Sunday, December 04, 2022
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Wagmo sold its first pet insurance policy in the United States in 2020. Co-founded by Christie Horvath and Alison Foxworth, the venture capital-backed startup has been able to leap from availability in 13 to 40 states between late 2020 and May 2021, no small feat. Horvath often underscores that the company is co-founded by two women in a male-dominated industry. It’s also one of few pet insurance businesses whose only business is pets.

Wagmo is also part of the growing club of newcomers — one of nearly a dozen pet insurers that have entered the U.S. market just within the past five years — in an industry with consistent double-digit growth, including an astonishing 27.5% growth rate between 2019 and 2020.

Wagmo may not yet offer live phone support to customers, but co-founder and CEO Christie Horvath personally returns customer email, which earned the company +2 paws on TCR’s rating scale. Horvath’s enthusiasm for her product, was obvious when we spoke in late 2020, and again in May 2021.

Only one other pet insurance founder and CEO, Trupanion’s Rawlings, is known to make customer relations a top priority, and things seem to be going phenomenally well for them. More on Trupanion in an upcoming story.

Horvath declined to provide any numbers when asked about enrollment or performance metrics but asserted that the company had seen steady growth since launching in 2019.

“I genuinely love insurance, which I know is so weird,” she says.  “But, truly, I think it’s a fascinating industry.”

Horvath, a graduate of Northwestern and Harvard Business School, says, her “Aha” moment came the summer between her first and second years of business school “There was this one moment,” she says, when her dog at the time fell ill from a brain tumor “and began seizing in the middle of the night.”

“It was like 10 o’clock at night, I’m at the emergency vet in Cambridge, Massachusetts, and he’s having a seizure on the floor. And before they would…take him out of the seizure and give him the meds, they made me sign a bill and pay a deposit. It’s the most terrible feeling in the world. The last thing you want to be thinking about when, when your dog is having a seizure on the floor. I got exposure first-hand to the role that pet insurance can play in a parent’s life and just how meaningful of a product it is,” she added.

Here’s something you don’t often see. Horvath, along with co-founder and COO Ali Foxworth personally returned our questions when we queried Wagmo late last year without identifying ourselves as reporters.

In most cases, we always identify ourselves as reporters. The reason we do not in this case is the same reason a restaurant critic does not identify himself or herself: We would otherwise be unable to ascertain any realistic, meaningful set of facts with which to show you, our readers, how a business interacts with its customers. How a business behaves towards journalists is also important because transparency is often an indicator of an organization’s health. Consumer reporters can assess professionalism, knowledgeability, savvy, integrity, overall training, and other metrics that ultimately reflect how involved company leaders are and in which areas.

“We are 100% focused on pets – it’s our expertise through and through,” Horvath promised in a news release last year. She added, “Every single person on our customer support is an experienced pet parent, equipped to help not only with product questions but also all the joys and concerns that go along with pet parenting.”

Faster claims turnaround time than many of the oldest, largest pet insurers?

Horvath says Wagmo is able to process insurance claims within 72 hours, which is impressive for an industry in which 72 days to process a claim is not unusual. TCR has filed public records requests for consumer complaints in every state that treats such materials as public records; Wagmo has not yet yielded any such records, though we still need more information to determine the veracity of this statement.

The math: why the 3-paw rating?

TCR uses a 5-paw rating system with 1-paw being the lowest possible rating and 5-paws being our highest rating. We reserve 5-paw ratings for individuals and businesses that make exceptional contributions to the health and well-being of people and their dogs.

Wagmo received a 3-paw rating based on losing four total paws, then gaining two bonus paws: 5-4+2=3.

  1. No live phone support: Subtract 1 paw 

We subtracted 1 paw for the fact that there is no live phone support.

  1. 10k limit policies, failure to disclose: Subtract 1 paw

Wagmo’s omits any mention of its $10,000 per incident limit (cancer treatment can easily exceed $10,000 in days, for example) from the sample policy published on its website as of May 11, 2021 — which we cross-checked with the policy we had archived from 2020 for discrepancies: both policies omit the per-incident limit. This makes comparison shopping and informed buying difficult.

In a brief telephone interview in May 2021, we asked Horvath about that. Her answer was unconvincing:

“The policy document that we have on our site is just the policy,” she said. “What happens is, every time somebody signs up, we automatically generate a fully customized policy document for your policy. So, if you, Emily, went and signed up, we would create a policy, it would have that full document. It would also have what’s called a declarations page, which gets auto-generated, which outlines everything and outlines your monthly costs [and] outlines your annual limit. It outlines your lifetime limits, outlines your deductible. It’s all the very first page in very clear, accessible display. ..We just don’t have it on the sample policy because in a future state, we right now only offer 10,000 as a limit. But there’s a scenario where we adjust that going forward with customer feedback. And in that instance, like let’s say we offered the customer the ability to select a lifetime limit or an annual limit other than 10,000, we would want that to be reflected in their policy documents. So we didn’t put one limit in the sample.”

