The time has come for Pet insurance and online pet brands to merge and expand into one of the most lucrative opportunities of today!
The pet industry landscape is growing at an unprecedented pace, the global market size valuation stands at over $190.1 billion in 2018 and is expected to grow to $269 billion by 2025 as stated by Global Market Insights and Statista.
Pet ownership is on the rise across the world and pets are playing an ever more important role in our lives, with more money being spent on pet health, food and accessories than ever before.
However, while the uptake of pet insurance is growing, there are still
43% of dogs uninsured in the UK while in the US only 1% of households have pet insurance in 2018.
This represents a huge gap in the market for pet insurance uptake so a strategic digital-affinity solution is the answer to helping brands capitalise and where insurers leverage the distribution power to sell more policies. The cause is simple: As a nation of pet lovers, we treat our pets like equal family members and would do anything to keep them healthy, protected and living longer.
The opportunity therefore, is to first reach the pet population and I don't mean in the traditional sense; selling pet insurance on comparison sites, through brokers or as a result of direct online marketing. The real question is where are all the pet owners spending their time, who are they and how can you convert them into responsible pet insurance policyholders?
Millennials are the #1 Pet-owning generation
It is millennials who have surpassed the largest pet owning demographics! Pet brands and insurers who will win the future of the industry must understand how millennials differ from the other generations. This generation makes 54% of their purchases online, 61% find it easier to chat via digital communication channels on mobile and according to Wakefield Research, 69% are likely to use technology to keep track of their pets.
Covid- 19 has proven this also applies beyond demographics and intensified the power of telemedicine as a game changer in veterinary care. Insurers like Covéa acted fast to adapt to the pandemic and partnered with FirstVet.com to champion the experience of supporting their customers in times of need, remotely.
Retail apps such as Chewy that make it convenient to shop anywhere, any time, have good value due to free shipping, attracts $3.5 million in annual sales (the lion-share in the US online pet food market). And for pet services, Rover has won customers for the most trusted pet sitting and dog walking app, accessible and easy to book.
Mobile apps are allowing owners to monitor pet health habits, nutritional intake, and playtime. Built-in calendars alert owners to routine care provided by pet care services companies. More millennials and others are embracing the latest innovations in technology related to caring for their pets, including pet trackers, cameras, smart feeders than ever before.
Digital Pet insurance and the Affinity Opportunity
Understanding the various distribution channels and supporting this with actual sales figures is important to understand where the true value and reach power occurs for affinity brands.
Above is an illustration from CommonThread Company and data extracted from Statistic showing that pet food was estimated to be the largest product segment due to growing demand for premium food products and natural & organic products.
In 2019, $95.7 billion was spent on pets in the U.S as represented in American Pet Products Association and breakdown is as follows:
> Pet Food & Treats $36.9 billion
> Supplies, Live Animals & OTC Medicine $19.2 billion
> Vet Care & Product Sales $29.3 billion
> Other Services* $10.3 billion
Interestingly out of all expenditures, Pet services* such as grooming, boarding, training, has been the fastest-growing product segment and one where innovative technology powers that solution. Presented here is an opportunity for brands to enhance their ecosystems by selling insurance in context across each of the above segments- a product that is so commonly overlooked in the online pet industry. Take the UK market for example, six of the major high street retailers now sell their own co-branded pet insurance. Leveraging on brand loyalty Tesco pet insurance uses reward loyalty programmes to encourage cross selling within their ecosystem while being underwritten by RSA. Customers are more likely to buy insurance from a brand they know than from an ad they see.
At Habit we understand the compelling competitive advantage brands have over traditional insurance distribution channels as well as the limitations of insurers. Using our digital affinity-based insurance technology an insurance product can either be embedded natively into existing channels, or using a white label solution for quick deployment with no journey or checkout interruption.
Habit will work with digital brands to;
Identify the ideal insurance product fit for their audience
Define the digital journey with the brand and insurer
Power the technology to embed insurance natively within the brand ecosystem
Provide visibility and data analytics on traffic and policyholders
Leverage on IoT connectivity solutions for real-time personalised quotations and communication
Contact us at habit.io/contactus to see how your digital channel can achieve a new revenue stream and better engagement rates for the digital-native generation? As a (re)insurer, do you feel the urge to innovate and leverage digital channels to reach more customers? Reach out to us and we can connect your insurance with some of the largest online pet brands. Come and talk to us about our affinity insurance,
- The Habit team