Latest / Breaking the ICE / Episode 9 - The Vet in the Middle: What Makes Pet Insurance Unlike Any Other Line?

Transcript

Episode 9 - The Vet in the Middle: What Makes Pet Insurance Unlike Any Other Line? · Breaking the ICE

• 0:01
  SPEAKER_00: Hello and welcome back to the Breaking the Ice podcast.
• 0:05
  SPEAKER_00: This is season one, episode nine.
• 0:08
  SPEAKER_00: And this week I am joined by my two co-hosts, Lloyd Overton and Mark Calanese.
• 0:13
  SPEAKER_00: Lloyd, Mark, how are you doing this morning?
• 0:15
  SPEAKER_00: This afternoon?
• 0:17
  SPEAKER_00: I guess this evening, depending on where you are in the world.
• 0:20
  SPEAKER_00: Yeah.
• 0:20
  SPEAKER_00: Good, thank you.
• 0:21
  SPEAKER_00: Still morning.
• 0:23
  SPEAKER_03: Well good, Annie.
• 0:24
  SPEAKER_03: It's Friday, and um we've got a bank holiday on Monday, so yeah, uh buzzing.
• 0:29
  SPEAKER_00: Must be nice.
• 0:30
  SPEAKER_00: One of the 1900 bank holidays that uh the Europeans get.
• 0:35
  SPEAKER_00: Um I was hoping for next one the World Cup, mate, so I'm disappointed.
• 0:40
  SPEAKER_00: Yeah, yeah, yeah.
• 0:41
  SPEAKER_00: Yeah, yeah.
• 0:42
  SPEAKER_00: We it's it's it's it's another early recording uh on my side.
• 0:47
  SPEAKER_00: Although um we've been having some technical difficulties this morning.
• 0:51
  SPEAKER_00: Uh it was it was dark outside, uh, and now as you can see over my shoulder, the sun has arisen, which which indicates how much time it's taken to get this episode.
• 0:59
  SPEAKER_00: Uh you've got the whole day ahead of you.
• 1:02
  SPEAKER_00: Yeah, yeah, can't wait.
• 1:04
  SPEAKER_00: Uh I am uh delighted to uh present this episode, which is gonna shine a spotlight on Mark in particular as our resident expert in pet insurance.
• 1:18
  SPEAKER_00: And so we haven't done a pet specific episode yet.
• 1:21
  SPEAKER_00: And uh, you know, I'm fairly new to the space, uh, Lloyd's fairly new to the space.
• 1:25
  SPEAKER_00: Mark is an industrial expert in pet insurance.
• 1:29
  SPEAKER_00: And um, so Mark, we're gonna put you on the hot seat this week and and kind of just ask you to explain uh all about pet insurance and what makes it so unique relative to other personal lines.
• 1:43
  SPEAKER_00: But before we do, uh do you want to maybe just give a little bit of your background and history in the pet space?
• 1:50
  SPEAKER_02: Yeah, so me and uh a friend that I work with, I used to work in the automotive and aerospace industry, and we we decided that wasn't exciting enough for us.
• 2:01
  SPEAKER_02: So we made the switch to insurance, you know, switched it up a year.
• 2:06
  SPEAKER_02: Um, and we founded that company in 2007.
• 2:10
  SPEAKER_02: And we did various things.
• 2:13
  SPEAKER_02: Um, it was quite a difficult time to start a business because the financial crash couldn't have timed it worse, really.
• 2:19
  SPEAKER_02: Um but we started in about 2010 to get into um home insurance.
• 2:26
  SPEAKER_02: So we were working for some loss adjusters um who I think are now part of Gallagher's.
• 2:33
  SPEAKER_02: And um we suddenly realized that what we had was quite a good fit for the insurance sector, particularly around claims, which is um because the application that we built was a uh effectively a process automation platform that was very configurable.
• 2:50
  SPEAKER_02: And I mean, it was out of the blue, really.
• 2:54
  SPEAKER_02: So we'd shifted our marketing a bit on our website and and had a bit more of an insurance focus.
• 2:59
  SPEAKER_02: But out of the blue, we were contacted by a company called Capita, who in the UK that's a well-known big outsourcing organization.
