Roundtable: Pet insurance: the state of the market in 2019

Posted on: March 1, 2019, by :
Pet roundtable 1

In February, Post held a roundtable, in association with Aquarium Software, to examine the state of the UK pet insurance market, touching on issues from consumer education and pricing, to how data and technology may revolutionise the market. Harry Curtis reports.

The discussion began with commentators focused on the ways in which insurers’ routes to market forpet insurance  have changed in recent years and are continuing to change.

Edward Shropshire, managing director of Aquarium, said: “You’re now more likely to be buying insurance on your mobile phone while you’re waiting at the checkout than to pick up the leaflet. That is a fundamental and dramatic change.

“We see a very high percentage of buyers going purely through the aggregator route. Anything else is almost inconsequential, from our side anyway.”

Steven Mendel, CEO and co-founder of Bought by Many, agreed that digital routes to market were becoming increasingly important.

“Online, search and social are our biggest channels. We are very focused on the channels that consumers are picking for themselves rather than the channels that we’re picking for them.

“We did some direct consumer TV marketing starting last year. We used Virgin and Sky and we could even see, down to a household level, who was buying. This idea of using digital for a new way of understanding consumer needs is a core part of what we do.”

There was some discussion of how whether aggregators might become as important a channel for pet insurance that they are already are for home and car insurance.

Mark Bowden, head of distribution at RSA, said: “Adoption among home and motor is clearly at a different scale versus pet. The question is how quickly do we think consumer behaviour will translate across the products versus the more traditional distribution channels for pet?”

Money Supermarket’s head of niche insurance channels, Rose Howarth, responded: “The fundamental difference for that is that most motor and home shoppers shop every year. With pet, as we all know, customers tend to stay with their insurer, whether that’s because they’ve had a claim or not.”

Gero Bertolone, marketing manager at Pet Protect, added: “The other fundamental difference with car or home insurance is it’s the same sort of product. If you go onto an aggregator site now and look for pet insurance, even if you look for lifetime products, there are different aspects within those lifetime offerings. You’re not truly comparing similar products.”

Andrew Pearce, CEO of Petcover, reasserted the value of traditional channels such as vets while recognising the value of direct channels as well: “Traditional channels will always pull in a lot of business because it’s got professional endorsement, it’s got all of the right characteristics around why somebody would buy.

“But your direct channel will grow in proportion and will continue to grow. If you don’t move into that space, as a traditional insurer, you’re going to be caught short by the other players around the table.”

A more speculative change to pet insurers’ routes to market was the idea of packaging it with other types of insurance. Backing up that suggestion, Ian Webber, customer experience manager at Perfect Pet, said: “People don’t really like dealing with insurance or having to buy products. They could do that once and cover everything.”

Salient among the delegates’ responses to the idea was the issue of affordability, with hesitance over whether consumers would be willing to make the larger
one-time outlay a combined home-and-pet policy would necessitate.

One of the traditional channels for pet insurance is naturally vets, but it would be wrong to think that vets won’t also play a part in the newer, more direct routes with which insurers are experimenting.

Pirit Powar, head of pet insurance at Direct Line, said: “While vets, themselves, might be less of a significant channel [than they once were], having that endorsement and recommendation, combined with a great retail consumer experience on direct is massively important. It’s important to integrate vet service with your direct product.”