$71million IPO Power Play shows potential for pet insurers with right approach and systems
News of Seattle-based pet insurance provider Trupanion’s successful floatation on the stock market with an Initial Public Offering (IPO) raising $71 million, is a revealing insight into the sector, according Aquarium Software Inc.
“This move by Trupanion shows a real power play within the market,” explained VP Sales & Marketing, Mark Colonnese. “Pet insurance can be a very lucrative sector for providers with the right technology approach and what’s going to be interesting is what their strategic plan is going to be in order to return a profit for investors.”
Last year Trupanion lost $8.2million and it has accumulated an overall deficit of $41million. Yet according to industry watchers at Aquarium, far from reflecting a failing sector, this IPO shows most clearly that pet insurance remains a growth market in the US, North America and Europe.
“What we know is the market so far has responded strongly with shares up around 14% since the IPO,” added Colonnese. “But there will be lots of eyes on the figures and ongoing performance of the business. Efficiency is really key for pet insurance providers and in order to maximise efficiency providers need to have software that is performing the right tasks for them. Trupanion will have to deliver on this as well as the multitude of other factors a business need to get right to succeed or face the wrath of their investors.”
Aquarium specialise in providing tailor made software solutions for pet insurers, and Colonnese believes that the key to a success lies in the efficiency, flexibility and intelligence of a provider’s systems.
Too many times Aquarium has examined clients’ existing set ups and found resources and time being wasted performing processes their software could be performing automatically. Worse still, some systems are producing thousands of irrelevant reports that might provide a management ‘comfort blanket’, but deliver little or no meaningful MI (Management Information).
“Time will tell if Trupanion can turn things around and go on to become a significant player,” says Colonnese. “Any company who has factored software and MI into their thinking, I wouldn’t bet against. The pet insurance market has untapped potential and if this can be harnessed with the help of an IPO, the right software that delivers an enhanced customer journey for all pet parents, an £8.2 million loss today could seem like bird feed against the potential turnover tomorrow,” Colonnese adds.
Insurers ignoring the importance of the ‘customer journey’ do so at their peril. The ‘pet parent’ expects a certain level of interaction at all stages during what is often an emotional claims process, anything less is perceived to be simply unacceptable and will, without doubt be reflected in policy renewal and attrition rates.
“We receive regular enquires from existing players and new entrants to this market and they all have one thing in common – the need to install the infrastructure that will support ambitious business plans,” suggests Colonnese. “What is clear to us as leaders in the technical field, is customer journey is essential and as with conventional insurance products, clients expect to be guided through all stages of the process from policy inception to claim,” says Colonnese.
“The Trupanion case shows two things. Pet insurance is by no means a ‘golden ticket’ of assured success; however, interest in the company’s floatation demonstrates the confidence in the sector. By managing processes properly, it is certainly possible to transform even a dog’s dinner into a compelling pet brand that is financially viable with long term stability and success,” he concludes.