pet insurance - developing a new branch of actuarial ... · 11/11/2014 · buster embraced since...
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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
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Truman
Embraced since 2010
compared to human model
<1% of cats and dogs are
insured in the US
vs
25%+ in the UK
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Gertrude
Embraced since 2009
getting
started
12
Truman
Embraced since 2010
prevailing product design
naïve approach to claims mgmt
large holes in coverage
3 prices – low, medium, high
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Chloe & Lola
Embraced since 2008
pet parent survey
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pet parent survey
15
personalizable model
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uninsured population
referral hospitals
exposure
and more…
17
Truman
Embraced
since 2010
data
example: rate of claim
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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
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Griffin
Embraced
since 2011
parameters:
pet parent
payment type
what is covered
chronic condition
genetic conditions
accidents & illnesses, plus in-house drugs
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wellness & Rx (optional)
dental trauma
what is not covered
cosmetic surgery
breeding
pre-existing conditions
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experimental treatment
marketing
25
Lincoln
Embraced since 2010
veterinarians
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animal welfare
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word of mouth
29
partnerships
30
what we
learned
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moral hazard & adverse selection
pre-existing conditions
claims management
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Baxter
Embraced since 2009
discoveries
retention
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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
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questions?
35
Buster
Embraced since 2010
Laura Bennett, FSA CFA
linkedin: linkedin.com/in/laurabennett
twitter: @laurabennett
facebook: facebook.com/laurajvbennett
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contact info Baxter
Embraced since 2009