and Stephen, please welcome to the pet insurance God podcast, thank you very much for having us. At least you in colorado. I am. What's it like to work for? Pet plan remotely. Oh, it's fantastic with the way technology is today, I have the capability of doing everything that I would be able to from the office because I have my normal phone and I have my computer and I can talk and Skype and so it actually works out very well. It's really kind of interesting, at least said with technology, we've actually had situations where our office is, the building was physically closed but no policyholder or prospect would have ever guessed it. When the pope was in Philly last summer, I think that plan was closed. The building again was closed for two or three days because traffic was so bad. We were inside that zone, but the business was open. Just everyone working from their own location. Pretty incredible really that you can run a business like that 170 people and everything went off without a hitch. That's great that plans policies have remained pretty much the same since the company launched except for tweaking like raising the annual maximum and so forth. So why did you decide to revamp your policies at this time? Well, when pet plan launched 10 years ago we were all about innovation. That's really what pet plan brought to the North American market was innovation in terms of flexibility in our policies, expanded coverage is paying based on what the veterinary fees were. So it was all about innovation and now as we are approaching our 10 year anniversary, we felt the need to do that. Again, The pet insurance category continues to grow, veterinarians have a lot of treatment options at their disposal. Head owners are willing to make the investment in the absolute best care for their pets because they consider the members of their family just as they do their two legged family members. So we felt the need to take that next step to innovate in this market and create a product that gives our policyholders more options in the type of coverage that they have over the type of policy that they have and ensure that we were making pet insurance accessible to as many pet owners as we're interested in it. Pet plan was one of the first companies to really offer policyholders away to customize their policies as far as choosing, especially choosing a deductible and copay to allow them to get a premium that they could afford and still get comprehensive coverage. And with the new policies it looks like you've even expanded that and make it even more customizable. That's right. And for exactly the reasons that you said to make pet insurance accessible and affordable to more pet owners. We've created a policy that has a wider range of deductible options From $100 up to $2500 and created an option for policyholders to have an annual deductible option which is new in the pet planned policy and that's been a great feature that our policyholders are taking advantage of now, But also expanding the availability of the annual coverage. So you can have a policy with $2500 worth of coverage up to $25,000 and even an uncapped annual coverage options. And then of course a lot of flexibility and reimbursement. So for us, it's really all about creating something that's very customizable for the pet owner and for each individual pet. So virtually any pet owner and pet can have a policy that they can afford fits in their budget without having to make difficult decisions about the types of coverage that they received. The types of conditions that are covered. The types of options that they're veterinarian has to treat their pets. We want to make sure that we're not limiting their ability to get care and whatever care that the veterinarian recommends the decisions they're making and customizing their pet plan policies are really all about the features that dr affordability of the policy itself are the old policies still going to be available. The old policies will not be available going forward. So all the new business policies that were writing currently where where the new policy has been approved will be in the new policy features as our existing policyholders renew their policy. They will actually renew into the new policy types well, conditions that you previously paid claims for be covered in the when they convert over to the new policies? Absolutely, that was one of the big things that we wanted to make sure happened was we wanted to make sure that when we had enhanced our coverage that we still have the same comprehensive coverage for all of the existing policyholders. So anything that was previously eligible for coverage in a policyholders, old policy is still covered in the same comprehensive capacity. What if the pet owner is going from say a $14,000? Annual maximum to a 20 or 25,000 or even unlimited? Annual maximum. How will those old conditions be handled under that? The old conditions will still be eligible for coverage. So because they're getting grandfathered into a new policy they'll have those new limits available to them for those coverages. So you've already described some of the aspects of the new policy. What things did you change? I'm thinking specifically about your 20% copay when going to an emergency clinic or especially hospital. I think that was dropped in the new policies. Is that correct? That's correct. So whatever policy copay or reimbursement amount the policyholder has selected in their new policy will apply regardless of the veterinarian that they see whether