A Cover For All Reasons
Sydney Morning Herald
Tuesday October 1, 1996
NICHE markets have become a business buzzword - even in insurance, where Cigna is fast developing a reputation for targeting the unusual.
If your cat has fallen off a roof and broken its leg, or your dog hasn't quite made it out of the path of an oncoming car, you know you are looking at big veterinary expenses. Broken pet limbs requiring anaesthetic surgery and a short hospital stay can set you back at least $500-$600, and up to $3,000 for serious injuries such as hip operations.
Animals also suffer from kidney failure, heartworm and urinary tract infections, which cost hundreds to treat. Just draining and stitching up infected cysts can cost $300 if an anaesthetic is involved. And unlike children's accidents and illnesses, you can't have animals treated under Medicare.
Because we are a nation of pet-owners, Cigna decided its Pet Protection Plan might sell well. It has sold about 6,000 policies in Australia. Cover extends to accident or illness costs up to a maximum of $1,500 for a dog and $1,200 for a cat in any one year. Cigna points out that Australia has the highest rate of pet ownership in the world (5.62 million dogs and cats), which means about 31 per cent of households have one or both, according to the latest Australian Bureau of Statistics figures. In the UK, where this sort of insurance was designed, 12 per cent of pets are covered by pet insurance.
There are two benefit options. Under the standard option, vet fees of up to $1,000 for a dog are paid ($800 for a cat). There is an additional $200 to cover hospital stays, $300 if you have to cancel the family holiday if the pet requires emergency surgery within seven days of the holiday departure date, and a $600 dog death benefit ($450 for cat), so you can either buy a new pet, have a weekend away to get over the death or buy a case of the best champagne for the wake.
The basic package costs $169.80 per dog per year and $132 per cat, or $14.15 monthly for a dog and $11.30 for a cat.
The deluxe package pays an additional 50 per cent benefit for vet fees, while the remaining benefits are about one-third higher. This package costs $195 annually for a dog and $158.40 for a cat. Conditions applying include an excess of $50 on the vet fees to minimise small claims which applies to each claim. The policy does not cover routine procedures such as vaccinations, desexing or deworming.
Cigna's other recent niche policy is a cancer-recovery policy aimed specifically at women.
As James Marshall, Cigna's marketing manager (accident and health products) explains, trauma insurance is priced on the higher mortality rates applying to the whole population. Cigna looked at the cancer statistics relating to women and priced the product accordingly. The policy provides a cash sum to cover additional medical bills if the policyholder develops specified malignant cancers of the breast, cervix, fallopian tubes, uterus or vagina, and is paid on diagnosis. It also covers other malignant tumours, leukemia, Hodgkin's disease and melanomas exceeding a depth of 0.75 mm.
The cash benefit comes at three levels - $12,500 for level one, $25,000 for level two and $50,000 for level three, with premiums reflecting both the level of benefits and the age of the policyholder. There is a maximum $20,000 paid for diagnosis of non-specific female cancers, stroke or coronary disease. There are additional home-care benefits of up to $500 per month for up to six months of treatment at level one, rising to $1,000 at level two and $2,000 at level three.
Premiums vary from $4.20 per month for a level one benefit up to age 40, rising to $24.60 per month for the same level of benefit at age 64. The level three benefit starts at $16.80 per month up to age 40 and rises to $98.40 per month at age 64.
© 1996 Sydney Morning Herald
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