• 3:09
  SPEAKER_02: And they were outsourcing pet claims for companies like uh Sainsbury's, John Lewis, Marks and Spencer's, Asda, and uh and and they were quite big in that space.
• 3:22
  SPEAKER_02: Um they they were processing about 400,000 claims a year.
• 3:27
  SPEAKER_02: Um, and you think of some of the large companies now, it's not actually not actually that far off of some of the large the numbers that some of the larger companies are doing today.
• 3:35
  SPEAKER_02: They had an old system that was based on SAP, and they had been talking to another software vendor about having that platform replaced.
• 3:48
  SPEAKER_02: Simultaneously, RSA, who no longer exist anymore, were talking to the same vendor, and they said to that vendor, actually, we really like what you're doing, and we want you to tell Capita um that we're going exclusive and they have to go away.
• 4:08
  SPEAKER_02: In the meantime, Capita had promised all of those brands I just mentioned that they were really going to up their game in terms of claims processing performance, and they were re-platforming.
• 4:18
  SPEAKER_02: So they were in a real tough spot.
• 4:20
  SPEAKER_02: So we got the call and said, Can you do pet claims insurance?
• 4:24
  SPEAKER_02: And at the time I didn't know how to spell pet insurance, but we jumped in the car and we went to go and see them.
• 4:29
  SPEAKER_02: Uh uh, and six months later, we built the platform, we migrated over a million legacy claims across, I don't know, 16 plus brands.
• 4:38
  SPEAKER_02: Um, and it was a massive success.
• 4:40
  SPEAKER_02: By the way, it took RSA another two years to get onto the platform that they were going exclusive on, so I feel good about that.
• 4:48
  SPEAKER_02: So that was the start, and that was 20, that would have been 2011-2012.
• 4:54
  SPEAKER_02: So that was our first introduction to pet insurance.
• 4:57
  SPEAKER_02: Um and that that that organization was subsequently bought by Marker Study.
• 5:04
  SPEAKER_02: Um off the back of that, and we did a bunch of PR and stuff.
• 5:08
  SPEAKER_02: Ironically, we then picked up um some business in Canada uh with RSA.
• 5:17
  SPEAKER_02: Um and and that was our first end-to-end implementation, and that was with a gentleman called Randy Volpe, who is now um who was actually an ex-colleague at True Panion.
• 5:29
  SPEAKER_02: Yeah.
• 5:30
  SPEAKER_02: And so then we started to do the policy admin piece, and really, you know, we went from strength to strength.
• 5:35
  SPEAKER_02: And you sort of fast forward to 2020, just before COVID, or maybe it was in COVID, but by that time we had 11 different companies, pet insurers.
• 5:47
  SPEAKER_02: We really doubled down on pet insurance, and we we took the decision to focus on that in 2019, and and that actually kicked off a replatforming that we were halfway through when we got acquired.
• 5:57
  SPEAKER_02: And yeah, so we had uh three companies in North America, we had two in uh New Zealand, Australia, and then the rest were in the UK.
• 6:07
  SPEAKER_02: So yeah, it was it was a huge success.
• 6:09
  SPEAKER_02: And then, and then, you know, me personally and the rest of the aquarium team, they were folded into True Panion where I was up to until um November, November last year.
• 6:20
  SPEAKER_02: So yeah, that's kind of a potted history of of the journey that we went on.
• 6:25
  SPEAKER_02: And in terms of kind of the industry, I mean, certainly, I mean the UK has has continued to grow strongly.
• 6:33
  SPEAKER_02: Um, and compared to where we were at the start uh in 2011, I'd say there's probably four times the number of players in the market now, maybe more.
• 6:44
  SPEAKER_02: Uh, and we see new entrants all the time.
• 6:46
  SPEAKER_02: We're starting to see entrants from Europe coming to the UK.
• 6:52
  SPEAKER_02: Um, the US market was was tiny kind of at that point, and now, you know, it was probably I I don't know what the latest figures are in the US.
• 7:01
  SPEAKER_02: It's still quite a nascent market in the US.
• 7:03
  SPEAKER_02: I think we're still going to see a load more growth there.
• 7:06
  SPEAKER_02: It's still maybe 4% penetrated in the US.
• 7:11
  SPEAKER_02: Market size 10 times the UK, so the opportunities there are huge.
