Could pedigree breeds prove to be an insurance pup?
Aquarium Software, the leading pet insurance technology integrator, warns that pet insurance premiums for specific pedigree breeds could increase in the future, as insurance providers become savvier about the financial risks associated with insuring designer pets. It is widely understood by the industry that certain pedigree breeds are more at risk of developing particular conditions and needing certain operations, but how is this information being aggregated, and are consumers getting a fair deal?
Aquarium Software’s Sales and Marketing Director, Mark Colonnese, says: “Without the development of an integrated central pet data warehouse, pet insurance premiums will not be underpinned by sound analytics based on actual risk. This is a double edged sword; pedigree pet parents may not currently be paying enough, while thousands of non-pedigree owners may in fact still be subsidising pedigree premiums.”
The risk of serious inherent health problems developing in pedigree breeds is significant, due to years of over-breeding that has created specific characteristics. This is reflected in current pet insurance premiums which are typically calculated by the pet’s age, postcode, its microchipping status and its breed.
Pedigree pets are generally more expensive to insure. Currently, these costings appear to be fairly arbitrary, based on claims experience, rather than on quantitative, reliable, shared data about specific breeds and the veterinary fees to treat inherent conditions. More unified and intelligent technology platforms will lead to improved MI (management information) which will allow insurance premiums to be based on more precise evidence-based risk assessment.
“It’s by no means certain that all insurers are pricing premiums for pedigree pets in the same way,” added Colonnese. “We suspect that vets’ data about particular breeds is not being stored and shared with consumers. We should be looking towards premiums based on actual risks; this will make premiums for pet insurance for more competitive and permit greater take-up and retention by consumers.
“Clearly this is in the interest of both insurers, who grow the overall size of the market and consumers who get a better priced product.”
Aquarium believes a collaborative approach with a national pet database where information is shared across all agencies, insurers, vets and pet parents makes absolute sense. With smart data, pet parents and insurers alike can then access all the facts upon which premiums should be priced.
“Smart data has been touted as a solution to fraud and as a means to improve pet health and cut premiums but for it to work, the industry needs the smart data design and management to go with it. Specialist software platforms can allow such data to be shared between not only agencies, but customers, too. People may choose to buy different breeds in the future if they had the full facts about the risk of buying a particular breed. The insurer can deliver that all important customer journey while the pet parents will be paying a fairer premium and with it end the days of pooches’ pounds propping up pedigree premiums,” concluded Colonnese.