Brokers, what would you say to a potential multi-billion dollar market that has only a 2 per cent penetration rate? It exists, and the clients are already in your book.
Pet insurance. It has been around in Great Britain since the 1940s, and in Sweden it enjoys a 40 per cent market penetration, having got its start back in 1900. But here in Canada, it only got its start when the mullet was still fashionable.
“Pet insurance got its start in 1989 when the first company launched, but it wasn’t until the early 2000s that it began to gain real traction and other entries into the market,” says Randy Valpy, vice president and managing director of pet insurance,
RSA Canada / Pets Plus Us. “Today there are about five companies and 12 brands of insurance in Canada, so there is a lot more marketing going on, which helps to build awareness. That is the largest hurdle facing the industry – that many people haven’t heard of pet insurance and they don’t know how it works.”
The market has tremendous potential, Valpy told
Insurance Business, as there are about 14 million cats and dogs in Canada, and just about under 2 per cent penetration rates in the market for dogs and cats.
“But the upside is we look at the U.K., and European markets, and there is about a 25 per cent penetration in Britain, and in Sweden over 40 per cent penetration,” says Valpy. “As a continent here, we think we can get to those numbers. We’re not there yet; but they’ve been doing it a lot longer in Europe.”
Valpy has quite a pedigree in pet insurance, and in the industry in general. He was responsible for developing and fulfilling RSA Canada’s pet-insurance strategy, and before starting Pets Plus Us, was President and CEO of Western Financial Insurance Company.
During his 10 plus years with WFIC, the company grew by more than 530 per cent.
At WFIC, Valpy led the rebranding of Petplan to Petsecure Pet Health Insurance. He also developed key business partnerships with the Canadian Automobile Association, the Canadian Kennel Club, HBC, Nestlé Purina PetCare, President’s Choice Financial, Procter & Gamble and Walmart (where he helped create their first in-store pet-insurance offering in partnership with Iams).
In 2004, this program rolled out to more than 200 Canadian Walmart stores.
For Valpy, the satisfaction and rewards of selling pet insurance go far beyond the monetary. (continued.)
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“People send me cards and letters, telling me there are pets that are alive today because of the insurance – and they thank me for it,” says Valpy. “All too often it is considered to be a part of the homeowner package – but it is a very emotional issue. Many people don’t have $5,000 lying around to pay for a vet bill, and it can be a tough decision to euthanize a pet for that reason.”
For example, if a puppy swallows a small toy, it could cost $1,300 on average to have it removed at an emergency clinic or a veterinarian's office, according to a 2014 survey by the pet insurer PetFirst.
For a cat with a bout of pneumonia, the average vet bill can be in the range of $1,000.
A founding and respected member of the North American Pet Health Insurance Association (NAPHIA), Valpy also sits on the board of the Canadian Federation of Humane Societies (CFHS).
The shift in attitudes from pets being considered a possession as part of a homeowner’s policy to that of a dependent – more like that of a child – is being reflected in some company benefit packages.
“There are employee benefits that now include pet insurance,” says Valpy. “For many, a dog or cat is a valued family member – and now the industry is coming around to write policies that reflect these attitudes.”
Who is in pet insurance?
Embrace Pet insurance – operates in the U.S. only from their head office in Beachwood, Ohio
The Hartville Group – operates in the U.S. only from their head office in Canton, Ohio
Healthy Paws Pet Insurance – operates in the U.S. only from their head office in Bellevue, Wash.
Petfirst – operates in the U.S. only from their head office in Jeffersonville, Ind.
Pethealth – operates in the U.S., U.K. and Canada from their head office in Oakville, Ont.
PetPartners – operates in the U.S. only from their head office in Raleigh, N.C.
Petplan USA – operates in the U.S. and Canada from their offices in Newtown Square, Penn.
Pets Best – operates in the U.S. only with their head office in Boise, Idaho
Pets Plus Us – (Randy Valpy) operates in Canada only from the head office in Oakville, Ont.
Trupanion – operates in the U.S. and Canada from their offices in Seattle, Wash.
Veterinary Pet Insurance – operates in the U.S. only from their head office in Brea, Calif.
Western Financial Insurance Company – operates in Canada only from their head office in Winnipeg, Man.
“Some of these companies also sell and market white label brands, i.e. Western Financial Insurance Company markets their own brand Petsecure,” says Valpy, “but they also provide all the back end support for PC Insurance Pet Insurance, Hbc Pet Insurance among others.”