• 7:16
  SPEAKER_02: Um, so that's kind of how the market has kind of transformed over that period or has evolved.
• 7:22
  SPEAKER_02: Um and I think kind of looking ahead now, the thing that's the thing that's interesting um about pet insurance, and if you come from a kind of home motor, maybe commercial lines world, for pet insurance, I'm not sure if everyone would agree, but for me, it's all about claims.
• 7:43
  SPEAKER_02: You know, the claims volume is off the scale.
• 7:46
  SPEAKER_02: Okay.
• 7:46
  SPEAKER_02: If you've got 100,000 policies in force, you're probably going to get something like 70 or 80,000 claims a year.
• 7:54
  SPEAKER_02: So the so the big players, the true panions in the States and the pet plans in the UK, they're probably processing about a thousand, sorry, let me get this right.
• 8:03
  SPEAKER_02: They're probably processing about 3,000 claims a day, you know, and unlike your car, you know, you don't crash a car four times a year for the next six years.
• 8:14
  SPEAKER_02: Well, if you do, you've got a problem.
• 8:16
  SPEAKER_02: You probably shouldn't be driving.
• 8:17
  SPEAKER_02: But, you know, that's that's how that's how that's how it is in in pet claims.
• 8:21
  SPEAKER_02: So the key driver now, and certainly over the past five years, is how do we how do we address that automation challenge?
• 8:31
  SPEAKER_02: And the way technology has evolved in the past 12 to 18 months, you know, there's some really, really exciting stuff going on in terms of the use of machine learning, the large language models.
• 8:42
  SPEAKER_02: Some companies are definitely further ahead uh than others.
• 8:45
  SPEAKER_02: But even, you know, using deterministic rules-based solutions for low-value claims, there's there's a there's a lot of value that can be brought by companies like ours to those particular insurers that are looking to move up the automation curve.
• 9:00
  SPEAKER_02: So we're having lots of interesting conversations with people that have done that.
• 9:04
  SPEAKER_02: A lot of people, when they start, for understandable reasons, will choose to build their own systems.
• 9:10
  SPEAKER_02: You know, the entry price can be a barrier, but once typically they get to kind of 100,000 policies and fours, things, you know, the wheels start to fall off and they need a proper insurance system and and and the regulation that goes with it and the auditability.
• 9:26
  SPEAKER_02: So that's kind of an interesting dimension that I'm starting to see with the new entrants that have come into the market over the past four or five years.
• 9:34
  SPEAKER_00: So, uh Mark, if we take a step back, I mean, you know, I I think pet policies are are in a lot of ways very analogous to human health policies.
• 9:47
  SPEAKER_00: Um, if you think about your standard private medical insurance with, you know, prescription medication coverage, vision care, dental care.
• 9:54
  SPEAKER_00: These are benefits that are probably going to get claimed on multiple times a year, as you've said, right?
• 10:00
  SPEAKER_00: 100,000 policies, 70,000 claims, very similar to sort of private medical insurance.
• 10:05
  SPEAKER_00: Can can you maybe just go into a little bit more detail about what makes pet unique on the policy side?
• 10:14
  SPEAKER_00: Um, so you know, it could be, you know, the way pet insurance is licensed, um, you know, the sort of difference between it being a PNC policy versus an AH policy.
• 10:26
  SPEAKER_00: Um, or again, I mean, if there's unique underwriting or rating elements or things that are happening, just help to eliminate.
• 10:34
  SPEAKER_00: Because I think pet is is still a fairly niche and and nascent market, as you're saying, and and probably not one that people realize there's so much nuance to.
• 10:44
  SPEAKER_00: It's it's not just you know a plug-and-play um solution for insurers.
• 10:49
  SPEAKER_02: Yeah, I think on the on the policy side, in terms of you know how we price the risk, um, you know, insuring a jack insuring a Jack Russell is completely different to insuring a Great Dane.
• 11:03
  SPEAKER_02: Um and I don't uh I don't know what a breed list would look like, but probably a modern breed list has probably two to three hundred different types of species that are all going to have their own kind of foibles and uh weaknesses that an underwriter would need to to understand.
• 11:23
  SPEAKER_02: So I think that's probably kind of one of the key things that that that makes pet insurance uh somewhat different.
