Wednesday, November 19, 2014

Should pet insurers be able to track pets?

Sleeping ferret.
There are a few medical insurance companies in Australia that offer a free pedometer or activity logger and a cheaper premium on the condition that the insured performs a certain amount of physical activity daily.

It seems that pet insurers are going in the same direction. I received a media release about a UK company that offers a GPS activity tracker (below).

The news that a British pet insurance provider will begin using GPS dog collars to track a pet’s activity may be the first sign that the industry is really beginning to move with the times, according to insurance technologist Aquarium Software. The device, adopted by More Than insurance, which is similar to those used by car insurance companies to track dangerous driving patterns, is aimed at ensuring a healthier – and hopefully vet free – lifestyle for your animal.
Manchester and US-based Aquarium believe that the new tracking device will bring the industry more in line with other insurance markets and make it more profitable for insurers. The average vets’ bill currently costs around £300¹ and with that figure rising with the advent of more advanced veterinary treatment, the micro chipped dog collar will encourage owners to take better care of their pets.
“This is the first sign that insurers are really seeing the benefits technology can bring and by rolling out a GPS device like this, they’re creating a bigger data arsenal from which to better assess each individual insurance quote,” explained Mark Colonnese, Sales and Marketing Director for Aquarium Software. “The bottom line is that for the first time in the pet market, each insurance case can be individually evaluated, based on an individual pet’s analytics, something that was not previously possible.”
The technology, which is deployed in the form of microchip syncs up with a pet owner’s smartphone or tablet, before being passed down the line to the insurer where they measure a pet’s activity against recommended healthy guidelines. The healthy activity rate is calculated based on age and breed of dog, but Aquarium believe that now the technology is in place, there is no limit to its future use.
Pets that are exercised within the healthy recommended amount will qualify for cheaper insurance premiums discounted up to 20% as well as other benefits including healthy dog treats, free vaccinations and tablets and food, which also ensure a healthier lifestyle for your animal. The device also defends itself against wrongful use by dis-counting any activity over a natural speed for a dog, for example car travel.                        

“This technology is creating data all the time and as it progresses patterns will appear in other aspects of a dog’s existence that may be able to further accurately process each individual case down the line,” said Colonnese. “We may notice certain hotspots of healthy pets or be able to notice harmful trends based on location or time of activity when correlating the information back with claims databases and vets records.  What is really exciting is what else can be done with this type of technology and data, we know from experience this development is just scratching the surface and our R&D team are currently working on some very exciting proof of concepts”
Aquarium has provided bespoke technology for the insurance industry for years, but recently the integration innovators have shifted their focus to the pet market in an attempt to make it both more profitable to insurers and valuable to pet owners. “Naturally this advancement is something that we consider exciting for a market that was previously struggling to keep tabs on rising vets fees, claims leakage and insurance fraud,” added Colonnese.
“This device puts the ball back in the customer’s park, with them now having more control over what they pay an idea that’s not been available for pet insurance previously. Safer drivers pay less car insurance, securer homes receive better contents insurance quotes; so why don’t healthier pets receive better premiums? Well now they can. Bring it on!”

It’s an interesting development. The company states that the technology will allow them to reward owners whose dogs perform the prescribed minimum activity levels, help locate lost or stolen animals. But is that all they will do with the data?

Yes, veterinary bills can be expensive. But how many of these bills are related to an animal’s general level of daily activity? I’d argue very few. For example, the top reasons for insurance claims in Australia, at least in 2011, were dermatitis, otitis externa (ear infection), arthritis (may be related to lack of activity, but can be related to over-activity, eg athletic dogs), gastroenteritis, cancer, pneumonia, snake bite, diabetes (may be exacerbated by lack of activity), cataracts (often associated with diabetes but not always) and multiple fractures (source here).

So how does it benefit insurance companies? Well, it may reduce insurance fraud and reading between the lines, this has to be where insurance companies save money. Additionally, information might be sold to third parties who have an interest in knowing where the dog owners in your area are hanging out (for example where to locate a new vet clinic or pet shop). Maybe that isn’t a bad thing. Targeted marketing is surely less offensive than being bombarded with a bunch of irrelevant information and resources.

What about the activity levels…these can vary significantly between animals. Is it reasonable to assume, for example, that every German shepherd at every life stage should be walked for two hours per day (as in this example).

And a GPS tracker is a whole different kettle of fish to a pedometer. Is this a slippery slope? How much personal information do we want to provide to insurance companies?

On the human health insurance front the concept of genetic testing of policy holders has been raised…what about tracking and micro chipping people to ensure they’re as healthy as they say they are?

And what are insurance companies planning for cats? A GPS activity tracker might not be the most sensible means of detecting fitness in this species.

What do you think about pet insurers tracking pets?