SPEAKER_00: So obviously there's some data sharing, you know, potentially some GDPR issues that that need to be navigated around, but I I'm pretty sure that those are all workable.
• 15:04
  SPEAKER_00: And I and I do expect that within the next few years, um, the vast majority of vet practices, when you go into the vets, will be aware as to whether or not you've got insurance cover or not.
• 15:17
  SPEAKER_00: Which uh and which again opens up some interesting kind of ideas in that you could almost then imagine, and from a regulatory perspective, I dare say there are lots of pitfalls that would need again need to be worked around.
• 15:35
  SPEAKER_00: But you could imagine those, those, that middle integration layer that's consuming all of that insurer information and presenting it to uh the vet inside the practice.
• 15:48
  SPEAKER_00: Actually, in the event that somebody doesn't have insurance, they could say, Oh, well, I see you don't have insurance.
• 15:55
  SPEAKER_00: Do you know what?
• 15:56
  SPEAKER_00: If you're interested, it's quite a good idea.
• 15:58
  SPEAKER_00: If I press this button here, we'll send you the top three quotes, you know, depending on your circumstances.
• 16:06
  SPEAKER_00: Um, I think it's an open question as to whether or not vets would want to do that, but effectively, the that conversation at the vet practice kind of becomes an aggregator type um journey.
• 16:20
  SPEAKER_00: And and that middle player could could actually begin to be an aggregator within the pet space.
• 16:27
  SPEAKER_00: And those journeys are, I think, from a conversion perspective, uh, much more attractive because a vet is a trusted individual.
• 16:37
  SPEAKER_00: Now, uh there are all sorts of issues with what I've said in terms of, you know, is that is that vet offering insurance advice and how that's regulated?
• 16:45
  SPEAKER_00: But it definitely opens up, I think, some new avenues that don't exist currently.
• 16:50
  SPEAKER_00: I don't know.
• 16:51
  SPEAKER_03: I to me it just sounds like more of a uh digitization of current day where you walk in and there's three different port or three different um flyers, you know, sitting on uh sitting on the how different is that?
• 17:04
  SPEAKER_00: But you know, but it's tailored exactly to you, your breed, and you know, the type of cover that you might roll.
• 17:10
  SPEAKER_03: So the the personalization and the cut yeah, the personalization and the customization would be unique as well.
• 17:14
  SPEAKER_00: So it'll be interesting to see it'll be interesting to see if and how that pans out.
• 17:19
  SPEAKER_00: Yeah.
• 17:19
  SPEAKER_00: And then probably the kind of oh, so yeah, so there's quite a few things, you know, I sort of skirt that that that maybe that's uh that's a bit of a side alley.
• 17:28
  SPEAKER_00: But in the event that um you go into a practice and we know about your coverage, we know about the claims that you've had previously, a vet could offer you a treatment and go, oh, actually, this is a repeat, this is a continuation claim of something your your excess has already been paid.
• 17:46
  SPEAKER_00: If I press this button and some magic automation happens uh down at the insurer, I get immediate notification that I'm gonna get covered for this.
• 17:56
  SPEAKER_00: That's fine, you there's nothing to pay, you off you go.
• 17:59
  SPEAKER_00: You know, that's a much better experience to say, oh God, have I got enough limit on my credit card to pay this 500 quid?
• 18:07
  SPEAKER_00: Whereas you just press a button and go, yeah, covered.
• 18:09
  SPEAKER_00: Oh, brilliant.
• 18:09
  SPEAKER_00: Okay, cool.
• 18:10
  SPEAKER_00: That's why I've got insurance.
• 18:12
  SPEAKER_02: How do how is it managed on, you know, because I think we talked last um week, Mark, about how a lot of these kind of processes are now being kind of owned cradle to grave in terms of you know, it's it's the the pet brands owned by the pet company and they also own the vet practice.
• 18:26
  SPEAKER_02: I mean, my experience, be careful what I say here, but you know, whenever I take my Labrador into the vet, I always feel like I've just had my buddy Ferrari serviced, you know, that they seem the bills seems to, and and I've not got a Ferrari, so I mean it is just given uh an example of it always seeming to be very expensive.