• 11:31
  SPEAKER_02: In terms of kind of and and this may be true in other areas of of personal lines, but certainly the trend seems to be before before the propositions that people would bring into the market were like bronze, silver, gold, um, and a whole bunch of kind of uh cover levels embedded within that, uh, rightly or wrongly, and I think the jury's still out, but definitely the the trend seems to be to offering much more configurability at times of sale.
• 12:01
  SPEAKER_02: Um in terms of, you know, you'll have a base premium, and then you might perhaps have uh an add-on for um death benefit, holiday cancellation, um uh trip cancellation, almost a bit a bit, a bit, that's a bit like travel in that in that respect.
• 12:23
  SPEAKER_02: Um, you know, uh options for wellness, so moving away from insurance towards more preventative care.
• 12:31
  SPEAKER_02: Um, and that's much more aligned to perhaps the human health side of things, uh, and moving away from the pure kind of inadverted commas cut cover for a catastrophic event.
• 12:45
  SPEAKER_02: Um and insurers are very interested in that.
• 12:47
  SPEAKER_02: You know, if we have better preventative care, does that reduce indemnity spend?
• 12:52
  SPEAKER_02: So I think that's an interesting trend.
• 12:54
  SPEAKER_02: Yeah, but but but really kind of the modularity and kind of build your own, build your own insurance product.
• 13:01
  SPEAKER_02: How much deductible, how much copay, what the add-ons are going to be.
• 13:04
  SPEAKER_02: And then obviously at time of claim, every potentially every claim is assessed under different circumstances.
• 13:13
  SPEAKER_02: So, you know, having a system that can can handle that complexity is really key.
• 13:18
  SPEAKER_02: A lot of pri there's a lot of price pressure as well on the certainly in the UK.
• 13:23
  SPEAKER_02: There's the aggregator element as well.
• 13:26
  SPEAKER_02: Um, so a little bit of a race to the bottom, which causes which causes other issues.
• 13:31
  SPEAKER_00: So anyway, sorry, Eric.
• 13:33
  SPEAKER_00: Um Well, no, I I want to come back to the the wellness piece in a second, but it just let's let's go a little deeper now into the relationship between uh the policy and the claim, and particularly um you know that that claims channel, which is the vet space.
• 13:51
  SPEAKER_00: Because again, I I think it's it's so unique.
• 13:54
  SPEAKER_00: The relationship between uh you know pet insurers, pet claims, and and veterinarians is for me, getting into this world, you know, in the last two or three years, um, I didn't realize how unique that was.
• 14:09
  SPEAKER_00: Because the vet is not only the source of claim, it's in a lot of ways, oftentimes like a primary marketing channel.
• 14:17
  SPEAKER_00: Um I mean, for for better or worse, right?
• 14:21
  SPEAKER_00: Um, and and yet it seems like the vet spaces um, you know, it it's it's almost like, you know, if you draw the analogy with travel insurance, which I will because it's sort of my bread and butter, um, you know, you go to the travel insurance to book your holiday, not to file your lost luggage report.
• 14:41
  SPEAKER_00: And and yet at the same time, you know, the the vet is where you're paying out of pocket for some service uh because your pet needs something, provided, you know, that uh that you don't have insurance, and yet at the same time, that's where the insurance policies are potentially on offer.
• 15:01
  SPEAKER_00: Um so yeah, if you can just sort of flesh that out a little bit, Mark.
• 15:04
  SPEAKER_00: Yeah, I don't know if you can hear my dog in the background.
• 15:07
  SPEAKER_03: Can I add a component to that as well, actually?
• 15:09
  SPEAKER_03: Because I think this goes hand in hand with it and and well-timed dog bark on this uh podcast episode, if you will.
• 15:16
  SPEAKER_03: Uh Elliot's absolutely right, but one thing I've seen in the marketplace, um, certainly over the last few years, and I didn't even really realize this um un until a little while ago, is the whole kind of connection between kind of high street retailer, um, and and I kind of I kind of bring to life the example of um of pets at home.
• 15:36
  SPEAKER_03: I mean, you know, these guys have just entered the pet insurance space.
• 15:39
  SPEAKER_03: They're probably the biggest retailer of of kind of you know toys and fun things for animals and all of the kind of things that you would go and uh uh and need for your pets within their stores, they're all over the place.
