Launching a startup is precarious at the best of times – but doing so during the financial crisis of 2007 must have been particularly challenging.
“It was spectacularly bad timing,” Mark Colonnese, director of Altrincham-based Aquarium Software, admits to TechBlast. “2009 was our hardest year and we seriously considered giving up.”
Those days are now a distant memory following Aquarium’s takeover by US firm Trupanion in 2019 as it blazes a trail for InsurTech in the fast-growing market of pet insurance.
The company was founded by Michael Goldstone in 2006 and originally focused on business process automation platforms for financial services firms. It was forced into a pivot which ultimately prevented it from being thrown to the sharks.
“We knew we had a phenomenal product, but because it was not focused on one market, it was difficult to get traction,” says Colonnese. “People would buy what they knew – even if it was technically inferior.
“Our first pivot – one of several – was to focus on insurance as a market and then specific niche insurance products such as pet and travel.
“We turned a corner in 2010 and never looked back. Part of the reason for the turnaround was the decision to begin to focus, which sounds easy – but for us was hard.”
In the last 10 years the software has been extended to enable insurance companies to quickly and effectively create and deploy insurance propositions and service them. And most crucially of all, Aquarium – led by MD Ed Shropshire – has narrowed its remit even further to focus purely on pet insurance.
There are now around 17 million UK homes with a furry friend – but only around 25% of these pet owners currently have pet insurance. In the US the figure is even more stark – less than 3% – compared with an average of 20% across European markets.
The Pet Food Manufacturer’s Association suggests that 3.2 million households in the UK acquired a pet in COVID-19 lockdown.
“Pet insurance is one of the fastest growing and most innovative insurance markets – with huge growth potential, particularly in the US. It’s a market with massive potential and many insurers wish to enter it quickly. If insurers do not have a legacy product it is quick, simple and effective to deploy our platform,” explains Colonnese.
He says InsurTechs have a unique advantage over traditional insurers in this particular vertical. “Traditional insurers usually enter the market by adding pet insurance to their existing insurance business; but InsurTech companies and newer entrants can take a digital-first approach to the market, automating pricing policies and the claims process.
“The relationship between claims and policies is different to other insurance categories: claims can be more likely in the early part of a dog’s life when owners visit vets more. Pets are prone to need more treatment from vets when they are younger, whether it is for routine procedures like being microchipped or neutered, or because young animals can be more daring and often eat and drink things they should not.
“They are also less cautious and experienced when they are younger and can be prone to getting into fights and other misadventures.”
Aquarium is used by some of the industry’s leading pet insurance companies in the UK, Europe and North America, and enjoyed a record year in 2020. The acquisition by Seattle-based pet insurance provider Trupanion – which is also in the Australian and Puerto Rican markets – could give it even more of a global foothold.
“Our main focus for 2022 is to help Trupanion deploy our technology throughout the US. Thereafter its world domination,” says Colonnese.
Colonnese is very much the target market for his company’s clients, with two cats, a pair of Jack Russell terriers and several fish at home.
“Do one thing well,” he advises fellow tech startup founders. “Hire the best people you possibly can, promote your stars quickly and fail fast when things don’t work out.”