The pet insurance market is envious of people, aware of its potential and of the under-equipment of French households. Chris Blatchly, chief digital officer & insurance consulting leader at Cognizant, underlines in this tribune the fundamental points that they must keep in mind to get into this promising niche.
In the age of Covid-19, pets have become essential to help us overcome the protracted health crisis. This is one of the main reasons why pet insurance is seen as the next growth segment for personal insurance companies, as the global market is expected to exceed $ 10 billion by 2025 and experience annual growth of 6.7%.
With the market moving at a breakneck pace, there are certain trends and fundamental themes that insurers should keep in mind when looking to keep up with changing market conditions and changing consumer habits.
Customer dynamics and disposition
Millennial customers own more pets and spend more on their animals than any older generation, providing organic food, buying medicine, hiring services, throwing pet parties, and even taking them on trips. vacation.
They are also the first to adopt new technologies. As they grew up in a digital world, they expect faster and more efficient service from insurance companies than ever before.
The pet technology market
Pet Tech is a response to growing concerns for the health and safety of pets. The pet technology market includes, among others, activity monitors, GPS trackers, RFID sensors as well as accelerometers.
The possibilities offered by pet technologies are vast. These types of devices help support a data-driven approach to the insurance underwriting and claims settlement processes.
Innovation in insurance: seven key themes for the next generation of pet insurer
Digital businesses focus on improving the customer experience. In the field of pet insurance, they mainly focus on three areas: direct distribution to customers, digital claims processes and finding new solutions.
However, the increase in the number of pet owners and the growing use of pet tech items will be major decision-making factors going forward, and lead to seven key themes that insurers will need to keep in mind. spirit:
- Modify the nature and terms of pet insurance
Some consumers might view pet insurance as expensive and unnecessary. Insurers must therefore create compelling and innovative product offerings, complemented by a personalized omnichannel experience. For example, additional charges or discounts should be calculated based on the animal’s lifestyle, and measured by wearable sensors or other monitoring devices. With such models, insurers can offer more suitable prices.
- Look beyond traditional insurance
A digital approach to product innovation can lead to new business models, such as Peer-to-Peer (P2P) insurance. P2P insurance harnesses the power of social media to reimagine the concept of insurance. Social media makes it easier for like-minded people to find each other and share the costs of pet insurance.
- Changing the way products come to market
It is inevitable that pet owners will turn to the D2C (direct to consumer) model. The recent success of pet care comparison sites like Chewy or PetSmart is an early indicator of this emerging trend. Insurers should seek to collaborate with other members of the pet care ecosystem: retailers, veterinarians, employers, animal shelters, breeders, etc. By partnering with them, insurers can better establish the real value of pet insurance and get more revenue and market penetration than if they acted alone.
- Transition from customer satisfaction to customer pleasure
With the increase in the number of millennial customers, pet insurers are being pushed to differentiate themselves through an improved customer experience. Insurers need to simplify and digitize customer journeys through digital channels, and offer customers a selection of value-added services that go beyond simple insurance. This involves identifying the key stakeholders and understanding what is important to them when purchasing their pet insurance in order to personalize their insurance offerings.
- Get rid of habits
Insurers need to re-imagine and modernize their core processes to promote flexibility, agility, innovation and speed to market. The « heart » of this effort should revolve around business capabilities such as flexible product configuration and automated quote generation, as this will ensure alignment with business results.
- Harness the power of data
Pet insurance companies can accelerate their digital transformation with artificial intelligence (AI). For example, Intelligent Process Automation (API) will allow direct issuance of low value / risk insurance policies and direct processing of low value claims.
- From compensation to loss prevention
Finally, loss prevention services are another potentially important differentiator for pet insurers. The two main concerns of pet owners are the health and safety of their pets. One of the ways for pet insurers to constantly communicate with their customers and better promote safety is by device or sensor alert. This will help insurers of pets get important information. They can continuously monitor these data feeds and provide contextual recommendations to the pet owner to help improve their pet’s health.
The market leaders of tomorrow
The pet insurance market is rich in untapped opportunities as evidenced by changing customer base, the advent of pet technology and the entry of players in the insurance industry. Insurance companies that take advantage of these developments to innovate with new products will be the market leaders of tomorrow. It is essential to design a profitable and digital model, as insurers re-imagine the future of pet insurance.