• 15:50
  SPEAKER_03: Um, but in addition to that, one thing I didn't even realise is that that as an organization are one of the biggest owners of of vet practices.
• 15:58
  SPEAKER_03: They they actually own a number of vets, so you know they're kind of controlling, you know, they're controlling the whole value chain.
• 16:04
  SPEAKER_03: So I'd be interesting to sort of get your uh get your views of that kind of component as well, because I think it I think it fits into to Elliott's question.
• 16:11
  SPEAKER_02: Yeah, I'm uh that element is super interesting.
• 16:15
  SPEAKER_02: Um I mean, Pets at home is a great example.
• 16:18
  SPEAKER_02: They had effectively had licensed their brand for a number of years to other insurers, but kind of taking that in-house, um, you know, that makes a lot of sense, certainly from a kind of channel perspective.
• 16:34
  SPEAKER_02: And it's and it's it's probably, you know, it's got two prongs to it because not only do you go there for your dog chews and your food or whatever, but they've got vet practices in the store.
• 16:46
  SPEAKER_02: And it's well known that if your vet recommends a particular insurance, you're much more likely to take that professional advice, they're a trusted profession.
• 16:56
  SPEAKER_02: So that's a really that's a really interesting element of how pet insurance gets sold.
• 17:03
  SPEAKER_02: And you take the pet plan example as well, they've invested, and Trupanion actually uh in the States, you know, I think largely replicated that model, invested heavily in a field force that would go and visit vets um and effectively um, you know, have them promote their products as the best product for pets.
• 17:26
  SPEAKER_02: I mean, agri have done it a little bit.
• 17:28
  SPEAKER_02: Um, so that's really interesting.
• 17:32
  SPEAKER_02: You're starting to see larger organizations that are quite new to the market, like Doubtless, um, who have affect who have bought, if memory serves, maybe about eight companies in the US, eight insurers in the US, uh, a similar number in Europe, but have also bought veterinary practices.
• 17:53
  SPEAKER_02: Um, so really kind of looking at that kind of vertical integration and owning the whole, the whole pet journey.
• 18:02
  SPEAKER_02: Um, so that is a really interesting development.
• 18:05
  SPEAKER_02: It's this this air this topic is uh is also a bit of a minefield because there's a lot of private equity, certainly in the UK, in um in vet practices.
• 18:15
  SPEAKER_02: So there's been a huge consolidation over the past five years where PE organizations have come in.
• 18:22
  SPEAKER_02: There's this there's this tension in the relationship.
• 18:26
  SPEAKER_02: Pet insurance has enabled the care that can be offered to pets because the cover levels are so high that previously you, you know, you sadly would have done what's referred to as economic euthanasia.
• 18:40
  SPEAKER_02: But because of pet insurance, you know, there we can, you know, we can do these amazing things.
• 18:46
  SPEAKER_02: But the tension there is because we can do these amazing things, the indemnity spend is going up.
• 18:52
  SPEAKER_02: And so the pre the premiums are going up.
• 18:54
  SPEAKER_02: And so pet insurance is becoming, in some cases, unaffordable, particularly when the pets get very old.
• 19:01
  SPEAKER_02: And it's I don't think anyone yet has a good answer for how we're gonna square that circle.
• 19:08
  SPEAKER_02: There's some interesting things going on in terms of, well, look, you can absolutely spend whatever you want on this pet that's 10 years old, and you can make it live for another couple of years, and it's gonna cost 20 grand, and your insurance will pay for that, there's no problem.
• 19:22
  SPEAKER_02: But actually, is that in the best interest of the pet itself?
• 19:26
  SPEAKER_02: You're more assuaging the owner's guilt, you know, not wanting to kill their beloved dog or cat or whatever, versus um versus what what is in the best interest for the pet and potentially, you know, spending money unnecessarily and and the impact that that has on insurance.
• 19:44
  SPEAKER_02: It's a very thorny subject, and uh, you know, everyone's still trying to work that one out at the moment.
• 19:49
  SPEAKER_00: Yeah, and I think just sort of going back to the uh to to the sort of the private equity involvement in the vet space as well, I mean, that's created additional uh value chain tension, if you will, um, where there was already tension between the sort of insurers and vet channel.
