Oslo Pet insurance - Insurer Innovation Award 2024

Editor's Notes

• #4 As well as driving up profitability and risk quality, managing the rating process through a dynamic central pricing and rating engine streamlines workflows and drives efficiencies in the underwriting process, meaning more resources can be allocated to growing the business and developing the kind of personalized digital experiences and value-add wraparound services that appeal to today’s custo mers.     For pet insurers, a major opportunity lies in modernising their approach to pricing and rating. Despite increased regulatory scrutiny, pet underwriters still have relative freedom in how they choose to segment risks and price, yet most employ rating tools that sit on Excel spreadsheets and only consider a handful of basic variables such as pet breed, age and country.   This means they do not gather enough data to differentiate between a good risk and a bad risk, and often end up on the hook for claims they shouldn’t be paying. Bringing more granular data into rating algorithms – from local weather or crime data to nearby pet walking facilities or customer credit scores, for example – and intelligently analysing it is essential to properly assess risks, generate accurate prices and improve combined ratios.  
• #6 According to Allied Market Research, the global pet insurance market was valued at $4.5bn in 2020 and is projected to reach $16.8bn by 2030 at a CAGR of 14.3%. In the US, gross premiums rose over 30% year-on-year in 2021 to $2.8bn, according to the North American Pet Health Insurance Association (NAPHIA) and have risen 24.2% annually on average over the last five years.   With many pets uninsured, there is huge scope for further growth. According to 2021 data from the National Association of Insurance Commissioners (NAIC), roughly 68% of US households owned a pet but only 2% had pet insurance. In many other markets, pet insurance is barely adopted at all. However, awareness of the value of pet insurance is increasing as the cost of treatment and medical bills have soared in the past decade – a trend being accelerated by global inflation.     Pet ownership is also on the rise (up 28% in the US in 2021, according to NAPHIA) and this trend is expected to continue. So too is the growth and viability of the pet insurance market in the US, that the NAIC passed the new Pet Insurance Model Act in August 2022 to establish appropriate consumer protection regulations for the industry.