• 18:45
  SPEAKER_02: I mean, that is also how are insurers managing that?
• 18:48
  SPEAKER_00: How are they how are they?
• 18:49
  SPEAKER_00: Yeah, it's a very this is a very, very live issue.
• 18:52
  SPEAKER_00: Um and this is less about this is less about technology and more about um how vets are actually being trained to look after animals.
• 19:08
  SPEAKER_00: To some extent, insurance hasn't has made the problem to some extent worse.
• 19:13
  SPEAKER_00: You know, if you can see that somebody's got, oh, uh they've got fire, you know, they've got pet plan, I can they can spend you know 10 grand.
• 19:21
  SPEAKER_00: Brilliant.
• 19:21
  SPEAKER_00: Okay, well, what we'll do is we'll do an MRI, you know, uh X-rays.
• 19:26
  SPEAKER_00: And and before that, you'd go, oh, do you know what?
• 19:29
  SPEAKER_00: I think your dog might actually have, you know, have cancer.
• 19:34
  SPEAKER_00: Again, conversation from this morning.
• 19:36
  SPEAKER_00: 10 years ago, 15 years ago, you'd have a sensitive conversation, go, do you know what?
• 19:41
  SPEAKER_00: I think your dog might have cancer.
• 19:43
  SPEAKER_00: Um, and probably the the best thing to do would be for us to put it down, okay, 50 quid.
• 19:49
  SPEAKER_00: As opposed to today, right, okay, we can go and do um an MRI scan, an x-ray, send it off to a cancer lab, you know, you're knocking, you're looking at three, four thousand quid, and then potentially some chemotherapy, and the dog lives for six or more months.
• 20:04
  SPEAKER_00: And actually, it's a difficult one, isn't it?
• 20:05
  SPEAKER_02: Because if you explain those two scenarios, you've got the scenario that you said, which is you walk into the vet and they're like, hmm, what do we do here?
• 20:12
  SPEAKER_02: Uh, how much, how far do we go?
• 20:14
  SPEAKER_02: And and then the other side of that coin, you've got, oh, they've got the gold-plated policy, let's just, you know, throw everything in the mix.
• 20:20
  SPEAKER_02: Isn't the middle ground that let's just do the right thing for the animal?
• 20:23
  SPEAKER_00: And so yeah, so again, you've hit the nail on the head.
• 20:26
  SPEAKER_00: That is exactly what the veterinary community is looking at now.
• 20:29
  SPEAKER_00: Is it you know, the pendulum has gone too far the other way, and you know, what care is actually appropriate and in the best interest of the animal, and that needs to be educated in the veterinary schools before they actually go into practice.
• 20:45
  SPEAKER_00: So, yeah, that is work being worked on right now.
• 20:47
  SPEAKER_00: And in fact, you know, the the in the UK, PIA, the Pet and Equine Insurance Association, they're working very closely with some of the people that are kind of front and centre on this initiative.
• 20:58
  SPEAKER_00: Going back to that kind of extreme example, and again, talking to a vet this morning, he was saying, you know, in that scenario, you know what?
• 21:06
  SPEAKER_00: I've got a funny feeling your dog may have cancer, it's not going to be good.
• 21:10
  SPEAKER_00: I think you know, probably the nicest thing to do is put it down.
• 21:13
  SPEAKER_00: Three weeks later, they walk in with a puppy.
• 21:17
  SPEAKER_00: You know, and and and that's that's that's quite and and and from an insurer perspective, sure, you know, if this thing is, you know, a reasonably treatable condition, that's exactly what insurance is for.
• 21:33
  SPEAKER_00: But going for unnecessary scans where actually the long-term prognosis is, you know, maybe uh uh a year.
• 21:41
  SPEAKER_00: Yeah.
• 21:43
  SPEAKER_00: And and what that means is everyone's premiums are going up.
• 21:47
  SPEAKER_00: You know, is that the best thing?
• 21:49
  SPEAKER_00: It's so difficult because because it's your furry it's your furry baby.
• 21:54
  SPEAKER_00: And and sometimes insurance is saying you don't have to make that really.
• 22:00
  SPEAKER_00: Hard decision.
