Startup Figo announced last week that it has raised $3.9 million in private investments and officially launched a new pet insurance product--and it's debuting at a time when the demand for health plans for furry family members is booming. The company, which got its start in Chicago's 1871 technology hub, is entering a market crowded with the likes of Trupanion ($TRUP) and pet-insurance pioneer VPI. But its founders are confident they can set their product apart.
Figo CEO Rusty Sproat
CEO Rusty Sproat tells FierceAnimalHealth that much of Figo's marketing pitch hinges on offering pet owners flexibility, broad coverage, and what his team has strived to make the most sophisticated technology platform in pet insurance. The company sells three different plans, offering $10,000 a year in benefits, $14,000, or unlimited reimbursements. Customers can then choose among four different deductibles, ranging from $50 to $500, and four reimbursement amounts from 70% to 100%. The higher the coverage amount they choose, the higher the premium.
While most pet insurers have a per-condition deductible, Figo's is annual. So if a customer spends the entire deductible getting his dog treated for a tussle at the dog park one week, and then the pooch eats something bad the following week, there won't be second deductible on the subsequent treatment. What's more, Sproat said, "Some [insurance] companies cover the fee for the diagnosis and treatment but not the actual vet exam. We cover the vet exam. All pet insurance is good, but we've tweaked ours to make it a little more attractive."
One feature Figo doesn't offer is the ability for veterinarians to bill the company directly, which is one of Trupanion's major selling points. Sproat said he didn't want to place the burden of filing claims on veterinarians. Instead, Figo had put in place a cloud-based, pet-health management system--complete with a smartphone and mobile app and coordinated website--where owners can go to instantly file claims, store medical records, keep track of appointments, and more. "You can take a picture of your vet bill right from your smartphone at your vet's office, answer a few drop-down questions and hit 'submit,'" Sproat said. "So the claim is in the cloud and we can electronically put the money right into your checking account."
The Figo app helps customers find pet hotels, groomers, veterinarians and other resources near them when they're on the road, as well as offering a reminder service for routine care. "Most vet bills list all of the [vaccinations] for your pet and when they're due, so we allow owners to set up 'shot reminders' in the cloud, and we'll text you and e-mail you 14 days before they're due," Sproat said. Technology, added Sproat, "is really where we hope to stand out from everyone else in this space."
Figo couldn't have picked a better time to launch. The pet insurance industry is pulling in $721 million in revenues per year and is predicted to grow 6.8% a year for the next 5 years, according to a report issued last week by market researcher IBISWorld. More than 80% of the industry's revenues come from accident and illness policies for dogs.
Figo's plans have been approved in all 50 states and Puerto Rico. The company is up and running in California, and plans to add Illinois, New York, Massachusetts, and Washington by the end of May, Sproat said. The rollout will continue throughout the year.
And while Sproat and his colleagues are cognizant of the competition, he said, they are confident pet owners shopping around for insurance will be drawn to Figo's sophisticated tech-based offering. "What we saw was a lack of technology being offered to make it easier to manage your pet's life," Sproat said. "Figo is a platform that puts the entire life of your pet in the palm of your hand."
- here's the Figo launch press release
- access the IBISWorld report here