it's a general practitioner, an emergency hospital or a specialist and that would apply in both the US and Canada they have freedom of choice of any of those veterinary professionals in North America. So there's not going to be any per incident deductibles in the new policies or do they still have the option to get an annual or per incident? They have the option. So if someone for purposes of customizing their policy they feel like they want to lower premium, they might choose the per condition deductible or if they prefer the annual deductible, they definitely have that option in a new policy. And that's one of the features that as we've rolled out the policy to the state that have approved already is a very welcome feature to our new policyholders. Have you seen so far people opting for the per incident still instead of the annual deductible, Some have a pretty decent rate. I would say two. But the idea of the annual deductible and then possibly a higher deductible amount has just become very attractive to policyholders, gives them a lot of flexibility and the way they customize their policy and they recognize that for pets that may have multiple conditions, the annual deductible just seems to make more sense to those folks. They have the flexibility to choose for condition deductible if that's what they prefer. So can you define what your per incident deductible means? Our per condition deductible, it's per condition for policy term. So every policy term, the deductible will be reapplied. But essentially per condition means that if your pet is seen for vomiting and then your pet is seen for a broken leg, there will be two separate deductible is applied And I think an important point to is that it's per condition not per incident or poor per visit. So if a dog were to have chronic ear infection that required multiple trips to the veterinarian, we don't apply the deductible on every visit, we apply it on that condition, chronic ear infection. Hope that policy turn okay if they have a chronic condition like diabetes and they met the deductible this year and in the next policy term next year of course there's going to be ongoing uh diagnostics and treatment. Do they have to pay that deductible again? Yes, they would have to be the deductible again. Okay. I noticed that a lot of the companies are now changing their policies to make a more customizable. Traditionally the highest deductible to spend about $1,000. And I noticed what stood out was as you mentioned earlier, your deductible goes all the way up to 2500. Why did you do that? We recognize that some people are really looking for relatively low cost policy that's really going to cover them and those truly catastrophic type conditions. So we created a policy that would give them that option and we have sold policies with that higher deductible. As you note, most of the maximum deductibles that we're seeing are in the $1000 range, but we do have some folks who just want that catastrophic coverage. Obviously a 25 $100 annual deductible is going to drive the premium considerably down. So they're thinking about what their insurance needs. Are their trading off a very low premium for that higher deductible? I was just going to say. I think it also makes sense and the circumstances where perhaps you have an older pet or you have adopted an older pet and you have a lot of pre existing conditions and you know, things aren't going to be covered, but you really just want it for that big item. Like steve was talking about that catastrophic coverage. I think it gives you that opportunity to still make sure that you have some coverage for your pet. That knowing that you're going to own a lot of your pets expenses. Do you have any idea what the most popular most commonly selected per incident deductible level is? You know, I don't have that on the top of my head. I know that the range is pretty tight in the 250 to $500 deductible range, regardless of whether it's an annual deductible or per incident deductible. I think the prince deductible excess fused to the lower end, they're closer to 50 to $200. But then we do have quite a group of people that are taking the $1000 deductible as well. You know, one of the things that I think is not talked about very much and I certainly recommend to pet owners to always read their policy, read every word even though it may be painful to recognize that each company has some requirements when a pet owner signs up for a policy. Uh specifically I'm talking about. When is the last time they visit a veterinarian or do they need to visit a veterinarian uh for this policy to take effect? Can you speak to that? Absolutely. We want to make sure that our pets are getting their proper vet care. We want to make sure that they're getting their annual examinations because catching something early is going to make it. So it's a lot easier to treat rather than having your cat come in with diabetic ketoacidosis. It's a lot easier when you first noticed that maybe your cat's going to the bathroom a little bit more often or drinking a little bit more water. Um Being able to regulate a pet that early on is a lot easier. So we really want to encourage that, make sure that people are taking care of their pets properly. So we do require that they have exams within 12 months prior to policy for our younger pets. And for older pets, we do want to make sure that they had a more current, more recent examination just to make sure that we know what's going on with that pets have a good understanding of