• 22:00
  SPEAKER_00: You can keep going.
• 22:01
  SPEAKER_00: You can keep trying to keep this thing alive.
• 22:03
  SPEAKER_00: But the uh maybe maybe the Riance is on the veterinary community to say, you know what, that that might not be the best thing.
• 22:12
  SPEAKER_03: Again, I I think this is where I I would sorry, Lloyd.
• 22:15
  SPEAKER_03: Uh just one quick comment here.
• 22:18
  SPEAKER_03: This is where I would kind of, I know I I brought this up last week, but I I trust the invisible hand of of the market to to help to settle uh on what the correct equilibrium is.
• 22:30
  SPEAKER_03: So I think the biggest challenge right now is where you have um a lack of transparency or you have a lack of visibility between the different actors, uh, you know, it it creates much more friction in the process.
• 22:46
  SPEAKER_03: Once you eliminate that friction by giving everybody all the information, right?
• 22:52
  SPEAKER_03: You you give the vet all the information in terms of insurance coverage, in terms of pet health, you know, pet medical records, um, you know, they're gonna know their patient.
• 23:03
  SPEAKER_03: Uh, and and correspondingly, you know, the insurers have all the information in terms of loss experience and you know, a balance of premium to benefit and so on and so forth.
• 23:16
  SPEAKER_03: The invisible hand will help to sort out, you know, how those conversations eventually you know play out in practice.
• 23:25
  SPEAKER_00: You've just highlighted another issue which I glossed over, which is probably one of the most pressing issues today in in pet insurance.
• 23:33
  SPEAKER_00: Very few pet insurers um today underwrite at time of sale.
• 23:39
  SPEAKER_00: So what will happen is you'll go, oh yeah, you know, your dog's your dog's three years old, you've been meaning to get insurance for a long time, and finally you went to the van, something happened, and you thought, oh God, you know, I should really should get insurance.
• 23:54
  SPEAKER_00: So you buy insurance, and then you pay for it for another three years, nothing happens.
• 24:00
  SPEAKER_00: Um, and then you make a claim.
• 24:03
  SPEAKER_00: And only at that point, there are exceptions to this, um, but oh in general, the market only at that point will go and request the medical records.
• 24:12
  SPEAKER_00: And guess what?
• 24:13
  SPEAKER_00: That thing that you've made a 1,500 pound claim for, and you've paid what I don't know, let's say£2,000 worth of premium in the intervening period, that was the thing you went to the vet back in the day when you decided to get in pet insurance, you're not covered.
• 24:27
  SPEAKER_00: Yeah, you know, and people are massively then upset, quite rightly, that well, what the hell have I been paying for?
• 24:35
  SPEAKER_00: Yeah.
• 24:35
  SPEAKER_00: And so through better data sharing, through the kind of AI automation pieces that we're working on at ICE, what we can do is we can start that underwriting journey at at time of sale, probably initially post-sale.
• 24:53
  SPEAKER_00: So customer buys a policy, we ping the vet, we suck the records down, we identify pre-existing condition all automatically.
• 25:01
  SPEAKER_00: You know, today it's a very manual process, very expensive.
• 25:04
  SPEAKER_00: Um, we notify the customer from the get-go, you know, um cruciate ligament in the in the in the rear legs.
• 25:12
  SPEAKER_00: Um that's not going to be covered in the event that there's a claim in the in the future.
• 25:16
  SPEAKER_00: And then the the policyholder at that point can go, oh, okay, fine.
• 25:20
  SPEAKER_00: I understand that.
• 25:21
  SPEAKER_00: I'll keep going.
• 25:22
  SPEAKER_00: Or, okay, do you know what?
• 25:23
  SPEAKER_00: Let's shake hands, walk away, and you know, I'll just put some money aside or however they want to deal with it.
• 25:29
  SPEAKER_00: Final thought on that one, potentially in the future, and there's no reason, again, technically, why this couldn't happen, at time of before before you've even bought the policy, you get those medical records, you identify pre-existing conditions, and then you can then potentially offer, well, do you know what?
• 25:47
  SPEAKER_00: We've caught this very early for additional premium.
