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Pawlicy Advisor

Pawlicy Advisor is a pet insurance comparison service helping pet owners find the best insurance deal, veterinarians improve care and increase revenue, and insurers lower their costs of customer acquisition. I caught up with Co-Founder Woody Mawhinney to learn about his vision for improving the complex pet insurance process through Pawlicy.

Pawlicy Advisor seeks to improve the process for pet owners, vets, and insurers

Pawlicy sells pet insurance in two ways: (1) through its website, where pet owners enter their pets’ attributes and receive breed-specific health information, including typical costs, and insurance quotes; and (2) through employers as an employee benefit at discounted rates. The website will be free for pet owners, and will generate referral revenue when a pet owner purchases or renews a policy. Additionally, Pawlicy can also refer and sell partners’ products through its platform, such as recommended pet care products and services, which represents an incremental revenue stream.

The process is simple – pet owners come to Pawlicy, enter basic information (like breed, age, and zip code), and the platform performs a basic actuarial assessment to recommend both basic insurance coverage choices as well as curated deals using a proprietary algorithm. There is also a component of educating pet owners about breed-specific risks, so that they can ensure that the policy they end up choosing adequately covers their pet’s needs.

Pawlicy Advisor’s Website

The problem with finding the right pet insurance today

For pet owners looking to purchase insurance, the process currently involves spending hours sifting through hundreds of insurance options with complex deductibles and a lot of fine print, after which they may still end up purchasing policies that are either too expensive or inadequate given their pets’ risks. The lack of transparency around choosing pet insurance plans affects vets as well – they are saddened and lose revenue when pet owners don’t accept treatment because of prohibitive costs. Vets indicated that needing to pay a bill upfront presents a financial challenge to pet owners, and treatment charges of ~$1,500 are prohibitive enough to stop or reject treatment. The North American Pet Health Insurance Association (NAPHIA) research finds that pet owners spent 29% more on veterinary care for dogs covered by pet insurance, and 81% more on cats covered by pet insurance, which highlights the difference in care that insurance can make. The same research also indicated that when pets are insured, conversations with vets are around quality of care, whereas for uninsured pets the conversation centers around cost of care. Insurance companies also face high customer acquisition costs largely due to the labor expenses associated with marketing to a poorly informed and difficult to identify target customer. Pet insurance is typically purchased at adoption, which often makes it challenging for insurance companies to identify prospective pet owners in time. Additionally, inexperienced pet owners often require significant education around their pet’s health and different insurance options.

The US pet insurance market represents an attractive opportunity

According to research reports by PackagedFacts and NAPHIA , the US pet insurance market currently represents a $1bn opportunity and is projected to grow to $2bn by 2022. Pet insurance penetration in the US is relatively low at ~1% today, compared to other developed countries like the UK and Sweden, where coverage levels can be as high as 30%. These reports indicate that key growth drivers include augmenting channels of distribution for pet insurance as well as changing consumer perception. The market has seen promising growth in recent years, with the number of insured pets in the US increasing by ~17% from 2016-17, and premium volumes growing by ~23% during the same period. Current players in the space include traditional insurers like Nationwide, Trupanion, and ASPCA, as well as newer entrants like Figo. Pawlicy’s value proposition as a marketplace with a proprietary algorithm is that it analyzes pet-specific information to provide instant recommendations, and helps educate pet owners about breed-specific risks.

“Pawlicy eliminates the need for owners to sift through hundreds of options themselves, saving them time and money by analyzing a pet’s risks and curating the best deals”

– Woody Mawhinney, Co-Founder of Pawlicy

Pawlicy Advisor was inspired by a personal experience

Woody and his dog, Wrigley

Pet insurance has played a critical role in Woody’s journey as a dog dad. His dog Wrigley, a Chinese Shar Pei, developed Shar Pei fever (a breed-specific condition that is treated daily using human heart medication) just a few months after he got him. Woody considers himself fortunate to have purchased a good insurance plan based on a vet’s recommendation. The plan has saved him over $10,000 over the last three years on Wrigley’s care. However, in the time they spent together at vet clinics, Woody has heard a lot of difficult conversations around him between pet owners unable to pay for necessary and critical treatments. As he reflected on his experience with Wrigley’s illness, Woody realized that a lot of pet owners are not as fortunate, either because they don’t have insurance, or because they purchased an inadequate policy relative to their pet’s health risks.

“At a time when most pet owners consider their pets to be family, many face difficult pet care decisions because of the high cost of veterinary treatment – my aim is to help pet owners navigate this complex space so that they can remove finances from important pet care decisions”

– Woody Mawhinney, Co-Founder of Pawlicy

Pawlicy’s Co-Founders: Travis (left) and Woody (right)

Through conversations with hundreds of pet owners, he discovered the different policy options, or didn’t know whether it was worth the money. A former risk analyst and consultant, Woody began building Pawlicy while at Columbia Business School to streamline the process, save on expenses, and point pet owners to the optimal plan in a shorter amount of time. He subsequently brought on Travis Bloom, who previously led the engineering team at Rocketrip (a Y Combinator W’14 startup with backing from Google Ventures and Bessemer Venture Partners), as Co-Founder and CTO.

Looking forward

Pawlicy is a licensed insurance broker (a major regulatory hurdle to potential new entrants in the sector), and already has referral fee relationships with insurers in place. The team is currently working on raising Pawlicy Advisor’s seed round, and is preparing to launch the platform in the coming months with its proprietary algorithm. They plan on focusing launch efforts in NYC, followed by other core US cities with relatively high pet insurance penetration.

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