pet insurance - developing a new branch of actuarial ... · 11/11/2014  · buster embraced since...

Pet insurance - Developing a New Branch of Actuarial Discipline November 11, 2014

Buster

Embraced since 2010

my background

intro to pet insurance

getting started

marketing

what we learned

2

Baxter

Embraced since 2009

topics

my background

3

genesis of embrace

4

pet

insurance

101

5 Buster

Embraced since 2010

category

6

LAW: P&C insurance

NATURE: L&H insurance

A unique hybrid

behind the scenes

7

how pet ins works

8

no networks

no coding

no electronic interface

no negotiated rates

9

Truman

Embraced since 2010

compared to human model

<1% of cats and dogs are

insured in the US

vs

25%+ in the UK

10

Gertrude

Embraced since 2009

reputation

11

getting

started

12

Truman

Embraced since 2010

prevailing product design

naïve approach to claims mgmt

large holes in coverage

3 prices – low, medium, high

13

Chloe & Lola

Embraced since 2008

pet parent survey

14

pet parent survey

15

personalizable model

16

uninsured population

referral hospitals

exposure

and more…

17

Truman

Embraced

since 2010

data

example: rate of claim

18

Age of Dog

Rate per

thousand

Future

Years

rate of claim adjusted

19

Age of Dog

Rate per

thousand

Future

Years

reimbursement percentage

prescription drugs

20

parameters:

product

annual deductible

Baxter

Embraced since 2009

annual maximum

wellness care

21

Gertrude

Embraced since 2009

parameters:

pet species

breed

age

sex

spay/neuter

multiple pets

location

employer

payment frequency

22

Griffin

Embraced

since 2011

parameters:

pet parent

payment type

what is covered

chronic condition

genetic conditions

accidents & illnesses, plus in-house drugs

23

wellness & Rx (optional)

dental trauma

what is not covered

cosmetic surgery

breeding

pre-existing conditions

24

experimental treatment

marketing

25

Lincoln

Embraced since 2010

veterinarians

26

animal welfare

27

online

28

word of mouth

29

partnerships

30

what we

learned

31

moral hazard & adverse selection

pre-existing conditions

claims management

32

Baxter

Embraced since 2009

discoveries

retention

33

Claim Measurement Paid Amount > $50 Pols issued thru 2009-03Wellness Policy In? Y TERM2

Wellness Claim In? N Loss Amt 338,723

MO25

Loss Amt MO24

in T1 Ret 24-25 100%

MO13 Ret 14-24 96% Stay 268

878,436 Stay 268

Pols issued thru 2010-03 Claim 278 Go 0

TERM1 41% Go 10

Loss Amt 1,680,661 Issued

MO13 679 Ret 24-25 98%

MO12 Ret 14-24 89% Stay 351

Ret 12-13 96% 59% Stay 358

Ret 1-12 95% Stay 1482 Nothing 401 Go 7

Stay 1,538 Go 43

Claim 1,622 Go 56

21% Go 84

Issued `

7,900 Ret 12-13 92% Loss Amt 251,281

Ret 1-12 76% Stay 4397 MO25

79% Stay 4802 MO24

Nothing 6,278 Go 405 Ret 24-25 98%

Go 1476 Ret 14-24 94% Stay 256

Stay 261

18% Claim 277 Go 5

drop in claims = $4,648.29 13% Go 16

over 185 policies Issued

= $25.13 per shifted policies 2078 Ret 24-25 92%

= $0.45 per pet Ret 14-24 84% Stay 1400

87% Stay 1517

Nothing 1801 Go 117

Go 284

in summary

1 subtle and risky

2 challenging but rewarding

3 unlimited potential

34

questions?

35

Buster

Embraced since 2010

Laura Bennett, FSA CFA

lb@embracepetinsurance.com

linkedin: linkedin.com/in/laurabennett

twitter: @laurabennett

facebook: facebook.com/laurajvbennett

36

contact info Baxter

Embraced since 2009