Pet assurance and pet wellness could be set to replace traditional pet insurance as the standard for the industry. This new wave places pets as a part of the family to be protected, rather than just a possession that could be damaged.
Pet insurance used to be about covering the monetary loss incurred when livestock or a home security animal was damaged. Yet, modern households consider their pets to be members of their family they want to protect. This leaves pet insurance more akin to health insurance than property and casualty.
Modern pet insurers are taking this into account by prioritizing the health and wellbeing of pets over their cost. This includes a range of value-add pet assurance services maintaining pets’ wellbeing, rather than just cover that only becomes relevant when pet health is already failing.
Why has this change in the market come about?
With around 70% of American households containing a pet, representing a pet in more than 90 million homes, it’s no wonder that the pet insurance industry hit more than USD 123 billion in 2021.
Of course, high rates of pet ownership also mean there are associated costs. According to the American Pet Products Association, the amount of money that Americans spent on vet bills in 2021 came in at USD 34.3 billion. This included all manner of pet assurance costs, including routine veterinary care, surgical procedures, and sales of pharmaceuticals and other products through veterinary clinics.
A 2021 APPA survey found that, on average, participants spent the following amount per year on their dogs’ and cats’ vet bills:
Statistics from The North American Pet Health Insurance Association (NAPHIA) State of the Industry Report 2022 Highlights indicate that people spent nearly USD 2.6 billion on pet insurance in the US. Yet, only 4.41 million pets were insured in 2021, leaving a lot without insurance.
This is because many don’t see the benefits of pet insurance in their day-to-day lives. Instead, providers should move towards offering pet assurance in a similar way to health insurance. This helps customers to care for their loved ones on a daily basis throughout their lives.
Pet insurance coverage is crucial for all pet owners. If your pet gets injured, has a medical emergency, or requires a trip to the vet, you want to know that you can afford for your pet to get the best treatment possible. With insurance coverage, you can feel secure knowing your pet will be taken care of.
Pet insurance pays out when a pet is injured, ill, or passes away. It provides much-needed peace of mind in cases of accidents or emergencies, and even for help with funeral costs. However, customers pay monthly, but only ever receive benefits if something happens to their pet. Some people simply can’t afford the insurance cost, but also wouldn’t necessarily be able to fork out a large chunk of cash if something went wrong.
Pet wellness plans, on the other hand, offer options to help keep pets healthy and happy. Rather than just paying for treatment, owners would receive for regular pet wellness check-ups and quality-of-life treatments. By combining the two, you may be able to convince customers to buy into the industry when they otherwise wouldn’t see the need.
As with traditional pet insurance policies, pet assurance plans vary. They won’t always cover everything, but some things that are often covered by a pet wellness plan include:
While a pet assurance plan usually won’t help pay for treatment, it can be offered alone or as an add-on to traditional pet insurance plans, allowing customers to choose a full range of care for their pets. By providing preventative care and giving customers access to real-time information about the health of their pets, you treat them like they treat them – as part of the family, rather than a commodity.
When we speak about pet wellness plans, it’s what we mean by moving from pet insurance to pet assurance. By creating a pet wellness plan add-on to traditional insurance, you can offer customers the value of peace of mind from feeling their pets are safe and cared for through every part of their lives, not just when things go south.
To successfully offer wellness plans, you need to track much more than just what the pet is worth if it dies. You need to have real-time access to pet health records, offer connections to a vast range of third-party services and options, and offer additional value yourself.
The cost of veterinary care is rising, which has led to more pet owners looking for cost-effective alternatives. Pet assurance plans are one way to help control costs, but they aren’t easy.
A pet assurance plan usually includes a long list of services that must be offered for it to be successful. One of these services is the ability to track in real-time a pet’s health records so that customers can make informed decisions about their pet’s care.
Having these records also helps you to provide accurate quotes to your customers and offer competitive rates for the plan. Having easy access to each pet’s health records streamlines the process of paying out for claims, making things simplified for both you and your customers.
To manage all this, you need the insurtech necessary to track and manage huge amounts of data, and to connect your products with a huge range of third-party products and services. The FintechOS platform is designed to be flexible, utilizing data as the core of your system and linking your technology with any other platform you need.
Providing pet wellness plans moves you beyond offering a backup that only becomes valuable in the case of a claim to providing a monthly subscription package that gives regular and ongoing value to customers. By being a part of their day-to-day life, customers are more likely to think of your company when considering additional products. Rather than purchasing from your competitors, customers may choose to keep their financial products under one provider, leading to repeat business and higher revenue.
Pet wellness plans are a new type of relationship that you can offer to your customers. It’s more than just a backup plan; it’s a monthly subscription that has real value for your customer every day.
To find out more about the FintechOS pet insurance solution for pet assurance, see our pet insurance solution page.
