Clawing back pet insurance losses thanks to new technology
Something needed to be done after a fourfold fraud increase in the pet insurance sector, and thanks to new technology from Aquarium Software, insurers can now make fraud reduction their pet project for 2014 and beyond.
Three years ago, pet insurance fraud reached the £2m mark in the UK. The reason the 2011 figure is so significant, is because in 2010 it was just £420,000. Given the market is far from saturation-point, insurers need to bite back against the fraudsters, and technology is top dog when it comes to clawing back losses from fraud. Aquarium software has a proven track record of improving efficiency in traditional insurance sectors and is now showing its pedigree in pet insurance, helping clients like Markerstudy and RSA’s Pets Plus Us identify bogus claims - but there’s a lot more to it than that.
Aquarium’s development in the insurance sector includes integration with third party suppliers (vets & pharmaceuticals) and cross referencing of claims with client and address histories as part of comprehensive anti-fraud countermeasures. But these systems are only going to work with a holistic approach to the problem by the industry as a whole – an approach that the sector cannot afford to ignore.
“Some insurers have looked at pulling out of the pet market, but with just 35% of UK pets covered, there is untapped growth potential,” said Aquarium Software’s Sales and Marketing Director Mark Colonnese. “One finds fraud follows increased sales but with the right technology, fraud can be fought head on. If all of the industry puts its house in order, there is no reason why this product should end up in the doghouse.” Mark says there is an argument for saying pet insurance has been underestimated by the industry – in terms of its potential for growth and fraud. As the number of claims has risen, the number of payouts has dropped and what is becoming clear is that the product needs treating with the same intellectual rigour (and indeed the same software) as any other insurance product.
“Applying the same methodology and technology to pet insurance as we already do to other forms of insurance will let the market climb out of the hole some seem to have dug for themselves,” added Mark. “Fraud registers have been around for car and home insurance as a means to identify bogus claims and there is a clearly a strong case for this here.”
Like its human counterpart, veterinary medicine has made enormous strides in recent years and many conditions that would have killed an animal in the past are now treatable – at a price. This has led to a worldwide expansion in pet insurance. The supermarkets have entered the market and lowered premiums but time will tell if they have the right model and how people will respond to a ‘value’ versus ‘finest’ choice when it comes to insuring their four legged friend.