Pet insurance isn’t new, but it’s predicted to be the next growth segment for insurance carriers. However, in order to truly take advantage of this up-and-coming market, insurers must make a few necessary changes, including implementing new strategies that cater to today’s pet owners.
“The pandemic prompted many people to prioritize insurance to protect their families, furry companions included,” explained industry expert and Chief Digital Officer, Chris Blatchly of Cognizant. “Prior to the pandemic, today’s pet owners were already recognized for spending more time and money on their pets and even willing to make financial trade-offs to afford quality pet care. COVID-19 has further instilled the importance of pets as well as the great lengths owners will go to in order to protect these important family members.”
These pet owners, most of whom are millennials, have already disrupted retail, restaurants, banking, and healthcare sectors and now they’re having a similar impact on insurance. According to a recent whitepaper, this generation of owners have more pets than previous generations and spend substantially more money on their pets by purchasing organic foods, flavored medications, taking them on vacations, and even hosting pet parties. It was also noted in the whitepaper that millennials “lead the charge in tech adoption and expect quick service. Such factors highlight the demand for customer-centric services that include personalized nurturing communications and an interactive, immersive experience.”
Lemonade is one organization that’s leveraged immersive and interactive experiences to build new offerings tapping into this new market. In July 2020, they announced a new pet policy that included outpatient, specialty, and emergency care procedures for pets, in addition to covering more traditional needs such as hospitalization and surgery. Customers can also add on a wellness package that covers annual check-ups, heartworm tests, blood work, and access to a medical advice chat.
“Health insurance for pets dates back to over 100 years ago,” explained Lemonade CEO Daniel Schreiber. “It started with horses in the Netherlands, and the heir to that pet insurance is actually car insurance. Horses were a mode of transportation, and the insurance was meant to protect you if something happened to that mode of transportation. But pets are now members of the family.”
So how can insurers build successful offerings in the pet insurance market? Their success lies in the ability to embrace new strategies which includes aligning products and offers, distribution, underwriting, claims, and operations with the values and expectations of today’s customer landscape. More specifically, what they need is innovation in their product and business models, updates to their digital user experience, and overall core modernization.
Generational change and the pandemic have created a unique opportunity for insurers to successfully tap into this growing market. In order to capitalize on this opportunity traditional insurers must be ready to engage a new audience and meet them where they are, not only with innovative policies, but with the right tools to engage them.
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