Supermarkets and retailers continue to influence the pet insurance market. Insurers should consider partnering with these players in order to expand and improve the distribution of pet cover.
Allianz-owned pet insurer Petplan has announced a new partnership with pet supplies retailer Pets at Home, in a move to extend the insurer’s distribution network and for Pets at Home to strengthen its insurance proposition for customers. This comes at a time when supermarket chains and retailers with a vested interest in the pet product market are becoming the main point of call for consumers in search of pet cover.
With Pets at Home recommending Petplan insurance to its customers, the new partnership will see two of the UK’s largest providers of pet-associated products team up. The added benefits for customers include a 5% online discount and free Pets at Home gift vouchers to be redeemed against products for dogs, cats, and rabbits.
According to our 2016 General Insurance Consumer Survey, the retail/affinity channel is now the second most popular route to market behind direct offerings for dog and cat insurance. 20.7% of consumers obtain dog insurance through a retailer/affinity group, while 20.3% purchase cat cover via this channel. This suggests pet customers are favoring alternative platforms as opposed to the more traditional solutions.
Much of this could be attributed to a marketing push from retailers, or due in part to their ability to constantly remind their customer base of their pet insurance products by promoting instore. Supermarkets and retailers are also present on aggregator platforms, and with pet insurance customers being particularly price-sensitive and inclined to shop around for better or cheaper deals, we’re likely to see growth in the number of consumers flocking to this channel over the coming years. This is especially as premiums in the pet space can be expensive.
The new deal will also see Pets at Home customers, who may already have a policy with another provider, invited to renew their policy onto a new product underwritten by Allianz. The insurer estimates that in 2017 the partnership will deliver an additional £21m in GWP across both migrated and new customers, thus increasing Petplan’s access to potential customers.
Entering the retail sector enhances the ability of insurers to grow their market share. Partnerships with a market-leading brand such as Pets at Home benefit the pet insurance space in particular, with a very small group of retailers dominating the market. Insurers must take note and look to identify partnership opportunities in other product markets where retailers and affinity groups also have a significant presence, such as the travel insurance space.
By Thomas McCourtie, UK General Insurance Analyst