The $1.5 billion-a-year U.S. pet health insurance market has a new player: Zoetis Inc., the world’s largest manufacturer of animal drugs and vaccines.
Zoetis’ insurance subsidiary, Pumpkin, is competing against more than a dozen providers, from industry leader Nationwide to upstarts Spot and Prudent Pet.
One feature that sets Pumpkin apart is Preventive Essentials, a policy add-on that covers an annual wellness exam for an enrolled dog or cat, one or two vaccines, and a monthly flea, tick and heartworm preventive — either Simparica Trio or Revolution Plus — that is mailed from Zoetis to a client’s home twice a year. (More information is available at www.pumpkin.care.)
Today’s Veterinary Business spoke with Alexandre Douzet, MS, MBA, the CEO of Pumpkin Insurance Services Inc., and Pumpkin sales director Beth Wymer, AIC, MS.
Why is Zoetis getting into pet health insurance?
Douzet: Zoetis saw a general trend in the market. Over the past five years, the average cost of veterinary services has been going up at a rate of about 6% per annum, which is about three times the increase compared to the standard inflation in the U.S. Insurance enables people to practice best medicine while keeping the cost affordable. [About 2% of U.S. pets are insured], so when we looked at this, it was like, “What can we do to change that?”
What does pet health insurance do for veterinarians?
Douzet: Pets who have insurance tend to visit their veterinarians 50% more per annum than the pets who do not have insurance, and clients who have insurance tend to spend more as well. For instance, if a cat is insured, you will see an 89% increase in spending per year, and if it’s a dog, the increase is 29% higher. So for those reasons, Zoetis created this new insurance called Pumpkin because we wanted to create immediate value for veterinarians and pet owners.
Why the name Pumpkin?
Douzet: We picked Pumpkin for the main reason that people are not just pet owners, they are pet parents. And when you’re a parent, you tend to have a nickname for your pet or your children. Pumpkin is one of the most popular nicknames that people give to their dogs or cats. We want to tap into the emotional bond between a pet and the parents.
Pumpkin Preventive Essentials sends a Zoetis preventive — Simparica Trio or Revolution Plus — to the policyholder’s doorstep, bypassing the veterinarian. Practitioners won’t share in the prescription revenue. How do you respond?
Douzet: By shipping the parasiticides directly to people’s homes, we are able to increase compliance, which is something that veterinarians are really interested in. The data shows that when people try to remind themselves that they have to go back and buy a preventive, a lot of people don’t do it, or sometimes pet owners think that a tick and flea medicine or heartworm preventive is needed only during the summertime. We can ensure a full 12 months’ compliance. I think that’s a great benefit. Because Preventative Essentials also covers vaccines and wellness visits, that is a way for us to ensure that people go back and visit the veterinarian.
The pet insurance market has many insurance providers. Besides achieving a growing market share, do you have any other goals for Pumpkin?
Douzet: I’m going to look at it from the standpoint of the next 10 years. The goal here is to increase the rate of pet insurance nationwide from about 2% of pets to what we see happening in other nations. For instance, if you look at the United Kingdom, the rate of pet insurance is closer to 25 to 30%. By bringing a unique, differentiated service like Pumpkin, we can get pet owners to see the value in pet insurance. Maybe we can get to 20 to 30% over time.
Beyond Preventive Essentials, how else does Pumpkin differentiate itself from the other insurance companies?
Wymer: It’s a very simple, smart plan. We researched the cost of veterinary care, even catastrophic events, and learned that over 99% of all costs are under $10,000 per dog and under $7,000 per cat. So, we made a lot of big decisions for the pet owner. We do 90% coinsurance coverage, which is the best insurance coverage you can get, because we really want pet owners to feel the relief of having Pumpkin when they’re at the veterinary hospital. We also cover a lot of things that other companies might not [such as stem cell therapy, cancer treatments and behavioral issues]. Exam fees is another one we cover that many others exclude. Our No. 1 goal is to drive pet owners back into the veterinary hospital.
Pumpkin’s coverage is so broad. How does the price point compare with other companies’ policies?
Wymer: We’re not going to be the least expensive, nor are we going to be the most expensive. But when you really look beyond the price, when you look at our coverage, if someone is truly looking for the best coverage for their pet, I think they’re going to like our plan when they look at all the items, conditions and symptoms that we cover.
Pumpkin is available to pet owners in about 30 states as of late April. Will policies be sold nationwide at some point?
Douzet: Yes. It’s important to note that from a regulatory and compliance standpoint, because of our unique model and the fact that we have direct consumer shipment of the parasiticide medicines, we are both an insurance company and an insurance agency as well as an online pharmacy. So, we have to be complying and registered in every state. We are still waiting to be licensed in some states for the pharmacy, but we are in the majority of states.
Why launch Pumpkin now given that so many pet owners are staying home in the middle of the COVID-19 pandemic?
Douzet: For two reasons. No. 1 is we saw a pretty significant increase in pet adoptions, mainly through shelters, and these pets are going to need medicines and vaccines. So, with our direct-to-consumer model, we thought the timing was right. The other thing is that the pandemic is putting a pretty sizable hardship on veterinary practices, so we launched a relief campaign, a fundraiser, that we call ArkMeowForVets. We are engaging pet owners to support their veterinarians by posting a picture of their pets with a thank-you message to their veterinarians. For every post that is taking place on social media, Pumpkin will donate $5 to the veterinarian mentioned in the post, up to $5,000 per clinic and up to $50,000 through the campaign. (Learn more at bit.ly/2KLLR7C.) We were thinking about launching around this timeframe and pushed forward for those reasons.
Did you know a subscription to Today’s Veterinary Business is free to qualified veterinary professionals? All you have to do is sign up here (and renew each year). You also can sign up to receive the Today’s Veterinary Business weekly e-newsletter.