APIC seeks 45% rate increase in California

American Pet Insurance Company has filed for a 45% rate increase for its Pets Best Pet Health Insurance product in California, which, if approved, will impact 72,441 policyholders. The proposed rate adjustment would increase total written premiums by $31.4 million and is expected to take effect in April 2025. As a side note, JAB acquired Pets Best from Synchrony late last year.

In 2023, Pets Best had written premiums of $53 million and earned premiums of $54.7 million, with incurred losses of $43.3 million, leading to a loss ratio of 79.21%. This suggests that a large portion of premiums went towards covering claims.

APIC, a subsidiary of Trupanion , also reported losses in its Chewy pet insurance program for 2023, with an earned premium of -$267 and incurred losses of $161, resulting in a negative loss ratio of -60.26%. It’s possible that Chewy redirects California shoppers to Lemonade.

Meanwhile, the California Department of Insurance has recently approved a 14% rate increase for Lemonade, set to affect 57,471 policyholders. The new rates will take effect for both new and renewing policies on November 24, 2024. The adjustment is expected to result in an additional $5.7 million in written premium, raising the total premium for the program to $40.7 million. The approved rate change includes a maximum increase of 78.7% and a minimum decrease of 17.2%. Between 2020 and 2022, Lemonade’s 3-year average loss ratio for this line was 74.4%.

Bottom Line: The competition intensifies…