• 25:50
  SPEAKER_00: I mean, it's like it's like the travel market is today with human health, for an additional premium of whatever,$3 a day will also cover cruciate any cruciate ligaments in the future for this Labrador.
• 26:03
  SPEAKER_00: And you know, so that that I think is very interesting kind of uh thought experiment.
• 26:09
  SPEAKER_00: And you know, as I say, the technology exists to do it, you just need to kind of make it happen.
• 26:13
  SPEAKER_03: Yeah, exactly.
• 26:14
  SPEAKER_03: Not to not to sweep everything up under one broad umbrella, but I I think a lot of this just comes down to uh you know transparency and visibility, which you know, data sharing can really facilitate, right?
• 26:28
  SPEAKER_03: Absolutely.
• 26:29
  SPEAKER_03: And what and whether it's medical data or whether it's um the actual you know cost data, um there are avenues to reduce or eliminate some of these barriers.
• 26:40
  SPEAKER_03: And again, I think that's where when you think about penetration statistics and you think about opportunity, I I think at some point in time the investment has to be made to solve some of these problems as the first step in order to have a better um a better message to the general populace when you're trying to then uh raise awareness.
• 27:06
  SPEAKER_03: Because I I I I I do think that even in trying to raise awareness today, there's a lot of mysticism around what is insurance and what's it for and why would I bother?
• 27:17
  SPEAKER_03: And you know, all so all of these case studies that you're or all these examples, Mark, that you're walking through and explaining, they're not necessarily what's being communicated when when you know somebody's asking, well, why would I buy this policy?
• 27:33
  SPEAKER_03: Or or you know, worse yet, when they're Googling it or searching it on Chat GPT or something, you know, they they may not be getting that that nuanced detail.
• 27:42
  SPEAKER_03: And and then they're probably making the decision not to obtain coverage themselves, right?
• 27:47
  SPEAKER_03: So um I do think that you know we need to solve some of these problems first, but you know, in order to make you know whatever um awareness efforts more effective in the future.
• 28:01
  SPEAKER_00: Yeah, I think I I think all the building blocks are there from a technology perspective.
• 28:04
  SPEAKER_00: It's really just a question of you know, us as the technology providers and then our our insurer clients working together to to make these things happen.
• 28:12
  SPEAKER_03: And and then again, uniquely, you know, working with the vets, right?
• 28:15
  SPEAKER_03: I mean, that's uh for sure.
• 28:17
  SPEAKER_03: Yeah.
• 28:18
  SPEAKER_03: Fascinating.
• 28:19
  SPEAKER_03: Well why don't we talk a little bit about p pivot a little bit and talk about um the other sort of channel uh you know, channel opportunities that there are, right?
• 28:30
  SPEAKER_03: Because obviously, you know, we spent a lot of time talking about the vet channel, and it is unique um for the fact that it's also where you're going to experience claims.
• 28:40
  SPEAKER_03: It's also where you're going to experience the actual services that are rendered for your pet or or you know, as of present day, the majority of services that you would experience, you know, under your policy or with your pet.
• 28:54
  SPEAKER_03: Um, but let's think about some other channels.
• 28:56
  SPEAKER_03: Let's think about the um pet distributor, the pet distributors, whether it's um, you know, pet supplies, um, you know, food, crates, beds, uh, housing costumes.
• 29:10
  SPEAKER_00: There have there have been there have been there have been initiatives in the past, uh, pet food companies in the past um have um have explored uh insurance.
• 29:23
  SPEAKER_00: Um I'm thinking about Purina in the States.
• 29:26
  SPEAKER_00: Um but those those have kind of come and gone.
• 29:29
  SPEAKER_00: I think I think for those very, very large organizations, so it's like Unilever and Mars, they make so much money out of pet food.
• 29:39
  SPEAKER_00: Um and you know, giving away a centimeter of shelf space to insurance, it's really costly.
• 29:45
  SPEAKER_00: I mean, I might be wrong about that, but um I've definitely seen it come and go.
• 29:50
  SPEAKER_00: I think um, you know, we've seen pets at home recently come into the market in the UK.