their health at the time that they take a policy out and then we do require that they have an annual exam there after just to make sure that they're getting seen and if anything popping up that the insurance is alerted to what's going on with the pet. I'm gonna go down and just ask some specific questions about coverage. Is here, talk about your coverage for hereditary conditions. We provide coverage for all hereditary conditions. There is not a specific cap on any of those hereditary conditions. The only time we wouldn't be able to provide coverage is this clinical signs were present prior to the inception of policy or during the 15 day illness waiting period. Otherwise, all hereditary conditions are comparable. We do not exclude for any breed related conditions. What about congenital conditions? Those are all eligible for coverage as well, same as our hereditary conditions. As long as they're not showing clinical signs prior to our policy inception. Okay. You brought up something else, at least that I'd like to get you to talk about and that is the waiting period. I noticed that you know, you you have your 15 day waiting period, but the they're the policy also stipulates for certain conditions. There's a longer waiting period. Can you talk about that Two waiting periods? We have a five day accident waiting period, a 15 day illness waiting period and then for our cruciatus and um soft tissue disorders of the stifles or the knees and then um Patel relaxations. We do have an exclusionary period. We have a six-month exclusionary period for all of those conditions. But if the pet has never shown any issues with the needs prior to policy, they can have an exam within the 1st 30 days and as long as the knees are normal and there weren't any pre existing clinical signs to the policy, that exclusionary period can be waived. What about your coverage for chronic conditions? We do provide coverage for chronic conditions. So if a pet, it falls ill with a chronic condition during policy is covered and it's covered for the like the pet. So every time the policy renews, they still have coverage for that chronic condition, they're not going to be excluded from coverage when the policy renews. So if it is diagnosed with diabetes and is treated for diabetes and it's covered during one policy period. The next policy period. Still coverage for diabetes. So any of the medications, insulin syringes, symptoms mean group closed curves, Anything necessary to treat and take care of that? Pat is eligible for coverage for those chronic conditions. What about coverage for behavioral disorders? We do have behavioral disorder coverage for any pet that has an insurance policy of $15,000 or greater of coverage annually. And there's $1,000 that are available for that pet for behavioral conditions. What if they have a lesser amount annual maximum If they have less than $15,000 in annual coverage, we don't have behavioral coverage available for those pets at this time. Okay, just out of curiosity, what is the most common annual maximum with these new policies that folks choose? I don't know the answer to that. I'm going to guess that it's probably in the $15-$25,000 range. That's where most of our policies were previously. I do know that we sell quite a number of uncapped annual coverage policies. But I think a lot of people realize that $25,000 of medical expense reimbursement is a very sizable sum that will meet the needs of most pets in a year. What about your coverage for prescription foods? We don't provide coverage for any prescription. Dudes at this time you did with your old policy for, Was it just foods that treat or prevent stones? Is that right? Correct? And our old policies, we did provide coverage for foods that provided coverage for the dissolution of bladder stones and urinary crystals. But our new enhanced policy does not provide coverage for prescription foods. As I'm sure you're aware some of the prescription diets they cover in certain circumstances, depending on the crystal or depending on the type of stone that might be in the pet. And so as a result of that, the diets continually changed and it made it very difficult for our clients to know what was or wasn't covered. We really wanted to simplify it and make it so that the food just would not be eligible for coverage because it needed a little bit more streamlined for our clients. Okay. What about your coverage for dental diseases? We do provide coverage for dental disease. So any degree of periodontal disease gingivitis on up any Malik occlusion. As long as it happened during the policy um will provide coverage for that will provide coverage for fractured teeth, will provide coverage for root canals, will provide coverage for um bree says we've provided coverage for all sorts of different issues that have happened with pets. Oral health. So as long as it's not a routine meaning there's no disease notice on the medical records, as long as it's not routine care will provide coverage for any degree of periodontal disease or oral health complications. And I think that's an important differentiator in the pet plant policy as well. Just the broad nature of coverage and it applies to all teeth. There are some other policies that are out there that might have some of those coverages but doesn't apply to all the teeth and the mouth. But in a pet plan policy, everything at least just describe applies to all the teeth in any darby cats now so you don't cover wellness cared correct. We do not provide coverage for wellness