• 20:08
  SPEAKER_00: I think this is this is created even a little bit more, right?
• 20:11
  SPEAKER_00: You had the sort of generational veterinary clinics who uh, you know, owner operators have aged out of the business and have sold off to private equity.
• 20:22
  SPEAKER_00: Um, there's a lack of new clinics starting.
• 20:24
  SPEAKER_00: There's you can only have so many veterinary clinics, right?
• 20:27
  SPEAKER_00: So um and the and there's a lack of that sort of local organic ownership.
• 20:32
  SPEAKER_00: And and obviously when there's private investment, there's pressure on there's a different set of business criteria that are used to evaluate performance.
• 20:41
  SPEAKER_02: Let's say um definitely one way of putting it.
• 20:45
  SPEAKER_00: Yeah, yeah.
• 20:46
  SPEAKER_00: I think the the politically correct way of putting it.
• 20:49
  SPEAKER_00: Um but I but I think you know, I think that's that's added another element of tension, right?
• 20:54
  SPEAKER_00: Both in terms of wanting to promote the insurance channel, but also in terms of of maybe scrutinizing uh time spend, uh, you know, tr treatment spend, um, you know, scrutinizing the the product catalog that's on offer.
• 21:12
  SPEAKER_00: Um so it is a very dynamic space, and in a lot of ways, like the UK is definitely the most mature pet market, and I even think it's nascent relative to what it's going to look like in 15, 20, 25 years.
• 21:28
  SPEAKER_00: I also think, and Mark, I'd be curious to get your thoughts on this, we're living through this sort of weird generational expansion in the pet market, specifically because of COVID.
• 21:40
  SPEAKER_00: In North America, I mean, pet ownership went through the roof during COVID.
• 21:46
  SPEAKER_00: And and correspondingly, you know, you saw quite a significant uptick in insured distribution as well.
• 21:53
  SPEAKER_00: Or sorry, not distribution, penetration, right?
• 21:56
  SPEAKER_00: Where maybe it was 1% prior to COVID and and and even you know, two percent is double uh, you know, prior year, right?
• 22:04
  SPEAKER_00: So um people were spending a lot more time at home.
• 22:07
  SPEAKER_00: Um they were they were bringing pets into their household, but they were also insuring those pets.
• 22:12
  SPEAKER_00: And is that trend going to continue, you know, in the next 10, 12 years?
• 22:19
  SPEAKER_02: I mean, that's that again, that is another really interesting um kind of area.
• 22:25
  SPEAKER_02: You're absolutely right.
• 22:26
  SPEAKER_02: During COVID, everyone went out and got a dog.
• 22:28
  SPEAKER_02: I mean I got one.
• 22:29
  SPEAKER_02: Um I've got two now but and you know when you when you're at home the whole time that's great.
• 22:36
  SPEAKER_02: Um but the reality is is that people are starting to return to the office now.
• 22:41
  SPEAKER_02: I was talking to my wife and in a different situation they're having this conversation about coming coming back to the office and people are going well I've I've got a dog I can't go back to the office and you know employers are going well I I'll refer you to your contract.
• 22:59
  SPEAKER_02: Kind of that's your problem.
• 23:00
  SPEAKER_02: So there is a risk I I don't know if we're seeing it play out but you know dogs being returned to to shelters which is you know which is very sad.
• 23:10
  SPEAKER_02: But also anecdotally and it is anecdotal that kind of spike uh in terms of take up I think there has been a cooling off and we're we're getting back to something that reflects pre-COVID steady state which I think ultimately is a good thing.
• 23:26
  SPEAKER_02: But the other thing about COVID those companies that kind of rode the boom in pet growth well those dogs are and cats are they're getting old now and when they get old they're gonna start claiming um and so indemnity spend is going to go up primas are going to go up they're either going to cancel their policy and you know we hear anecdotally all the time of people saying oh I've just got my renewalists off through the roof or or they're gonna be paying more.
• 23:55
  SPEAKER_02: So that you know and certainly the you know the insurers are going to be paying more.
• 23:59
  SPEAKER_02: So that is where are we now?
• 24:02
  SPEAKER_02: So yeah you know we're just about to go into that window.
• 24:07
  SPEAKER_02: So it'll be interesting to see how the market shakes down as a consequence of that.
