China in their hands for bulldog UK insurers
With an annual growth rate expected to be 32.8 per cent by 2020, penetration of the massive and emerging Far East pet insurance sector is the next ‘pet project’ for the global insurance business, according to leading pet insurance technologist, Aquarium Software. Aquarium believes it is likely to be a case of ‘who dares wins’ for early adopters in China and the Far East; and as news and data continue to reveal the changing attitudes to pet ownership in China in particular, Aquarium says it has long recognised the huge potential of the Asian market.
Go back ten years and pet ownership was almost unheard of in China, but now with over 100 million pets, China has emerged as the third largest pet owning country after the US and Japan. While big pet food brands got in early and are enjoying considerable success as a consequence, bosses at Aquarium say pet insurers need to do likewise and take the lead as pet insurance transforms into a global product.
“Despite this booming market, we know few Chinese pet parents have insurance,” said Aquarium’s VP Sales & Marketing, Mark Colonnese. “This is not due to a lack of interest, but rather lack of insurance aavailbility. Pet insurance is failing to keep pace with Asian demand and there is such a huge opportunity for trusted brands to gain a market advantage and good traction in virgin territory, China can, quite literally, be in your hands.”
As pet insurance in the west moves from ‘desirable’ to ‘must-have’, there are few opportunities to tap into a market with such huge potential and so little product saturation. Colonnese and Aquarium have spent the last three years talking about this market and are convinced the time is ripe for this niche market to go mainstream.
“Some pet insurance brands have been daunted by the numbers involved and a desire to avoid introducing risk into their portfolio, so a slow start is perhaps unsurprising,” explained Colonnese. “Yet effective software solutions can tame this particular dragon. We need to avert on the one hand a ‘China crisis’ of pet parents unable to find affordable cover and on the other hand, high cost, poor products due to lack of engagement.”
Scandals that have dogged Chinese companies have allowed big brands to seize market share in pet food and anyone moving into the Asian insurance market would not wish to sacrifice hard won consumer trust with policies not market ready. But modern technology and software can deliver the necessary customer service, products and profit.
“There is no doubt that global pet insurance is taking off and it is possible to nail the risk profile without having to sacrifice customer journey,” added Colonnese. “The perception of pet insurance as a niche market with limited profit and high admin costs (if ever true) has been completely turned on its head. The advent of internet sales and cloud technology has slashed the administrative burden. As more firms realise this, it early adopters will light the blue touch paper for the Asian market as those brands first to market will have an advantage in terms of consumer trust.”