Pet Score from CRIF enables insurers to better assess the risk associated with pet insurance policies based on geographic location at a micro level. Integrating this new, additional data into the premium pricing process at point of quote means insurers can confidently price policies more competitively, assisting growth in market share, improving profitability and preserving loss ratios.
This new pricing sophistication tool launches as the Association of British Insurers [ABI] reports on pet insurance statistics for 2022 which clearly demonstrate higher pressure on policy pricing. Claims volumes, at 1.3 million notified, are the highest on record, up by 28% on 2021. Pay-outs, at a record-breaking £1 billion, rose 17% on the previous year. Meanwhile, the average pet insurance premium was £327, up marginally by 1% on 2021; but treating sick or injured pets is increasingly expensive with rising vet costs.
Historically, pet insurers’ rating engines have focused on the breed, age and diseases of the pet. Should geography ever be taken into consideration, it has been at a macro level. Pet Score is set to disrupt this approach, offering insurers a risk score based on data extracted and analysed at postcode district level. The CRIF algorithm uses a number of different variables which the company developed and optimised for the pet insurance market. These include the housing and economic conditions of the area together with urban architecture, in order to predict the probability of a pet experiencing a negative event requiring treatment covered by the insurance policy. The score means insurers are equipped to understand different degrees of risk within small geographic areas and can price their premiums accordingly, supporting strategies to grow market share and increase profitability.
Pet Score complements CRIF’s existing suite of solutions for pet insurers which include the first centralised pet claims database and bespoke fraud detection tools for the pet insurance market. Access to Pet Score is via simple file transfer and requires no up-front investment in technology integration. Regular data updates are provided by CRIF.
Sara Costantini, Director at CRIF Decision Solutions said:
“The pet insurance market is seeing many new entrants and competition to retain and grow market share is becoming much stronger. At the same time, the cost-of-living crisis is causing pet owners to shop around for their insurance cover and more pets becoming underinsured or uninsured. Pet Score gives pet insurers, whether they are well established or new to the market, a sophisticated pricing tool which they can use at policy renewal and inception to help them retain existing customers and win new ones. Competitive advantage comes from the ability to simply integrate Pet Score with their rating engine and flex their premium pricing based on this new, previously unavailable intelligence. We are excited to be offering pet insurers the opportunity to test Pet Score against an historic data extract in a proof-of-concept exercise, to demonstrate unequivocally how this new solution can help them to hold onto and grow market share profitably.”