Swedes are super troupers of pet insurance market
A recent major pet insurance fraud case in the UK could have been totally avoided, if we were more like the Swedes, according to US and UK based Aquarium Software. Sweden, a land best known perhaps for pop music, interior design and robust cars, is also a trailblazer when it comes to pet insurance; Sweden has a high proportion of pets insured, and an innovative collaboration model that we could all learn from, according to Aquarium’s Mark Colonnese, VP of Aquarium Software Inc.
The Scandinavian country recognised early the importance of working closely with partners to achieve a viable business model. This was highlighted in a recent UK case where collaboration of police and insurers led to a successful prosecution for pet fraud. Such collaboration is now available to all, thanks to the latest software advances.
“From correctly pricing premiums for different breeds and species, to developing new products and identifying fraud, collaboration with partner agencies like the police and vets is essential,” said Mark. “Insurers that can do this have an advantage over competitors and can demonstrate a correspondingly viable business model. The latest software means everyone can deliver a better deal for pets and pet parents in the process.” The Scandinavian animal insurance market was born when the first horse was insured back in 1890 and for many successful providers, collaboration with other animal organisations has clearly been a significant factor in the success of the industry. One such company is Agria, who entered the UK market back in 2009 and recently delivered some of their insights to a US audience, including Aquarium’s Colonnese.
“I heard Simon Wheeler from Agria UK deliver a thought provoking analysis on the European pet market at the NAPHIA Summit in the US earlier this year and while the US Market is clearly playing catch up with Europe, there is also a lot the UK can learn from Sweden,” added Mark. “There is no substitute for experience but software that stitches the whole customer experience together from vet to insurer is the key to unlocking the rapidly changing face of modern pet insurance.”
Only around 20% of dogs and cats in the UK are insured, in contrast to world-leaders Sweden where around 50% of pets are covered. The first ever pet insurance policy was written in 1924 for a dog (again in Sweden) and since then the country has adopted the idea in large numbers. The first pet insurance policy was sold in Britain in 1947, yet the idea hasn’t taken off as much as some would have hoped.
“The UK market was not been helped by some underwriters in the early days concluding pet insurance was not a viable business, but the Swedish model and a host of successful insurers both here and stateside, show it can be, if it is treated with the same respect as traditional insurance,” added Mark. “If pet insurance not treated as just a ‘pet project’ then it has massive, untapped potential.”
Demand for Aquarium’s pet insurance software is growing in new markets overseas, (particularly in the US) while here in the UK, research from Samsung shows we are spending on average over £13,152 on our pets in their lifetime. Less than 1% of American pets have insurance cover, (compared to circa 20% of UK pets) but the market is estimated to be worth $750 million in 2015. With investors getting involved and profitability leading growth in the sector and a reduction in premiums, there is no reason why this should not be mirrored in UK.
“The UK and US currently have relatively small penetrated markets, but the potential is there,” added Mark. “Providers are now getting their act together and as efficiencies and better ways of collaborative working deliver more realistic premiums for pet parents thanks to improved fraud detection and a viable business model for providers, an improving customer journey means this market is only going one way.”
Aquarium has a long history of providing software for the insurance industry. Its software utilises the cloud as well as ‘management by exception’ to improve both the efficiency and effectivity of an insurer’s claims strategy, whilst at the same time improving the customer journey.