HK start-up raises US$25m to do pet insurance

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02:16

Insurance companies often avoid niche segments with low premiums and unattractive commissions, but online players are changing that. Without any need for sales agents, some are looking to tap precisely those areas.

One such niche is the pet insurance segment. In Hong Kong, online start-up OneDegree says there are more than half a million cats and dogs in the city, but less than three percent of owners are insured.

The company recently raised 25 million US dollars to develop its platform, for marketing, and to use as an insurance reserve.

It's still pending approval from Hong Kong's Insurance Authority, but could soon get the green light to offer its services thanks to a recently-launched fast-track scheme, designed to support online players and speed up the application process.

Right now, many pet owners say insurance is barely worthwhile because it doesn't cover expensive procedures like surgery. OneDegree hasn't revealed what products it will offer just yet, but co-founder Alvin Kwock says the company is planning to provide comprehensive, high-end coverage for costly treatments.

Alvin Kwock talks with CGTN. /CGTN Photo‍

Make them wanna...

Part of the challenge will be to create awareness. According to pet specialist Iris Tam, owners don't tend to think about insurance for their pets until medical complications arise, and many don't even realize how expensive it can get.

Iris Tam talks with CGTN. /CGTN Photo

She adds insurance companies may also want to focus on targeted policies for different breeds, as individual species are prone to different medical conditions.

It's an area where online players may have a big edge. Kwock says digital platforms allow for much more detailed underwriting, and that OneDegree can identify not just different breeds, but also age groups and even locations.

He's hoping the range of policies the company offers, a competitive cost structure and user-friendly interface will help draw pet owners.