care. We provide coverage for all the unexpected fees. So all accidents and illnesses that happened during the policies, those are all things that we provide coverage for. So we provide coverage for the unplanned expenses of owning a pet just to help people understand this. Uh One of the most frequent recommendations that we, as veterinarians make to our clients is to have their teeth cleaned and so if a client had their pets teeth cleaned, there was no evidence of tooth fractures. Abscesses, periodontal disease, then that would not be a covered expense. Correct? If you're just scaling off the tartar and there's no evidence of gingivitis or anything of that nature, that would not be a covered expense. But if there was gingivitis, if there was any sort of abnormality that would be eligible for coverage. And of course most of the time there is gingivitis associated with, you know, some some degree of periodontal disease at least in in pets. And so different treatments for periodontal disease would be covered, then correct. Any treatment for the treatment of periodontal disease is eligible for coverage. If there was a fracture of a canine tooth or a slab fracture of 1/4 upper pre moller that required extraction, you would pay for that, correct? Absolutely. Those multi rooted teeth of canines, any of those any teeth in the mouth. If there is a fracture and it needs to be in the tooth needs to be removed. That's eligible for coverage, let's say the pet owner went to a veterinary dentist and had the canine tooth that was fractured, a root canal and then crown, would you pay for that? Yes, we would. I know some companies don't pay for that or some pay for or at least their policy says they'll pay for a root canal, but they don't specify, they'll pay for a camper crown. You know that type of thing. We don't have any limitations on our disease coverage prepared. Donald disease. So really anything that is a disease process or an accident related to the mouth that happened during the policy is eligible for coverage. So car nasal teeth extractions, root canals. Any of those things are eligible for coverage. I know that the canine teeth can be pretty challenging because they have a very long route, but those are also eligible for coverage with no exceptions. As long as it happened during the policy, are there limitations on coverage? If the veterinarian had recommended teeth cleaning treatment prepared all disease maintenance, carried home brushing the teeth, et cetera. And let's say the client declined, that, would there be any limitations on coverage for future claims for periodontal disease? If that type of thing happened? If the peppers showing clinical signs of an abnormality of oral health. Prior to policy, we would not be able to provide coverage for that during the policy. But if during the policy, if that's when they started showing clinical signs of Perry's policy for on oral health abnormality, those would all be eligible for coverage? We do encourage our pet parents to follow their bets recommendations, making sure that they're taking the best possible care of their pet. So if they're recommending doing a dental procedure, we do encourage them to follow their bets recommendations, but it wouldn't discourage their coverage if um during the policy they did not feel comfortable at that time providing treatment for their pets. Um We do understand that obviously there are things going on in life and we just want to make sure that the pets receiving the best possible care. Okay, what about coverage for alternative therapies? Absolutely. We understand that um everybody has a different perspective on medicine and if your bets recommending and eastern and western, um a combination of care or just an alternative therapy treatment, those are not eligible for coverage. So anything from stem cell therapy to acupuncture to chiropractic care, to laser therapy. Anything that's provided by a veterinarian is going to be eligible for coverage for conditions that occur within the policy. Are there any limits? We don't have any limits on any of the alternative therapy coverage is. So it's you and your veterinarian determined that the best course of treatment for your back pain is going to be chiropractic care, acupuncture and laser therapy and hydrotherapy. Those are all going to be eligible for coverage. Up to the annual limit of the policy. Go ahead steve, I was going to add to the list at least said holistic therapy is performed by a veterinarian also included in the pipeline policy. Okay, what about coverage? For example, these Absolutely, we know that examination fees can be a really big part of your pets care. So those examination fees for all illnesses and accidents are eligible for coverage if you go to a specialist, those examples can be particularly costly and those are also eligible for coverage. So any recheck, see any sick appointment, accident appointment specialty appointment if you go to a teaching hospital, all of those exams, these are eligible for coverage. Will you pay the veterinary hospital directly in case of a large claim when the client can't pay it all up front? Absolutely. We just want to make sure that both parties agree to the to the payment schedule. So if the hospital is okay with it and the policy holders okay with it, we're more than happy to pay to that hospital directly for those claims. Will you do a pre certification of acclaim? Yes, absolutely. We do um pre certifications for claims all the time. We do like to make sure that people have