• 29:55
  SPEAKER_00: They did have an insurance product, but it was with um effectively administered uh by a third party.
• 30:03
  SPEAKER_00: But having their own products, very interesting.
• 30:05
  SPEAKER_00: Um, the fact that they've got the vets in store as well.
• 30:10
  SPEAKER_00: So they're having those um kind of trusted conversations with veterinals.
• 30:17
  SPEAKER_00: It'll be interesting to see how how that that one how that one grows.
• 30:21
  SPEAKER_03: Um I know the I know the adoption, the adoption in the kennel space is quite popular now as well, right?
• 30:27
  SPEAKER_03: So when um you know, when people are cons considering adopting, uh whether it's puppy or you know, an older age dog, if if they're going through um the Humane Society or through a kennel, uh I know that you know that presents an interesting channel because it does sort of, especially from a puppy standpoint, it does give an opportunity to to sell a policy that somebody's gonna use right away to cover the initial examinations and and the initial vaccinations that um puppy's gonna need, right?
• 30:58
  SPEAKER_00: So um I think you're in that you're you're in that trusted conversation mode.
• 31:04
  SPEAKER_00: Um so you know, if somebody you know happens to offer you a you know a trial policy, you know, probably the take up on that's gonna be very high, and you're probably not gonna shop around.
• 31:15
  SPEAKER_00: Um so capturing those moments, the vet, the shelter, the breeder, um those are all really, really good times to kind of effectively lock out the competition.
• 31:27
  SPEAKER_00: I mean, the insurers are aware of this.
• 31:29
  SPEAKER_00: Um the other thing in the UK, um uh and it's good and it's also bad, is probably circa 60% of policies sold in the UK are coming through aggregators.
• 31:41
  SPEAKER_00: It's not really a thing in so much in North America.
• 31:45
  SPEAKER_00: That is a I say it's good and bad, but it's it's a tricky one to get right, uh, that one, because you end up just being compared on price, frankly.
• 31:56
  SPEAKER_00: And it's it, right?
• 31:58
  SPEAKER_00: It's it's a race to the bottom.
• 32:00
  SPEAKER_00: And so you end up with I mean the policies are fine, but you can't adopt a kind of model whereby we're gonna price this for the life of the animal, because uh policies that price like that are expensive and they will not work on an aggregator, you'll be way down the bottom of the list.
• 32:24
  SPEAKER_00: So what that means is is you'll get you'll get a policy and it looks for like reasonably good value, but that policy will just become progressively more and more expensive as that animal gets older.
• 32:37
  SPEAKER_00: And potentially if you start claiming, it gets expensive.
• 32:40
  SPEAKER_00: And you know, it's not uncommon, you know, um the when the when the pets are nearing end of life and and the vet bills are really high, they they just stop paying insurance.
• 32:51
  SPEAKER_00: Um and again, that's an interesting one.
• 32:53
  SPEAKER_00: I don't think the industry has quite figured out yet um the answer, the answer to to that.
• 33:02
  SPEAKER_00: To what extent it's it's it's a major problem for the industry, I don't know, but but you know, it's definitely a reality.
• 33:08
  SPEAKER_00: You know, how many anecdotal conversations um have you had, um Lloyd, where somebody said, Oh my god, my pay insurance, I just had the renewal, it's gone through the roof.
• 33:19
  SPEAKER_00: And that's not great.
• 33:22
  SPEAKER_02: One of the ones that I was gonna bring up actually that um you know you you talked about where you had that opportunity to kind of corner the market and get it right from the start.
• 33:30
  SPEAKER_02: Is I recall, I don't know if they still do it now, but Kennel Club used to kind of give like two weeks free insurance if you if you registered your dog or something like that.
• 33:40
  SPEAKER_02: But you know, I've done it a couple of times, I think, but never then followed it up.
• 33:43
  SPEAKER_02: And I don't really know why.
• 33:44
  SPEAKER_02: I don't know if it's because they were they helped me at the right time in marketing, were they too expensive?
• 33:50
  SPEAKER_02: But you know, it felt like a good, felt like a really good kind of model if you could get it right.
• 33:54
  SPEAKER_00: Yeah, I think it's probably more the fault of whoever was backing that trial policy.
