Pet Insurance

The face of the insurance industry is changing rapidly: big banks and supermarkets are now offering insurance and subsequently cutting deeply into the traditional pool of potential and existing clients of independent brokers. In order to meet the challenge head on, it is important first to re-assess the portfolio of products available to clients. Products should meet the ongoing needs of existing clients in all stages of life; be represented by carriers who offer clients a superlative customer service experience; come with price competitive premiums and coverages; and provide the flexibility that consumers are looks for.

New and alternative products are a form of retention tool: they can be applied to an existing client base or used as a marketing tool to bring in new clients. Pet insurance is a potential product that may pull ahead of the pack; however, it is also overlooked by independent brokers.

PRECIOUS PETS, AN INSURABLE COMMODITY

Pet owners present a plentiful consumer base. More than 55% of households include one or more cats and/or dogs; More than 80% of households is consider a pet to be a family member. Elderly pet owners who are particularly likely to become attached to their pets. Although the majority of caring pet owners are prepared for the ongoing expenses of pet ownership, most do not financially prepare themselves for the unexpected accidents and illnesses that are likely to occur during the life of their pets.

Statistics indicate that one in three pets will need emergency veterinary treatment every year. Two out of every three pets will experience a significant health problem during their lifetime, many of which will require costly diagnosis, treatment and medication.

Over 90% of pet owners would pay “any price” to save their pets life, but the personal cost may be to high. In particular elderly pet owners are often living on a fixed income and may not be able to afford the excessive costs needed to support their pet’s health. However, insurance would allow them and the other wide array of pet owners to care for their pet without concern or extreme financial strain.

MAKING THE CLAIM

Unlike the American community, Canadians have the benefit of provincial health coverage for their own health. This leads to the reality that clients are generally unaware of the real costs of medical treatment for human accidents and illnesses; consequently, veterinary bills for their sick pets can come as a very unwelcome surprise. Some of these costs may be more extreme than others: the field of animal medicine has advanced rapidly in past decades, allowing veterinarians to enhance their treatment. Pet owners today have access to X-rays, MRIs, CAT-scans, chemotherapy and any number of other treatments (both traditional and/or holistic) and medications for the health needs of their pet. But these measures come with a price tag that many cannot justify.

Pet owners who have insurance policies to cover their pet care needs find security in claims that result from a wide array of health issues (See Table 1). The claim profile of pet insurance will improve customer relationships and retention, since pet insurance is an insurance product that in all likelihood clients will use. Approximately 20% of pet owners that insure their pets make claims every year.

SNIFFING AROUND, THE BEST BET

Currently, a number of pet insurance providers are available, but an interested insurer should do their homework before deciding which company to choose.

The following questions should be considered before deciding on a provider:

* Does the company work with independent brokers? What is the compensation?

* Will the products offered provide your clients with the flexibility/coverage that they require at prices they can afford?

* Do they provide coverage for cancer? Hereditary defects? Holistic treatments?

* Are all pets guaranteed acceptance?

* Do the premiums rise as the pet ages, or as the insurance is claimed upon?

* Do they offer any other benefits? Discounts for multi-pets or for microchipped pets?

The onus is on the broker to provide their clients with the correct and best information on pet insurance. Although people love their pets, currently less than 1% of companion animals in North America are insured and more than 85% of pet owners do not find out about pet insurance until it is too late. The sad reality is that there are instances where beloved pets are euthanized due to financial considerations. An insurer can, however, protect consumer concerns and boost their consumer base by integrating pet insurance into the portfolio.