Pet project

Alex Thomas is thriving at PetSure, where her love for customers and their animals is paying off

By Bernice Han

Alex Thomas is a rarity in the insurance industry. Rather than joining it by chance, the PetSure chief executive made a deliberate move after a successful career in telecommunications.

She was looking for a field in which to “innovate and craft” a business, so when the opportunity arose to run the country’s largest pet insurance provider, Ms Thomas knew where the next chapter of her corporate story would be written.

Alex Thomas with her dogs Ripper and Teddy. She says being a pet owner “shapes how I think about product development and customer experience”

“It was extremely attractive to me,” she says of the offer from PetSure. “I had no underwriting background, no claims background, no insurance distribution background. But I have a natural obsession with customers.”

She did not view the insurance-shaped gap in her resume as a handicap. In fact, she says working at Optus owner Singapore Telecommunications – the largest telecoms group in southeast Asia – had equipped her with skills suited to the new challenge.

Insurance and telecoms share a trait: customers can easily switch from one provider to another. So, any business that wants to thrive must be ultra-adaptable to customer needs.

“The telecommunications business has taught me resilience, agility, commerciality … It was a great induction for me as I headed into insurance,” Ms Thomas tells Insurance News.

She has not looked back, and nor has PetSure. When she joined in 2013, gross written premium was about $150 million; it now exceeds $650 million, from a 75%-80% share of the market.

“I can’t believe I’ve been here for over 10 years … I did not expect it. But I’ve completely fallen in love with the business,” Ms Thomas says.

Being a dog-lover has helped. Ms Thomas has two bichon frise dogs, named Ripper and Teddy.

“It shapes how I think about product development and customer experience,” she says.

“Many of the experiences that pet owners have … I have it too as a pet-lover, so it completely shapes my thinking.”

Customer feedback matters a lot to Ms Thomas. “The first things I look at each morning are all of our product reviews of our brand partners and our sales report – it’s a real litmus test as to the quality of what we do.”

Under Ms Thomas’ watch, PetSure has strengthened its distribution network, which includes major companies such as Woolworths, Medibank and Commonwealth Bank, to extend its customer reach. All in, it has 33 partner brands, according to its website.

“I have had the privilege of being able to build on what was already here … but to put my arms around this business and put in place things that I thought were really important is incredibly motivating for me,” Ms Thomas says.

“I feel we’re always growing, so I finish one thing and there is another thing we have to do.”

There are many tasks on her to-do list. Tackling the low rate of pet insurance take-up is one. Raising Australians’ awareness of protection plans for their dogs and cats is another.

“I don’t think we’re finished in Australia with what we need to do to make the category more accessible,” she says.

A survey by Animal Medicines Australia, the peak body for animal health companies, suggests there is indeed plenty to do in a country with a pet ownership rate of about 69% – one of the world’s highest.

“To put my arms around this business and put in place things that I thought were really important is incredibly motivating for me.”

In 2022, Australians spent $33.2 billion on pet-related products and services, according to the survey. But insurance for dogs and cats accounted for only about $1.1 billion. Food and vet services were first and second on the spending list, at $17.1 billion and $4.7 billion.

Just 17% of dog owners had pet insurance, the survey found. In 2019, it was 30%. Among cat owners, the proportion dropped to 12% from 21% over the same period.

Cost remains the main reason for owners going without cover, particularly among lower-income households and older people. The survey found dog and cat owners were paying on average $776 and $535 respectively in annual premium.

Among younger people, the proportion citing cost as a factor has dropped since 2019. More say they do not know much about pet insurance, or were unaware it was available.

A small proportion of uninsured pet owners mention barriers including their pet being ineligible due to age or existing health conditions. Poor perceptions around pet insurance companies are also cited.

Ms Thomas says just 7%-8% of pet dogs and cats in Australia are insured.

This take-up rate has not gone unnoticed. Steadfast-owned insurance.com.au entered the market in March, and a trio of former IAG executives introduced a product last year – all backed by the same capacity provider, Pacific International Insurance.

Existing brands include covers underwritten by HDI and Guild.

Actuarial firm PFS Consulting, in a market overview released in September, says insurance take-up is expected to increase as more pet owners become aware of the benefits in the face of rising vet costs.

Ms Thomas is unfazed by the prospect of more competition.

“We’ve been around, but we don’t feel like the incumbent, nor do we act like that. We are still very focused on being better and doing better.”

This drive has led PetSure to an unusual strategy. “We needed to make our product more accessible, and the way I measure that is through the loss ratio,” Ms Thomas says.

“We’ve had a 5%-6% increase in our loss ratio, and that was deliberately planned, and we’ve increased it by optimising our operations.”

Explaining the logic behind the strategy, she says: “People can’t buy a product and then find that they make a claim and get denied … that is a big shackle you have on growth.”

She says the business has a loss ratio of about 60%, compared with about 50% a few years ago.

“On just this measure, it’s not junk insurance,” Ms Thomas says.

Consumer group Choice once labelled pet insurance just that – junk. But last year, it said offerings had improved after providers lifted some restrictions or at least clarified conditions, so pet owners know what they’re getting.

PetSure made a major change last year, gaining a standalone licence from the Australian Prudential Regulation Authority and becoming the first licensed general insurer dedicated to pet health. Former owner Hollard retains a minority stake and still underwrites some of PetSure’s products. Hollard Investments, which owns Hollard, is the major shareholder in PetSure.

“So, some things have remained the same and some things are very different,” Ms Thomas says.

“We now have an independent board and the prudential responsibilities now sit formally with us … We’ve had to strengthen our risk and compliance capability within our organisation.”

Inside the animal kingdom

It should come as no surprise that the person who runs the country’s largest pet insurer is a dog-lover by nature.

Alex Thomas has two bichon frise brothers, Teddy and Ripper, and they are regulars at PetSure’s office in Chatswood, Sydney.

Employees are encouraged to bring in their pets and Ms Thomas says the office probably has the highest pet-to-person ratio of any city high-rise.

Sphynx cat Oscar is one of the PetSure office’s furry (or not) friends

It even has a small veterinary clinic that offers free vaccinations and regular health checks.

Raising Teddy and Ripper has helped shape Ms Thomas’ thinking about the business. “Having pets myself, I know how loved they are, their role in our family’s wellbeing, and how important it is to make pet wellness and medical treatment affordable and accessible,” she says.

Ripper recently had an operation that cost about $15,000. Thankfully, insurance was there to cover the treatment. “One of the big issues for pet owners is the affordability of treatment. Without pet insurance, most owners have no health and financial safety net, despite many pet treatments being on par with the quality, complexity and cost of human health and medical care.

“Our constant challenge is to develop and improve affordable solutions that also achieve high care standards for pets. We’ve made much progress in collaboration with the animal health community.”