• 34:00
  SPEAKER_00: You know, they had you warm and they let you go cold.
• 34:03
  SPEAKER_00: Um, I don't know if you recall kind of was there any follow-up?
• 34:07
  SPEAKER_00: No, just completely.
• 34:08
  SPEAKER_00: Yeah, so I I I just think that's just poorly executed.
• 34:12
  SPEAKER_00: I know, you know, recent experience of Troopanion, they're very, very close to uh the veterin space and the shelters.
• 34:22
  SPEAKER_00: If a trial policy gets issued, you can bet 100% that you're gonna get followed up from True Panion and they and they monitor those conversion numbers very, very closely.
• 34:33
  SPEAKER_00: Um, because you've had that trusted conversation, because you've got immediate value and they've got your details, um, just seems kind of self-evident that you're a good prospect to convert.
• 34:43
  SPEAKER_00: And you know, I think they do get a lot of success that in that route.
• 34:47
  SPEAKER_03: Mark, what about what about the the thought of um you know creating a sort of white-labeled proposition and embedding it in uh other types of insurance products or uh you know other types of financial services?
• 35:04
  SPEAKER_03: So I just I think about think about your credit card now and think about getting purchase protection coverage, warranty coverage, ADD coverage, travel coverage.
• 35:13
  SPEAKER_03: I mean, you know, the premium cards are always looking for a way to compete with one another.
• 35:17
  SPEAKER_03: Do you think that's a viable?
• 35:19
  SPEAKER_00: No, I think it's a great idea.
• 35:21
  SPEAKER_03: Yeah, yeah, because I think there's there's a huge opportunity.
• 35:24
  SPEAKER_03: I know travel from a penetration standpoint.
• 35:27
  SPEAKER_03: I mean, that had a massive benefit to travel penetration for travelers, just you know, being able to rely on some baseline coverage.
• 35:36
  SPEAKER_03: Now, again, the invisible hand of the market is gonna have to eventually um we should rename this podcast the invisible hand of the market.
• 35:44
  SPEAKER_03: I've said it 17 times, but um, you know, that will eventually have to intervene because when travel was first an embedded policy or sorry, uh first embedded coverage, you know, obviously there's a lot of teething around what's covered versus what's not covered.
• 35:59
  SPEAKER_03: There's a lack of consumer education, what's covered.
• 36:01
  SPEAKER_03: So there's this gap, and and people are having to pay out of pocket for a lot of things.
• 36:04
  SPEAKER_03: And, you know, that that as the as the solution has matured, a lot of that teething has gone away.
• 36:11
  SPEAKER_03: Consumers are more educated about what they're getting and what the gaps in what they're getting are.
• 36:15
  SPEAKER_03: And at the same time, insurers have changed the offering slightly.
• 36:19
  SPEAKER_03: And I assume PET would need to go through the same thing.
• 36:21
  SPEAKER_03: It just always seemed like quite a viable channel.
• 36:24
  SPEAKER_00: Um no, no, it's it's really interesting.
• 36:27
  SPEAKER_00: Um, it's a really interesting idea.
• 36:30
  SPEAKER_00: Um, I know there was a company in the States, and I presume they're still there, they were looking to launch um or have launched um um an embedded um product.
• 36:45
  SPEAKER_00: I think you I think you I think the model was if you take our credit card, you get pet insurance for free.
• 36:52
  SPEAKER_00: And it was a pretty base level of cover, and you could then upgrade it.
• 36:56
  SPEAKER_00: Um and so I think that you know that's really interesting, and I think exactly what you're talking about.
• 37:02
  SPEAKER_00: Um yeah, so yeah, uh, it'd be interesting to see if that market develops.
• 37:07
  SPEAKER_00: Probably I would have thought if that does take off, it's probably more likely to be kind of led from the states.
• 37:14
  SPEAKER_00: I think that's a very kind of sorry, North America, because I presume in Canada it's the same.
• 37:18
  SPEAKER_00: Um, you know, that you get a lot, you know, we get it too in the UK, but I just think I think that's quite uh a well-understood model.
