The equine business contributes approximately $50 billion directly into the US economy. It directly employs about 988,000 people and provides many indirect jobs with associated events and services such as rodeos, derby catering, etc. The industry houses 7.2 million horses, with Texas, California, and Florida positioned as the top three states. There are predefined Equine Laws for most states, but navigating through myriad insurance schemes is not an easy task. Most ranches are run by owners who multitask a wide range of operations and since the industry is predominantly rural, availability of skilled back-office staff is limited. The industry is very labor-intensive and hires a significant number of contractual or temporary staff. Often, staff are immigrants and the utmost care is required to ensure they are bonafide. Laws governing the business vary from state to state. Some states require horse owners to cover Workers’ compensation and others don’t. Most owners cover their ranches for property, small business, general liability, mortality, and veterinary. They also avail insurance against injuries to horses in Care, Custody or Control of business owners, business vehicle and cover against fire and natural disasters. Unfortunately more often than not the insurance policy does not cover when the owner requires it most.
Many times the ranch owner is at risk of insufficient and incorrect policy coverage.This is because the nuances of risk are not adequately evaluated and addressed while purchasing a policy. Insurance lapse due to non-renewal in time is a common occurrence.This is because many business owners manage multiple business priorities and with no permanent office support it is quite common for them to miss the dates. Most owners prefer to work with an agency in a nearby town and prefer to work with the same agents. When an agent retires or local operations are shut due to M&A, horse owners find it difficult to navigate the system. At times the owner is on the move at a race or show and does not have real-time access to detailed policy information. Horse owners are business savvy but are not very comfortable consuming information digitally. They prefer to walk to a window and discuss with an agent face to face. There are a variety of policies available in the market. But each policy covers only specific requirements. Most owners file veterinary and surgery-related claims frequently as compared to Mortality claims. Surgical procedures are expensive and a reasonably common occurrence of colic surgery in horses can cost about USD 10,000. The claim is paid out by the insurance carrier only if all criteria listed out in the policy are met. In the unfortunate event of an owner losing a horse, the mortality policy is paid out only if a sequential list of requirements is met eg: exhausting all options to keep the horse alive. The cost of treatment is met partially by the mortality policy. Since nuances of policy detailing are often missed by the owner, it results in the loss despite having mortality cover. They prefer an external agency to compare multiple quotes and derive the best insurance option for them. The role of Insurance broker agencies is critical in not just selling a need-based policy but assessing and providing proactive coverage which will derisk the business significantly.
On the insurance provider’s side too there are certain challenges. The insurance carrier faces challenges in verification at ground level to prevent fraudulent claims since most equine businesses are geographically spread out in rural locations. With paper-based documentation going multiple reiterations of policy-related documents poses omission and error challenges. Many claims filed by insured consumers result in dispute since there is a gap between what the coverage provides and what the consumer seeks.
Broker agencies that offer equine insurance work in a niche segment. Manpower attrition is a big challenge for the industry. Millennial are not too keen on exploring jobs in rural areas. Training and retaining staff with a high sense of customer centricity poses a challenge. Without adequate grasp on the workings of the industry, many times CSRs may end up advising limited options and therefore leading to possibilities of litigation. Also, more disputes arise during claims because they are raised for claims which the insurance provider would not cover in the first place. The third challenge which insurance broker agencies need to overcome is the latency in obtaining documents. Major coverage areas such as veterinary services and surgeries require pre-certification which takes time to obtain from the vets and is manually mailed.
How can an agency grow its Equine Books?
Technology can reduce these challenges by seamlessly integrating the carrier insurance framework with customer insurance needs via broker agencies. Equine policies cover a bouquet of risks and there is scope for agencies to sell at higher premiums, offering wider coverage through endorsements. Liability and mortality policies by themselves have limitations and an agency could try to expand beyond these policies to cover a variety of coverage instruments.
Offer niche products: While the equine business is niche by itself, there are many subcategories such as breeds, purpose, etc. Insurance carriers underwrite specific risks. An agency can identify these niche risk areas to service and offer them as specialist’s services to clients.
Closely work with clients: Understand their business, financial capacities and why they choose to insure because when requirements are evaluated with a fine comb, the agency has the opportunity to bundle quotes offers which include a variety of coverages. This reduces the risk of omissions and also disputes in the eventuality of a claim being filed by the business owner.
Use technology efficiently: Agencies could use smart to stitch policy offerings, coverage evaluation, send reminders on renewals and give the most comprehensive insurance coverage for clients. Agencies could deploy smart chatbots that can converse with the horse owners, gather their requirements and facilitate downstream processes whenever and from wherever they are. Use of chatbots can continue to provide conversational experience similar to a human-centered process. Chatbots can engage the horse owners in multiple rounds of conversation, send them “updated/current” information and eliminate a paper-based process prone to version errors and omissions. Agencies could use tools such as ExdionQComp to help their CSR’s to assess the wide spectrum of quotes to meet the requirement of a horse owner. Smart solutions like ExdionRNU helps agencies gather right information through predefined forms and questionnaires that address state and carrier requirements. This helps clients get covered adequately and appropriately. Further agencies can gain rightful and current insights from the market from ExdionRNU’s platform which in turn can be passed on as benefits for their clients. With ExdionRNU vets can directly upload their assessment using their mobile to the platform thus cutting the time delays significantly. Automating all manual forms will accelerate the approval related process and eliminate latency in the system. ExdionRNU agencies can gain access to market-ready forms from state and carrier thus reducing manual entry work for their CSR and possibilities of any errors and omissions. Since the equine community is heavily influenced by peer associations, agencies help manage trainer contacts which can help in referral efforts. Harnessing a cloud-based technology platform like ExdionRNU will help agencies to manage the multiple stakeholder requirements of the Equine Insurance space. Agencies could use advanced analytics and access multiple portals to help protect the horse owners to buy insurance against natural disasters such as a hurricane, fire just a few hours before the event is to occur. With smart technologies, agencies will be able to sense the requirements of the horse owners much in advance and respond quickly to delight them with the best coverage possible.
The Equine business has multiple stakeholders who require very unique, tailor-made risk protection solutions. A niche business that is labor-intensive and mainly located in rural areas, it remains under-serviced. Agencies that can quickly understand and scale up to meet the insurance needs of this segment stand to gain long term stake with the Equine business community. ExdionRNU helps agencies gather right information through predefined forms and questionnaires that address state and carrier requirements. This helps clients get covered adequately and appropriately. Further agencies can gain rightful and current insights from the market from ExdionRNU’s platform which in turn can be passed on as benefits for their clients. The platform cuts time delays significantly by fully automating all manual forms, approval related processes. Since the platform follows turnkey implementation, the agency can gain access to market-ready forms from state and carrier thus reducing errors and omissions significantly. Since the equine community is heavily influenced by peer associations, agencies help manage trainer contacts which can help in referral efforts. Harnessing a cloud-based technology platform like ExdionRNU is key to managing the multiple stakeholder requirements of the Equine Insurance space.