Earnix Report on Pet Insurance Market: Loads of Potential

So many people bought a lockdown pet back in 2020 and those who have stuck with their furry – or feathered – friend, will know that vet bills can be high. So the pet insurance sector is growing in the UK. One brand that made a breakthrough in the last 3-4 years is Bought By Many, which tapped into the rewards trend nicely and offers pet owners all kinds of useful advice. There is so much potential still across the pet sector for insurance brands to learn more and reach an enthusiast market with affinity marketing online.

Here’s some thoughts and insights from Earnix;

A market on the rise

According to a UK Pet Insurance Market Report 2022 conducted by Mintel, UK insurance premiums achieved £1.39 billion in 2021, a 12% increase on 2020. In the UK, 57% of consumers own at least one pet and 20% of pet insurance buyers plan on switching to a cheaper policy within 12 months.

Mintel predict that developments in technology are expected to boost pet insurance industry growth as digital tools can be used alongside pet insurance to improve overall pet health. This in turn, suggests a trend towards holistic pet care products which has a strong potential benefit for the market if brands use tech to develop flexible and personalised cover, increasing consumer engagement.

Intelligent insurance operations

In a fast-changing world, insurers in all lines of business cannot afford to stand still. Accenture recently highlighted the need for insurers to extract value from data and thread intelligence into their operations to meet tomorrow’s performance aspirations. Failing to do so creates a real risk of falling behind competitors without meeting customer expectations, the firm warned.

According to Accenture, 83% of insurers say data is in wide use or in use at scale in their operations and 57% expect to use analytics with diverse data by 2023. But only one in five uses analytics at scale today, “signalling a daunting gap between today’s reality and tomorrow’s aspirations”.

“Insurers need to evolve what’s happening on the inside. Fast,” Accenture said. “With intelligent operations, insurers can elevate decisions and boost profitability and efficiency gains today. It’s about reaching new levels of operations maturity to choose smarter, act faster and win sooner. It’s about becoming future-ready.”

MODERN TECH CAN HELP PRICING

For pet insurers, a major opportunity lies in modernising their approach to pricing and rating. Despite increased regulatory scrutiny, pet underwriters still have relative freedom in how they choose to segment risks and optimise pricing, yet most employ rating tools that only consider a handful of basic variables such as pet breed, age and country.

This means they do not gather enough data to differentiate between a good risk and a bad risk, and often end up on the hook for claims they shouldn’t be paying. Bringing more granular data into rating algorithms – from local weather or crime data to nearby pet walking facilities or customer credit scores, for example – and intelligently analysing it is essential to properly assess risks, generate accurate prices and improve combined ratios.

Insurers in motor, home, life and health are increasingly embracing technology to enable intelligent underwriting and price optimisation. While pet insurance may still be a long way off those markets in sheer volume, there is no reason why pet insurers shouldn’t be using the same tools and reaping the same rewards. Those who seize on the solutions that are already in widespread use today will gain a competitive edge over slow movers and position themselves for sustainable growth in the years ahead.

About alastair walker 10540 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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