Bringing Pet Insurance to Heel with Intelligent Claims Management

Discover how an intelligent claims management solution enables pet insurers to increase adjusting efficiency, improve accuracy, optimize decision-making, enhance customer satisfaction, and more.

While famous TV rescue pooch Lassie was the first dog in the US to be issued pet insurance in 1982, pet insurance has actually been around for over a century. The first policy was written in 1890 by the founder of Swedish insurance company Länsförsäkrings Alliance Claes Virgin, for horses and livestock. Still in Sweden, 34 years later, the first dog received insurance coverage. In 1947, Britain started issuing pet insurance policies. With the US slow to catch on, the ubiquity of pet insurance did not become a global trend late in the 20th century (Lassie to the rescue yet again). Only in 2007 was the North American Pet Health Insurance Association (NAPHIA) founded to establish and maintain standards for the pet health insurance industry.

Pet insurance is bought by pet owners to partly or fully cover costs of veterinary treatment of their pet’s illness, injury or wellness. Rising costs of veterinary treatments, drugs and technologies is increasing costs to pet owners and boosting the demand for pet insurance. Pet coverage is becoming more and more popular, while the potential to leverage untapped is still attractive to insurers looking for new markets.

The global pet insurance market was valued at $4.5 billion in 2020 and is expected to reach $16.8 billion by 2030. According to NAPHIA, out of the over 144.6 million people with pets in North American, only 4.41 million pets were insured at the end of 2021. Still, this is an increase of 27.7% from over 3.45 million pets insured in 2020. A major uninsured pet population in the U.S. alone, points at an aggressively growing sector that exceeded $2.83 billion at the end of 2021, with growth that more than doubled over the past four years.

Insurers would be missing an opportunity by ignoring the growing revenue stream. But in order to make the most out of the pet insurance market, they must be able to overcome the obstacles that exist in the relatively new space.

Pet Insurance Challenges

  • Self-reporting a claim: Pet insurance is a first party, reimbursement-only product, meaning that policyholders want to be able to take their pets to the vet and then come home, file the claim online, attach the invoice, and get paid. For this to happen, insurers need a solution that offers simple and accurate claims self-reporting by the insured, directly into the claims system.
  • Efficient bill adjudication and payments: Currently, veterinarians do not differentiate care by program, so bills submitted for reimbursement will not be itemized as such. This can make bill adjudication and payments take longer than expected.
  • Balancing multiple programs: Policyholders often choose an Accident and Illness (A&I), or Wellness program, without clearly understanding the coverages and limitations of each. Then when it comes time to report a claim, they could feel frustrated or misunderstood. Adjusters need all the contextual information to quickly communicate the coverage or limitations to the policyholder and provide the best service.
  • Preventing fraud: Increasing fraudulent pet insurance claims are a contributor to increasing costs of pet insurance premiums. Pet fraud insurance patterns include insuring non-existent pets and claiming payments for early deaths; faking accidents to get payout for injuries not covered by a policy; submitting inflated charges; and pet swopping to get treatment for an uninsured pet. Claims solutions need to be able to prevent fraudulent claims.
  • Omnichannel communications: Today’s insurance customers expect real-time communication across multiple channels – text, email, chat, phone, video. Corresponding just by snail mail, or even email, is no longer an option. Unfortunately, most claims insurance technology is outdated and does not support omnichannel communications, leading to frustrated customers and unhappy adjusters.

Simple Claims Processing: What do you need for efficient pet insurance claims process?

Insurers who offer pet insurance policies today are seeing rapidly increased demand and need an intelligent claims system that will add value to their process and increase customer satisfaction. They need a solution that’s customized for pet insurance and compatible with their policy admin system; offers intelligent automation capability in an area where many of the claims processes have been manual; offers flexible options to the customer; and reduces instances of fraud.

How Five Sigma delivers value for pet insurers

Five Sigma’s claims management solutions (CMS) for pet insurers is an open, cloud based out-of-the-box pet solution and can be integrated and in production within weeks. The CMS makes pet insurance claims processing simple and smart by:

  • Automating claims submission: All FNOL data received from the insurers’ digital channels are automatically embedded into the system’s workflows and are ready for the next step in the process. The system ensure rapid system identification of claim types, automated triage and adjuster assignment.
  • Providing just-in-time recommendations: The system flags coverage and liability issues and presents the adjuster with relevant information and investigative steps within the claims system, preventing fraud.
  • Improving decision making: Based on our advanced data modeling, we enable insurers to monitor your operations and receive actionable insights that will help you make strategic management decisions.
  • Aiding in damage assessment and negotiation: The key to effectively negotiating a claim begins with accurate damage assessment. Our CMS includes a digital bodily injury evaluation module to itemize, assess and aggregate damages.
  • Embedding omnichannel communications: Our CMS includes an API-level communication module that supports all types of communications including: SMS, mail, voice video calls, and even WhatsApp. All claims-related communication is documented, stored and analyzed automatically.


Pet Insurance is a rapidly growing market, and insurers can benefit from this sector if they implement an intelligent claims solution that keeps them ahead of the competition and ensures that their customers are satisfied. They can achieve this by implementing a solution that enables their customers to easily self-report directly into the claims system; that ensures that the adjuster has all the relevant contextual information at their fingertips for efficient bill adjudication and payments; that offers communications with customers that is seamless and omnichannel; and that minimizes fraudulent claims.

To learn how Five Sigma provided an open, cloud based out-of-the-box pet solution that was integrated and in production within weeks, download our use case.


Frequently-Asked Questions

What is pet insurance?

Similar to human health insurance, pet insurance is coverage for dogs and cats and other household pets that enables policy owners to cover veterinary costs. However, because pets are legally considered personal property, pet insurance is regulated as a property and casualty line of business. Pet insurance reimburses paid veterinary costs for medical (accidents and illness) and wellness health care. Generally, pet insurance plans exclude coverage of pre-existing conditions.

How does the pet insurance claims process work?

To make a pet insurance claim, policy holders will typically first need to pay for veterinary services out of their own pockets as pet insurance generally operates on a reimbursement model. Then the policy holder requests the insurer reimburse them by making a pet insurance claim. If the veterinary care is covered, the insurer will send the owner the funds after the claim is approved. Pet owners typically need to submit the following to file a claim:

  • An itemized bill detailing the services provided at the veterinary visit
  • A claim form provided by the pet insurer
  • Veterinary records showing that the services were not provided to treat an excluded pre-existing condition and rather were for a covered illness or injury
  • Information on how reimbursement should be made to the policy holder
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