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Tuesday, November 23, 2010

A Successful Pet Insurance Company in Japan

I got an unexpected primer in Japanese pet insurance from one of the veterinarians who attended my November lectures in Tokyo. Dr. Asako Shimamura, a 2002 graduate of the Nippon Veterinary and Life Sciences University, introduced herself as an employee of Anicom Holdings, a growing pet insurance company that markets exclusively in Japan.

In discussions with Asako, and also with Tokyo veterinarians who have benefited from her expertise, I became intrigued by the recent success of her company. From a very small beginning in 2000, they now have more than 60% of the domestic market share for pet insurance in Japan.

When I asked Asako to explain her company’s success, she said, “Many people now regard pets not just as companion animals, but as members of the family. Because of her company’s vision―An insurance group aiming to lessen tears and brighten smiles―Anicom is on the march, with sales tripling to over 9B Yen ($110m US) in the last five years.

Dr. Shimamura with her cat, Satuki.
Asako is holding her pet insurance card, similar to what all clients carry.
This allows insured pet owners to receive immediate claim service
at their veterinarian's office. Veterinarians are also reimbursed
in a timely manner for the insured portion of the bill 
without any direct action required by the pet owner.

Dr. Shimamura explained that one of Anicom’s chief goals is the prevention of disease through networking and providing relevant pet health information to clients. She embraces this concept and has developed a research program that examines the epidemiologic impact of preventive medicine on claim data. She recently analyzed the insurance claims of almost 700,000 dogs, documenting the differences, for example, between veterinary claims for puppies and adults. The higher incidence of ingestion of foreign bodies and fractures in puppies suggests that client education for puppies should pay special attention to these two important problem areas.

Japan’s 130 million people care for approximately 24 million dogs and cats. Though this is only about 40% of the dog and cat ownership per capita in the United States, the pet insurance penetration rate is surprisingly similar (approximately 1.5% in Japan and 2.5% in America). The striking difference between the two countries, however, is the rapid growth of pet insurance in Japan. This could be due to the growing sophistication of veterinary care and also the increased value placed on the human-animal bond.

The perceived value of pet insurance to the consumer varies widely in different countries, reaching over 30% in some areas in Britain and over 50% in parts of Scandinavia. Whether the market share grows to these levels in Japan, or remains more modest as in the United States and Canada, may depend on the quality, service and educational outreach of companies like Anicom.