The biggest problem with pet insurance in North America today is that it is insurance—and people don’t like insurance, participants at the North American Pet Health Insurance Summit concluded.
The summit, planned as an annual event, was held in Sun Valley, Idaho, in early September.
Key goals were to increase the number of pet owners buying pet insurance policies and making efforts to improve customer satisfaction with pet insurance in general.
Four pet-insurance providers, out of 11 invited, attended the summit and agreed to form the North American Pet Insurance Assn. as a non-profit organization to bolster the awareness and quality of pet insurance.
“If our focus is better care for pets, we will all benefit,” said participant John Kramer, principal of American Pet Insurance Co. and a founding member of the group.
One concern is that substandard players will create dissatisfaction in pet insurance, hindering industry-wide efforts to boost acceptance among both pet owners and veterinarians. Thus, establishing or re-earning trust from veterinarians and pet owners alike is one of the group’s goals.
Or, as summit organizer Jack Stephens, DVM, of Pets Best Insurance said, the goal is to “fix the image of slow pay, no pay.”
The group sees distinguishing pet insurance from human health insurance as important for its acceptance by pet owners and veterinarians.
The group’s initial vision statement reads, “The vision of the North American Pet Insurance Assn. is to foster successful business and increase pet health through providing pet insurance.”
Goals include fostering and enhancing “the positive image of pet insurance to consumers and our stakeholders;” developing and adopting ethical standards; mentoring and supporting new companies; creating criteria for insurance providers to be certified by the association; creating general talking points and white papers for the media; speaking with one voice for the benefit of all pet insurance providers that meet the group’s standards; working together to recruit additional pet insurance companies as members; and providing continuing education for members and industry.
The founding members also agreed to pool actuarial data and some non-proprietary business statistics, such as numbers of pets insured, so that the group could serve as a national clearinghouse of pet insurance data.
The group did not address regulatory concerns, but is likely to in future meetings.
The group has taken steps to secure a Web site and plans to recruit professional management and public relation firms not affiliated with existing insurance companies.
The group postponed discussions on two proposed goals: to “endorse business operating standards that achieve a sustainable pet insurance industry” and to “provide a method for consumers and our industry to voice concerns or complaints about pet insurance providers.”
Founding members of the association, all of whom attended the summit, include John Kramer; Greg McDonald, chairman and chief executive officer of Pets Best Insurance; Darryl Rawlings, CEO of American Pet Insurance Co.; Dennis Rushovich, CEO of Hartville Group Inc. (ASPCA/PetsHealth Care Plan); Dr. Stephens; and Randy Valpy, president and chief operating officer of SecuriCan General Insurance Co. (PetPlan Canada).
At least two other insurance providers are expected to join, including Embrace Pet Insurance, which didn’t attend the meeting due to logistical problems. With two more member companies, the organization would involve a majority of North American pet insurance providers, although not market share, and have that much more credibility.
Market leader Veterinary Pet Insurance declined to participate in the event, which was convened by VPI founder Stephens, who has since founded rival Pets Best.
VPI, the dominant provider of pet insurance in the United States, opted to take a wait-and-see approach to the summit—in part because recent global pet insurance meetings have been relatively ineffective and in part because, as market leader, it had relatively less to gain and more to lose than its smaller competitors.
The insurers who attended remain hopeful that VPI and other insurers will join them, and that working together they can increase the number of insured pets from today’s 1 percent to 3 percent of pets rather than compete for share in that relatively small market.
The group will also establish a non-insurance provider membership category for other businesses. It may also create an advisory board with practitioner and pet owner representation.
During the summit, executive roundtables were moderated by meeting facilitator Gerald Faust, Ph.D., and insurance executives heard presentations from Ron Brakke of Brakke Consulting; Patricia Olson, DVM, Ph.D., president and CEO of the Morris Animal Foundation; Peter Weinstein, DVM, MBA, of P.A.W. Consulting; John Albers, DVM, executive director of the American Animal Hospital Assn.; consultant Thomas Catanzaro, DVM; and Steve Strand of the Pet Cancer Foundation.
Speakers addressed issues of pet insurance within the profession, current programs that could benefit from support from pet insurance providers and the benefits of cooperation within an industry. For example, Strand provided a history of how difficult it was for various service-dog organizations to work efficiently together and the repercussions of that challenge.
One conclusion was that pet insurance providers should not expect veterinarians to sell their policies, although veterinary practices could do more to boost awareness of the existence of pet insurance.
Dr. Catanzaro, for one, said the pet insurance market is not consumer-driven yet and that practices could ask price shoppers whether they have insurance or not (since that would effectively change their price). Similarly, he said, practices could ask about insurance when asking clients how they planned to pay for services (cash or credit), in part because the clients would need certain medical records to file their claims.
In his presentation, Dr. Albers outlined AAHA’s traditionally neutral position toward pet insurance, noting that the group’s members remained divided on the topic.
Some support insurance as a way to boost revenues, some support it as a way to provide optimal care to ailing animals and others were passionately against it, he said.
On the other hand, the organization is increasingly viewing pet insurance as one way for pet owners to exhibit financial responsibility for their animals.
Other attendees included Mary Beth Leininger, DVM, of Hill’s Pet Nutrition, a sponsor of the event along with MWI Veterinary Supply and Pets Best; AAHA President Thomas Carpenter, DVM; and Ted Trimmer, DVM, and Gary Holfinger, DVM, both trustees for the American Veterinary Medical Assn.’s Group Health and Life Insurance Trust.
To avoid any apparent conflict of interest, Drs. Albers, Carpenter, Holfinger and Trimmer left the meeting once the insurance providers decided to form an organization.
All attendees participated in discussions addressing questions such as what consumers want from pet insurance, what veterinarians want from pet insurance, and what each group currently likes or dislikes about pet insurance.
An underlying theme was that pet insurance could benefit pets, pet owners, veterinarians and the insurance providers financially and otherwise.
For example, Olson said 40 million pet cats, not including feral cats, received no veterinary care at all last year.
Moreover, she said, there is not a connection between the human-animal bond and income levels. In fact, key attachment indicators, which signify a desire to obtain optimal veterinary care if possible, include people who live alone, have recently undergone a life change such as divorce, live in households without children and who are with their animals all day, every day.
For example, actuarial data from insurance companies could provide valuable information about disease prevalence and appropriate treatment and preventive measures. This would address a general lack of evidence-based medicine and information on best practices in the veterinary profession, Olson said.
Olson noted actuarial data could be extremely valuable to organizations such as Morris Animal Foundation in helping allocate research funds.
In her presentation on the ethics of providing the best veterinary care, Olson noted that higher veterinary prices are leading to a two-tiered system of the haves and have-nots. (A trend, incidentally, supported by a recent Packaged Facts report that showed more than half of all veterinary expenditures were made by relatively affluent households earning at least $70,000 a year.)
She also said that higher prices may reduce both services provided and profits for veterinarians. Banfield, she noted, has benefited financially from lowering the price of its cat wellness program.
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