Petplan revamps policy options SCRATCHING THE SURFACE OF THE PET HEALTH INSURANCE MARKET

Sep 15, 2016, 12:02pm EDT

John George, Senior Reporter

At the 10th anniversary of

launching their Newtown

Square-based pet insurance

company Petplan, Chris and

Natasha Ashton think they

have only scratched the

surface of their potential

market.

So, in an effort to reach new customers and to differentiate itself from the growing number of

competitors in the industry, the couple has embarked on a new strategy and created what they

believe to be the first fully customizable pet insurance plan.

Enlarge

“Less than 1 percent [of the people with pets] have pet

insurance,” Chris Ashton said. “In Europe, it’s something like

30 percent.”

While the company expects to top $100 million in revenues this

year, he believes that amount is “just a piddling in what

[revenues] could be and should be in the future.”

As veterinary care continues to advance and improve, Natasha

Ashton said, pet owners have many more options to help their

dogs and cats live longer and healthier lives. Those options,

which include everything from daily medicines to open-heart

surgery to stem cell therapy, can carry fees in the thousands and

even tens of thousands of dollars.

“People will pay for it by giving up other things like vacations

or dipping into college funds or wedding funds,” she said.

At the office: Chris and Natasha Ashton with their weimaraner Hermes

and Monty, their… more JOHN GEORGE

CLOSER LOOK

Year founded: 2006

Headquarters: Newtown

Square

Employees: 185

Policyholders: 170,000

2015 revenues: $89

million

Claims paid since

inception: $150 million

The Ashtons got the idea for their company after their cat got ill and quickly accumulated $5,000

in vet bills. “

Today, the North American Pet Insurance Industry Association estimates about 1.4 million pets

were insured in the United States and 200,000 were insured in Canada at the end of 2015, which

represents a 12 percent increase from the previous year. The association’s data also shows

premium revenues for the dozen companies, including Petplan, now writing pet insurance

policies climbed to $774 million in 2015 from $585.4 million in 2013.

The Ashtons decided to develop customizable pet insurance plans because people’s need for

coverage and their resources varied. A cat with a chronic illness will have care costs that far

exceed those of a young, healthy puppy.

The customizable plans feature a broader ranger of annual coverage limits’ starting at $5,000 and

going up to unlimited. They also have a wide choice of deductibles, including an option for a

single annual deductible.

The new plans also feature 24-hours-a-day, seven-days-a-week access to expert veterinary advice

the company’s recently formed partnership with Plymouth Meeting-based PetCoach, which has

developed an app that allows pet owners to connect with vets, trainers, nutritionists, and pet

experts.

Petplan is retaining all its existing plan features including full coverage for all injuries and

illnesses with no riders, paperless claims through the Petplan app, and a subscription to its in-

house magazine, fetch!.

The Ashton’s were developing their idea for customizable pet insurance plans when they were

confronted with one of their biggest challenges t date. Their underwriter, Allianz, wanted to take

the business in-house.

“They wanted to buy us,” Natasha Ashton said. “We didn’t want to sell the company.”

Natasha said a lot of the company’s nearly 200 employees would have lost their jobs, and many

policyholders could have lost their coverage depending on what changes Allianz made. That

created challenge of finding a new underwriter that would agree to continue covering pets with

pre-existing conditions, including expensive ones such as cancer. They eventually found a new

underwriter, XL Specialty Insurance Co., which has an office in Exton.

The company has received regulatory approvals for the customizable plan offering in 49 states

[Texas regulators are still reviewing the company’s application] and in Canada.

Chris Ashton said while the annual premium costs for its pet health insurance plans vary greatly

depending on the type of coverage a person wants, the average Petplan policyholder currently

pays $400 a year for coverawge that includes $15,000 worth of coverage and 10 percent co-

payments.

John George covers health care, biotech/pharmaceuticals and sports business.