• 37:26
  SPEAKER_03: Um Yeah, and I I mean I might be I might be a bit biased uh as a Canadian, but I'm you know, we have six banks that dominate the credit space, right?
• 37:36
  SPEAKER_03: So um it's it they're they're they're they're so hyper competitive on the benefits side of things um uh in the in the credit market in Canada that that they're always looking for for enrichments.
• 37:47
  SPEAKER_03: So um if any of the Canadian banks want to reach out, uh we can we can talk through how to make it work.
• 37:54
  SPEAKER_03: Um but yeah, I I I you know to me again super underserved.
• 37:58
  SPEAKER_03: Um the only other point that I was I was gonna pick your brain on um before we uh let you guys uh go ahead of schedule and and start your weekend is um wellness and pet wellness and and where that fits in.
• 38:12
  SPEAKER_03: And and do you think that is a bit of a fantasy or or do you think it you know it is actually a viable um, it's definitely a thing.
• 38:22
  SPEAKER_00: Um quite a lot of the vets quite a lot of the vet practices are offering it themselves.
• 38:31
  SPEAKER_00: Um and uh and they like it because um, you know, and they're they're fully, you know, they'll definitely get behind uh wellness because um effectively that that's that's that's a guaranteed revenue stream for them.
• 38:48
  SPEAKER_00: You know, you you you know you pay a 10 quid a month or whatever, and the vet knows that there's a very good chance that that 120 quid is coming back um through their doors, which is great.
• 38:59
  SPEAKER_00: And they can, you know, and typically they'll get remitted monthly on those kind of plans.
• 39:03
  SPEAKER_00: So it just keeps the cash flow coming in, which is really, really important.
• 39:06
  SPEAKER_00: So yeah, no, and I think different insurers are going to have different views on wellness plans and what those animals turn out to be like as insured risks.
• 39:20
  SPEAKER_00: You hear anecdotal evidence of, you know, oh, the first time I took my dog to the vet was, you know, when it was 13 years old and it was on its way out.
• 39:27
  SPEAKER_00: Apart from that, it'd never been to the vet.
• 39:30
  SPEAKER_00: And then you've got somebody that's on a wellness plan that is going to go to the vet all the time because they're on a wellness plan, but also as soon as Tiddles trips up or cops in a funny way, they're straight down the vet.
• 39:43
  SPEAKER_00: So some insurers might go, actually, yeah, those kind of customers may not necessarily be the ones we want.
• 39:50
  SPEAKER_00: I don't know the answer.
• 39:52
  SPEAKER_00: Um, no, I I mean vets definitely vets definitely like it for that cash flow reason.
• 39:59
  SPEAKER_03: I could make a joke about Gen Gen Z uh pet owners now, but I'll I'll save that.
• 40:05
  SPEAKER_03: Yeah, why can't we?
• 40:06
  SPEAKER_02: Um how long until um our furry friends uh are kind of got their own Apple Health account and we're sort of strapping them up with uh with kind of wearable devices and working on the fitness and keeping their waistline in check.
• 40:18
  SPEAKER_02: Already happened.
• 40:19
  SPEAKER_00: Yeah, it's already happening.
• 40:21
  SPEAKER_00: That's cool.
• 40:21
  SPEAKER_00: So yeah, um I can't remember the name of the company.
• 40:24
  SPEAKER_00: They were at Netflix, weren't they?
• 40:25
  SPEAKER_00: Um the chat?
• 40:28
  SPEAKER_03: Uh it's one of our one of our customers as well, the with the PitPat device.
• 40:32
  unknown: Right?
• 40:33
  SPEAKER_03: Right.
• 40:33
  SPEAKER_03: Where they're monitoring, they're monitoring steps, uh, you know, and and if the if the pet's being locked, and and then they're using that as a health indicator.
• 40:42
  SPEAKER_03: Um, you know, presumably to discount premium and and yeah.
• 40:46
  SPEAKER_03: Again, I mean I think I think it's early days.
• 40:49
  SPEAKER_00: You know, yeah, you need to build up the data to collect the data.
• 40:53
  SPEAKER_00: Yeah, yeah, yeah.
• 40:54
  SPEAKER_00: Sure.