• 24:11
  SPEAKER_02: And maybe you know maybe someone super smart will come up with a solution for that.
• 24:16
  SPEAKER_03: So yeah well it'll be interesting to see.
• 24:18
  SPEAKER_03: On that basis Mark you've you've kind of raised some really interesting points that kind of really pose big challenges to insurers right so you know we're talking about claims costs going up we're talking about the fact that you know a boom of animals that was bought during COVID are going to get to a point now where they're gonna start to see more issues that that are going to need to be highlighted and flowered to the insurers.
• 24:39
  SPEAKER_03: But one thing I would say and we know this sat around this table and we're seeing it in the marketplace and we're seeing it in the press there's never been more interest in pet as an insurance space in in all the years I've been in insurance with a number of re you know a number of insurers, retailers you name it wanting wanting to get in.
• 24:57
  SPEAKER_03: Why is that?
• 24:58
  SPEAKER_02: Or at least why do you think that is I don't I don't know why that is and I I do know that insurers see those areas as underserved and areas for growth.
• 25:11
  SPEAKER_02: Amanda Blanc at Aviva stood up uh not that long ago um may have even been last week or the week before and said there were there were kind of four pillars to their growth strategy over the next short to medium term.
• 25:26
  SPEAKER_01: Insurance um vehicle recovery um I can't remember what the other two were um one of them might have been commercial actually and so if you look at completely saturated markets and where's the growth coming from you know where's the story back to the market and I think that's why some insurers are kind of starting to to explore that as an as an engine for growth if you look at if if you look at just to finish off if you if you look at some of the larger general insurers they have these huge books of business and relationships with customers and you know it's an opportunity for them to why why wouldn't we sell them pet insurance?
• 26:05
  SPEAKER_02: We we know we know about these households I don't know what it is in the UK 50% of UK households might have a dog or something like that.
• 26:12
  SPEAKER_02: So that's so there's huge potential there.
• 26:15
  SPEAKER_00: Yeah I think I think the the marketing potential uh and and just honestly uh the the extremely low penetration of pet insurance to pet ownership is is one of the biggest factors but I also think that only becomes a relevant data point uh because of the unbelievable integration of the pet insurance value chain.
• 26:39
  SPEAKER_00: But like the the channel relationships in pet I think are so unique relative to other lines of insurance.
• 26:47
  SPEAKER_00: You know I think I think in the in the everything everything adjacent to a pet features into the insurance value chain which just isn't the case for any other sort of consumable good right the the the correlation between auto and auto insurance the correlation between like the product and the insurance product isn't is I I haven't seen it so tightly coupled.
• 27:10
  SPEAKER_00: And and I think that then creates like this ability for the invisible hand of the market to find innovative solutions Mark to the exact problems you were highlighting.
• 27:20
  SPEAKER_00: You know maybe pet boarding or maybe pet dog walking or cat like maybe these sort of solutions will will spring up in order to support the you know the problems in the industry tomorrow.
• 27:34
  SPEAKER_00: And I think then you know the insurance policy will react very quickly.
• 27:39
  SPEAKER_02: Its benefits will change in order to accommodate for uh okay well you know we have these you know uh these uh dual income households where people don't want to leave their pets alone all day maybe we need to provision for dog walking service and and I think that that gets us into that who ever heard of a dog walker like five years ago um but you know I know family members they have they have dog walkers in part because of the COVID piece they have to go back to work well who's gonna walk the dog um it's but it's sprung up as a kind of sidebar industry um yeah and I think don't know if they have insurance I think there's loads yeah I think there's loads more we can get into on this topic.
• 28:25
  SPEAKER_00: Sadly our time has run out for today uh but I'm I'm foreshadowing an uh an episode two here because uh yeah I think there's there's a ton more that we can get into here.
• 28:36
  SPEAKER_02: So um yeah something that we didn't talk about with InsuraVet connectivity I think that's gonna be transformed in the next five years and that will have a big impact on on kind of how we look at pensions.
• 28:47
  SPEAKER_00: Amazing well we will we will yeah exactly we'll stay back the next time uh Mark Lloyd it was uh wonderful to speak to you and hope you enjoy your weekend we get a good everybody else thank you until next time guys take it to the money