that peace of mind knowing that something is going to be eligible for coverage a lot of time. This actually goes in conjunction when we're going to pay that hospitals directly um because you know it is a business stand of the day and the hospitals need to make sure that they can keep their lights on and pay their staff and continue to take care of pets. So pre certifications can be done. We processes within 72 hours of receipt Monday through Friday. You know, this kind of gets back to what we were talking about earlier. The need that I think to have the claims department available 24/7 to be able to pre certify a claim within a reasonable length of time, say in the middle of the night, just to give everybody some peace of mind. And especially in the case where it's going to be really expensive and perhaps the pet owner Kent pay it all up front and you know, even though they have pet insurance are going to be faced with, what do I do and you know, the veterinarian peace of mind that it is covered and I can work with this client who can't pay it all up front. Absolutely. We definitely try to do everything we can for our policyholders. If there's somebody who's available that can take care of that pre certification, we will certainly take care of it If there's questions that we can answer about the policy and explain how the policy is used and how it's designed to provide coverage. We absolutely explain all of those things. We are available for those questions 24/7, we just don't necessarily have a license claims adjuster that's available at those times. But as we discussed previously, I think we're approaching that point where that's something that we're going to have to consider right as the category continues to expand. We have more and more policyholders that may fall into that category. That's something that we will surely address as we, as we get to that point. Will you perform a medical record review if requested by the policyholder to let them know if any conditions are pre existing. Absolutely. So if a policyholder wants us to review their medical records um to perform a medical underwriting to explain what border would not be eligible for coverage, um we can do that at their request. We asked for the past two years of medical records and then we have our veterinarians read through those records and pick out anything that would not be eligible for coverage and outlined that in a in a document for the policyholder. We'd really like to be able to do this so that there's no surprises and they have a clear picture of what coverages for their pets. When is the best time to have that done? Honestly, I think a great time to do that is after, you know, after you purchase your policy, maybe after you're waiting periods. Just so that we have a very clear picture of what coverages for that particular pet, but it can be done at any time. So if you, if your policy is coming up on renewal, you can do underwriting than if you have if your pet has just had another examination and you want to make sure nothing changed. We can certainly review at that time as well. But I would say most commonly when people first purchased their policies, they really want to understand what coverages are available for their pet. And that's when they commonly do the medical underwriting. And I think we find that quite a bit, but as people are considering ensuring an older pet or if they have a newly adopted pet coming into the family that they don't know a lot about the history of the pet, maybe they thought they got the pet from a shelter or a breed rescue. A lot of times we'll get requests for medical underwriting review on those pets. So let's say they did adopt it from a rescue or a shelter and they really don't have hardly anything as far as background of this pets health. Uh, and they requested a medical record review. I mean, with, with, y'all required them to take the pet to a veterinarian for an examination and then kind of go off of that. If they don't have any medical records documenting an exam by a veterinarian, we would ask that they would have an examination so that we can truly provide them a good understanding of what is or isn't covered. And then anything that would be found during that examination, we would um, include on that exclusions. Left premiums have been going up pretty dramatically. At least it's been my estimation from going to pet insurance websites and getting quotes and just hearing back from pet owners that at renewal the premiums have taken sometimes a very substantial jump first. I just want to ask about your new policy here. I assume that y'all did a comprehensive actuarial review when you introduce these policies and premiums, especially for older pets have increased dramatically. Can you speak to that? Yeah, there we definitely have seen some increases in premiums, mostly due to pets aging. We know that the cost of care increases the types of conditions that they encounter increase over the over the life of the pet. So we are seeing more rate increases on older pets. Typically, those replied at time of renewal. We are seeing through the actuary review that you discussed. We are seeing increases in claims, increases in total exposure and costs of care. You know, we've talked quite a bit through this discussion about the broad nature of our coverage and all the things that we do cover, veterinarians have so many technologies now at their disposal and all of those that come out of cost. And head owners want those treatments because they're very