• 40:55
  SPEAKER_00: But yeah, no, absolutely.
• 40:57
  SPEAKER_03: And how much of this is actually uh you know actuarial support actuarially supported versus how much of it is just competitive uh differentiation.
• 41:06
  SPEAKER_03: Exactly, right?
• 41:07
  SPEAKER_02: So definitely not putting my dog on our weekly leaderboard, I know that much, because uh yeah, it's gonna it's gonna bloody win.
• 41:15
  SPEAKER_00: Mine do okay.
• 41:16
  SPEAKER_00: Yeah.
• 41:17
  SPEAKER_03: Yeah.
• 41:17
  SPEAKER_03: I I yeah, I mean uh a Jack Russell's legs are a lot shorter than a Labrador's legs as well.
• 41:23
  SPEAKER_00: Yeah, I know, but honestly, you don't if you don't take those out, you know, they'll start ripping the house apart.
• 41:30
  SPEAKER_00: It's not a question of exercise, it's a question of keeping the house in in shape.
• 41:35
  SPEAKER_00: Okay, they get bored very quickly.
• 41:37
  SPEAKER_02: That that leads me on to another another question, and I'm sure we're getting close to needing to wrap up.
• 41:42
  SPEAKER_02: Um, I mean, I've I've I've got a number of these, and we we should do it again in another uh podcast from a kind of um personal mind's perspective.
• 41:50
  SPEAKER_02: But what's tell me a wacky pet claim?
• 41:53
  SPEAKER_02: What's the what's the most wild thing that Rover's done?
• 41:56
  SPEAKER_02: You know, uh you must have seen a few.
• 41:58
  SPEAKER_00: Uh I mean, Labrador, I mean you must know this.
• 42:01
  SPEAKER_00: I mean, Labradors have a problem with food in that they can't, you know, they can't eat enough.
• 42:07
  SPEAKER_00: So, you know, it's really uh and you know, as an you know, talk about pre-existing conditions.
• 42:13
  SPEAKER_00: It's not unusual to see sock ingestion as a excluded condition.
• 42:18
  SPEAKER_00: Because all this stuff is, you know, you leave a sock down, this dog's gonna eat it.
• 42:22
  unknown: Yeah.
• 42:23
  SPEAKER_00: So that's fair.
• 42:24
  SPEAKER_03: I was gonna say it, I I was gonna say there's there's uh a lot of definition on the word food there, right?
• 42:28
  SPEAKER_00: Um that really made me kind of um sort of go, you know, it was kind of I couldn't believe it.
• 42:36
  SPEAKER_00: When we were at Napcio and they were saying the most expensive, the most expensive claim that they'd reported, it was some kind of small dog.
• 42:44
  SPEAKER_00: And the bill was$70,000.
• 42:49
  SPEAKER_00: And and for an undiagnosed condition.
• 42:53
  SPEAKER_00: Which I well, that's just bonkers.
• 42:55
  SPEAKER_00: That is mad.
• 42:56
  SPEAKER_00: That is, but you know, that is that that's the most extreme example of, you know, maybe we haven't got a service in a Ferrari.
• 43:03
  SPEAKER_02: That's that's buying a new Ferrari.
• 43:05
  SPEAKER_02: Yeah, yeah, that's crazy.
• 43:06
  SPEAKER_03: Um Mark, listen, I mean, this was this was extremely enlightening.
• 43:10
  SPEAKER_03: Uh, you know, I think I think it there still are so many, as Lloyd said, you know, there's still so many questions we can dig into here, and and I think we will definitely keep this as a bit of a recurring uh a recurring series as we continue on here.
• 43:22
  SPEAKER_03: And and of course we do want to tap into your you know uh interactive technology knowledge outside of of PET as well, because you it does exist.
• 43:31
  SPEAKER_03: Yeah, it does exist, it does exist.
• 43:33
  SPEAKER_03: Uh so uh so yeah, thank thank you for spending the time and and uh helping 15 minutes five pet for us.
• 43:41
  SPEAKER_03: And I guess on that note, guys, we'll we'll end it here and what you guys start to get.
• 43:46
  SPEAKER_03: And yeah, speaking of the station, we'll see.