In the past several years, policyholders of several pet insurance companies have received renewal notices informing them of significant premium increases - sometimes 30 - 50 - 70 percent or more. When they contacted their insurer demanding to know why, the explanation given often fell short of helping them understand why the increases were necessary. While some policyholders accepted the increase, others dropped their insurance or switched to another company with more reasonable premiums.
In this episode, Laura Bennett and I talk about the factors that cause pet insurance premiums to go up or down. Besides being the CEO of Embrace Pet Insurance, she is also an actuary whose job it is to look at all the factors that influence the premiums for the pets they insure.
Therefore, she is able to give a rare "behind the scenes" look at how Embrace adjusts premiums for their policyholders when necessary. She talks about the standard age and inflation increases, but also explains how an analysis of actuarial data can potentially lead to significant increases from time to time.
At the same time, she offers ways that pet insurance companies can minimize the need for large increases in premiums.
We also discuss steps that policyholders can take to keep their premiums within their budget as premiums do increase over time.