Of course, it made sense that disclosing a $10,000 per incident limit to a prospective customer who has not yet put down credit card information seemed like a risky move. However, no, not notifying consumers to the extent that they are fully informed of any limitation on a covered claim does not make sense to us, and because customers are apparently only notified of the limit after they have signed up for the policy or as they are signing up, we subtracted one paw for the lack of disclosure.

Finally, Horvath offered something more straightforward: “It doesn’t make sense to show it in the sample policy…because all of that can be customized. It doesn’t make sense to show it in the sample policy. If we showed… the $10,000 limit in the sample policy, but then, you know, next month introduced an unlimited…” Horvath asserts that Wagmo might be wrongly associated only with per-incident limit policies. As a start-up, she expressed concern about the brand being associated with anything too quickly, let alone a payout limit.

That concern seems reasonable, but from the standpoint of consumers, we don’t see a company’s interest in keeping its branding options open as more important than a consumer’s right to access critical information about the limitation of insurance coverage.

“Nobody’s hit the limit yet,” she maintained. “We’ve had very positive reception to the limits. Obviously, it’s not going to be applicable for everybody, and this is just our starting point. We’re, fairly early on. And as customers give us feedback, and if there’s appetite and interest in a higher limit or an unlimited, it’s something we’re able to do and very, very open to exploring.”

COO Ali Foxworth, writing in an email, added this:

“We want to find a good balance between the coverage of the pet with the cost of the policy.  We do not want to have a cost-prohibitive policy to offer our clients and we include other endorsements in the policy that we believe will be more beneficial to our customers.  However, we fully plan to review, on an annual basis, how the policy compares against the actual claims submitted.  After each review, we can reassess the offering and make changes to the policy as needed.”

“We saw that the vast majority of claims fall far below that $10,000 limit,” Horvath told TCR. “And as you start to increase that limit, you have to increase the price of the policy. So, we wanted to make sure that the limit was low enough, that it would keep the cost down, but high enough to accommodate like 99.9% of claims. So we feel good about that limit.”

Importantly, Horvath leaves the door open to policies offering higher limits; we’re eager to watch the company grow and to see how Horvath builds more choices into Wagmo’s menu – and more up-front notice about those choices and the limits:

“We’re open to feedback from our customers and customers who are looking for a higher limit. You know, that’s something we can add down the line.”

“My personal reaction to the unlimited policies is that it’s kind of a marketing tool,” Horvath added. “In some very rare instances, someone will really need, you know, hundreds of thousands of dollars worth of coverage, but the vast majority of people tend to end up overpaying for coverage they’re just not going to use. And so we really wanted to take that away and just give people truly what they need without price-gouging them….We understand that some people really need higher limits and that’s what they’re looking for. And maybe ours is not necessarily the perfect product for that person, but we wanted to build something that helps most people.”

  1. The carte blanche cancel clause we can find in almost every pet health insurance company’s fine print: subtract 1 paw

Finally, the fourth point we subtract is for this cancel clause, which, we should note, the majority of pet insurance companies also hide in their policies, acting effectively as a pet insurance company’s own insurance – an emergency escape hatch in the event that a company cannot, or does not wish to, continue to provide coverage.

“It’s in there to allow for flexibility,” Horvath said, “just in case. I mean, we’ve never used it, so I think it’s just, like you said, it’s the insurance for the insurance company.”

Pet Insurance Profile

Availability by state

“Wagmo currently has pet insurance plans available in 40 states. Wellness plans are uniquely offered with or without insurance and Wellness plans are available in every state.”

-Alison Foxworth and Christie Horvath 5/13/2021

How many enrollees?

“We are seeing tremendous growth in our pet parent community and we have had the honor of reimbursing pet parents millions of dollars in over 20,000 claims in less than 24 hours.”

-Alison Foxworth and Christie Horvath 5/13/2021

How quickly are claims processed?

“Insurance claims are processed in less than 72 hours on average, every claim is unique and processing times may vary depending on the complexity.”

Why the $10,000 limit and if you feel so strongly about it, why isn’t it displayed prominently?

“We want to find a good balance between the coverage of the pet with the cost of the policy.  We do not want to have a cost-prohibitive policy to offer our clients and we include other endorsements in the policy that we believe will be more beneficial to our customers.  However, we fully plan to review, on an annual basis, how the policy compares against the actual claims submitted.  After each review, we can reassess the offering and make changes to the policy as needed.”

 

Updates

“We are very proud of the fact that over 95% of Wagmo members use their plans. We are building a community and service every pet parent will use and love.

We’ve built plans that are honest, accessible, and diverse and these core values are also displayed among Wagmo’s leadership and team members.”

Alison Foxworth and Christie Horvath 5/13/2021

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Reimbursement Limit

$10,000 per incident

$100,000 lifetime

Partners, Affiliates

Boost Insurance Agency formed a strategic partnership with Wagmo in fall 2020. Wagmo is administered by Boost.

Underwriter National Specialty Insurance Company
First Year Available in US 2019
CEO Christie Horvath
Founder

Christie Horvath

Co-Founder

Ali Foxworth

Website

Wagmo URL

City New York
State New York
Type of Company

Private