The UK’s Admiral Group has brought its new Admiral pet insurance product in-house with a new offering, powered by our FintechOS innovation platform. Why is pet insurance being targeted by industry players, and why specifically digital pet insurance?
COVID-19 lockdown created a surge in pet ownership as people working from home were now suddenly able to spend the time with the pet they always wanted. As a result, the Pet Food Manufacturers’ Association found that 3.2 million new pets were acquired by UK households from 2020 to 2021.
However, 86% of UK pet owners have not insured their pets, according to YouGov. The insurer that can crack why this market is so underinsured will thrive. That’s why analysts like Allied Market Research are predicting the global pet insurance market could be worth USD 16.8 billion by 2030.
As a result, there’s been a 10% surge in the number of pet insurance products on the market, according to Consumer Intelligence, as insurers compete to enter the space.
Admiral pet insurance is just the latest product to launch. We’ve seen market players from Revolut to Lemonade rushing pet cover products to market in recent months. So, how can providers compete with innovative disruptors to get their share of this sector?
We believe the key is tailored, personalized, digital insurance. Unlike other forms of property-based insurance, pet cover is arranged out of a sense of care. People want to protect their pets as family members, rather than as replaceable assets.
To persuade pet owners of the value of cover, insurers must show that they care about pets as much as their owners do. They can only do this with flexible, tailored cover that adds value even between claims, just like Admiral pet insurance.
For another example, take Lassie AB. This Swedish pet insurtech recently raised EUR 2.34 million in seed money by offering an app that provided customized petcare advice. Those that read the advice and complete quizzes on their petcare habits earn discounts on their premiums. This kind of service can only be offered through digital.
Digital transformation, however, has always been a nadir of the insurance industry. Most established insurers have been operating for a hundred years, and legacy tech remains an anchor holding back innovation.
Admiral pet insurance is an exception to that rule. From humble beginnings in 1993 as the car insurance division of the Brockbank Group, Admiral is now the largest car insurance provider in the UK, among the top 20 UK insurance providers overall, and a leader in market innovation.
In 2005, this led Admiral to become the first to market with Multi Car insurance policies for households with more than one car. Success in this area led Admiral to become a market innovator in bundled and embedded insurance options. This keeps churn rates below the industry average, even in the price-sensitive and aggregator-intermediated UK insurance market.
Admiral pet insurance has been offered for some time, but only through a third party. Seeing the potential of the market, Admiral wanted to bring its pet insurance offering back in-house. Yet, even such an innovative insurer as Admiral felt the pressure of a tight time-to-market constraint.
Pet insurance has different requirements to home or car, needing to align and embed with the veterinary care market, which could be expensive. Not to mention, any product Admiral releases has to meet the high standard of customer service the brand implies.
Considering the available options for creating a pet insurance offering, Admiral realized that there were ways to rapidly create innovative digital products that could be easily connected to any other system.
Employing the FintechOS platform, Admiral was able to create its own digital pet insurance product in just over six months, meeting its pet insurance go-live deadline with time to spare.
Not to mention, the finished product had all the capabilities Admiral required to meet its high standard of customer service, and stay within budget. The finished product even included a Multi Pet option, and will soon be embeddable with other Admiral products.
As Pritpal Powar, Head of Admiral Pet Insurance explained:
Our focus at Admiral is on providing high-quality, high-value products and services to our customers. With the FintechOS platform, we were able to meet our aggressive launch deadline, while also delivering an innovative digital pet insurance solution.
Our platform functions as a digital glue that connects legacy insurance systems with the digital insurtech world, without the kind of rip-and-replace digital transformation that so often fails.
Without digital transformation, insurers are unable to enter the digital markets that are overtaking the industry. By 2040, the eldest members of Gen-Z – a generation that grew up with mobile phone technology – will be in their 40s, and insurers that don’t embrace digital options will find themselves locked out of the market.
Yet, digital transformation is complicated and expensive. According to a BCG survey, 70% of companies fail at digital transformation and receive almost no return on their investment.
The only way forward is to find a way to enter digital insurance markets without having to go through a digital transformation. Thankfully, the FintechOS platform allows you to do just that, and innovative insurance products like Admiral pet insurance are already employing them.
To find out more about how we helped launch Admiral pet insurance, see our pet insurance solution page.