effective. I mean, we're paying for cyber knife therapy on dogs now to treat cancer and a lot of times there are multiple alternative therapies that are utilized through the rehabilitative process. So we might do a surgery for hip dysplasia, but then that dog might still get acupuncture hydrotherapy stem cell therapy, all part of that treatment. So, all of those things are driving the total cost of care. Those technologies can be quite expensive, thankfully. They're also very, very effective. So pets are getting the care that they need. The outcomes are much better. Pets end up living long comfortable lives with successful treatment of some of these conditions. But those are coming out of cost and those are reflected in some of the rate increases that we're having to apply to policyholders when you send out renewal notices and there is a premium increase. Do you provide options for the policyholder? Like I know what I used to have to pay for my own medical insurance. Sometimes it didn't go up at all, but frequently it would go up and the insurance company would provide two or three options as far as other plans that you know, I could keep the coverage and reduce the premium. Do you all do that? Absolutely. And this is where the customizable nature of our new policy really are beneficial because our policyholders have so many more options to customize the policy but maintain the coverage. So you can choose a higher deductible or a higher copay, lower reimbursement amount and maintain a premium that you're comfortable with that ensures your pet still has effective coverage. But at a premium that you're comfortable with for your pet. Something just popped in my mind when we were discussing your deductibles, of course you're old policies all had per incident or per condition deductibles. But when they renew they can switch to an annual. Is that right? We do have the option for our policyholders to select an annual deductible. It is on a preapproval basis, but they do have the option to request that and then we will be able to inform them if an annual deductible as an option for them for their policy. You know what the parameters are for that. It depends on their cleans history, meaning if they've had chronic conditions in the past or if they've had just accident claims in the past, it's based on the conditions that they've had coverage for. When I saw that you had, you are now offering a $2500 deductible. The first thing I thought about was other companies are gonna be following suit before long because the fact that most of the companies now pay according to veterinarian voice and you know, new more expensive treatments, medications and so forth, are coming out. So reimbursements are gonna be higher and therefore premiums are going to have to go up to compensate for that and you know, senator or later even $1000 deductible. The premium may still be out of their comfort zone. Is that another reason probably that y'all went ahead and offering a higher than $1000 deductible. I don't know that. We thought about it in that way. I think it was really more from conversations with our policyholders and frankly sometimes conversations with prospects. People who may be looked at pet insurance maybe specifically at pet plan through our research. We went back to them and said what what are you looking for? And ultimately it was, you know, I want a low cost option that will protect me against these catastrophic events. So the $2500 option obviously drive your premium way way down compared to any of the other options. So we wanted to have that available to policy holders. As I mentioned, that's not one of the higher requested in the new policies that were writing. But we do have policyholders that are taking $2500 deductible. But the bulk of the new policies that were writing have deductibles in that 250 to $500 range. And then there's another group of $750 deductible folks. And the sizable group, actually $1000 deductibles. Anything else that you all would like to add about your new policies? I think we've covered it. I think for pet plan we think of ourselves first as a pet health and wellness company that works hard to help our policyholders keep their pets well, we pride ourselves in customer service being available to policyholders. Hence our 24 7 customer service center Speed of claim reimbursement, a key component of that is a new app that we have and just about 18 months since our app has been available, Almost 50% of our claims are actually being submitted electronically through our app. So it's a very simple process, a policyholder can receive care for their pet at checkout at their veterinary practice. When they received the invoice, they can literally select the pet they want to file a claim for right on the app, take a picture with their phone of the invoice, push submit, and it goes right into our claims portal for retrieval by our claims adjusters, speeds. The claim process significantly makes a paperless and simple for policyholders for getting tremendous feedback on that and it just improves that experience that they're having with pet plant. So that's again another area that we want to differentiate ourselves is on customer service and a seamless and speedy claim reimbursement process. Absolutely steve. And I think, you know, we just want to continue to be able to provide comprehensive coverage for our policyholders, make sure that they can take care of their pets and that they have the tools to do so without having to worry about the cost of care.