According to the latest market research report from Fortune Business Insight, the global pet insurance market is projected to reach USD 11.25 billion by the end of 2026; in 2018 the market was worth 6.05 billion USD.
The UK pet insurance market remains under penetrated and increasingly competitive, representing significant growth opportunities for pet insurers who are equipped with the right tools to provide them with enhanced customer insights, improved operational efficiencies and the ability to detect fraud.
Figures published by the Association of British Insurers (ABI) in April 2019 revealed that, in 2018, more pets were covered than ever before – with nearly 4.3 million UK pets being protected. Cats made up a very small proportion of pets insured despite there being an estimated 7.5 million in UK households. Only 1.3 million cats are insured compared to 2.8 million dogs.
But pet insurance is not just for cats and dogs as there is a growing number of non-traditional companion animals in the UK which include birds and more exotic pets like amphibians, chinchillas, ferrets, geckos, potbellied pigs, lizards and more.
According to the Pet Food Manufacturers Association, in 2017 there were 1.4 million pet reptiles and birds and 15-20 million indoor fish in the UK. Many non-traditional companion animals have very specific health needs and require vet consultations when they become ill or injured which can be costly for owners – particularly as we enter a period of economic uncertainty following COVID19 when household finances may be stretched. Insurer appetite to grow UK pet market share is self-evident.
In May 2020 Animal Friends and Aviva launched a partnership which will see Animal Friends providing and managing pet insurance for new customers. Customers will also receive complimentary access to an online veterinary service provider, Joii, which features a free symptom checker as well as video consultations with vets and information on a range of pet related topics.
In the same month, Bought by Many, the first UK pet insurance provider to offer online claims processing and the removal of the 14 day waiting period to claim for switchers, announced it ,raised £74.8 million in growth equity funding from US based private equity firm FTV Capital. Sales of the insurer’s cat and dog policies have increased by over 150% in the last year and following its launch in 2017 the company now has over 200,000 policy holders and ambitious plans to grow. However, the 2019 ABI figures for the UK pet market also revealed that despite the average claim climbing by £36 to £793, average premiums were down slightly for the first time in eight years at £279 compared to £281 in 2018.
It is significant to note that over the past ten years, the average claim has increased by 75%, whilst the average premium has only increased by 50%. Increases in average claim size can be indicators of increased fraudulent activity. So, whilst the pet insurance market represents growth opportunities for insurers, it is clear that strategies and tools must be in place to ensure and maintain profitable growth.
Demand for pets in the UK has rocketed during the COVID19 lockdown and insurers are reporting a 78% increase in people registering new pets. The ability to swiftly and accurately assess risk and on-board new policyholders can be greatly enhanced by accessing and analysing pet insurance claims data via the centralised industry database CACHE Pet managed by CRIF.
The need for insurers to detect fraud is equally critical in order to offer affordable premiums and remain competitive whilst maintaining a strong loss ratio. Sherlock Detection from CRIF provides insurers with automated, advanced analytics to easily interpret available data, delivering faster, accurate decision making and a speedier claims service, improving the customer experience.
Offered by CRIF as a software as a service [SaaS] tool, it takes just three seconds to investigate a claim and identify any hidden fraudulent connections, providing insurers with a complete risk evaluation report and a fraud risk score. Combining artificial intelligence with proprietary machine learning techniques, and an insurance fraud analytics engine with more than 200 expert rules, CRIF developed Sherlock Detection to help pet insurers speed up and optimise claims management and detect fraud. Now is most definitely the time for forward thinking, ambitious pet insurers and new entrants to the market to take advantage of CACHE Pet and Sherlock Detection, to boost their performance and profitably grow market share.
