Despite a large dip within the stock price and operating at a net loss, Trupanion (TRUP -3.35%) has some momentum behind it. On this video clip from “The Virtual Opportunities Show” on Motley Idiot Live, recorded on April 12, Idiot.com contributor Rachel Warren looks at some intriguing aspects that make the pet insurance company one to look at intently.
Rachel Warren: It is a stock that basically caught my attention plenty of months back once I was taking a look at the partnership that it announced with Chewy (CHWY -3.91%), which I feel is the corporate you are going to be talking about in just a little bit, Demitri. So, a superb lead-in there. I’ll touch on that in a minute.
So, Trupanion, the shares of the stock are down about 35% year-to-date last I checked. Again, one other one in all those firms that has been severely beaten down within the volatile market. But essentially, its basic business model, Trupanion provides pet insurance for cats and dogs. They are saying on their website with a Trupanion policy, all pets get coverage for unexpected injuries and illnesses. They cover a wide range of things starting from hereditary conditions to congenital conditions to unidentified issues.
They’ve one easy plan that each one pets get and their plan covers 90% of actual vet costs for eligible claims after you meet the deductible. Eligible pets receive unlimited lifetime insurance coverage without caps, there is not any payout limits. One in all the things that is really interesting about their platform, and that is something I’ll get into just a little bit briefly as well, there is a little bit of an AI connection here is Trupanion has something called Vet Direct Pay.
They essentially are capable of pay customers’ bills on to their vet. You simply pay your portion and so they handle the remaining. The vet hospital would submit the claim online as you try after whatever appointment your pet just had. You because the pet owner would pay a portion of that bill after which Trupanion would pay the vet directly for the rest.
As mentioned, that plan, that policy covers a wide range of things from illnesses to injuries, to even breed-specific conditions. There are a variety of potential situations that you just might encounter along with your pet that may be covered under a Trupanion policy. I believe the thing that is really interesting about what this company does is it’s filling a really specific need.
Anyone who has a cat or dog knows that might be very expensive in case your pet gets sick or is injured and even has a hereditary condition that they are coping with. I like what the business does. One in all the things that caught my eye specifically and the way I believed it will be a superb technique to tie into our topic of digital transformation that we’re at all times touching upon is the best way that Trupanion automates claims using AI.
Actually back in 2019, Trupanion won an award called the Innovation in Insurance Award for the usage of AI in its platform. It won it for its proprietary hospital software and groundbreaking work in artificial intelligence and claims automation. This artificial intelligence-driven automation, it enables that direct payment of claims to vet hospitals often inside seconds.
On the time of that award being given, the Director of Data Science at Trupanion, he was quoted as saying, “We have approached this method to design using artificial intelligence that replicates the decision-making process at those adjusting claims would normally be chargeable for.” He was saying, they were very excited by the best way that it has been received by the industry.
This proprietary software that they are using a variety of that on a really intensive human-driven means of adjusting claims has been automated by their proprietary AI platform and is why they can provide such smooth payment to vet providers and to enable a greater process for his or her customers. The software also does all the things from enabling vets to understand savings with bank card fees, increases in in-house pharmacy sales. So, it really helps on either side of that relationship. Not only for clients with pets, but additionally for those vet providers.
Just a fast have a look at how the corporate has been doing. They recently released their full-year 2021 results. Revenue was up 39% year-over-year in comparison with 2020. Their total enrolled pets, that figure rose by 36% in comparison with 2020. Subscription business revenue was up 28% year-over-year. The corporate’s still operating at a net loss. That was higher than its net loss in 2020 by a considerable amount.
But I believe the corporate is investing loads in its infrastructure and its AI platform and its business. Something to pay attention to there, the corporate’s not profitable. It did have positive operating money flow for the complete yr. I like this company. I’m not an investor. I’m a fan of what the business is doing.
I believe it’s really cool that they’re using AI not only to assist with the vet side of that relationship with those individuals which might be using their platform but additionally to make it easier for pet owners to make sure that their pets are getting the care they need. Interesting business. Its partnership with Chewy during which it essentially created customized plans that Chewy is now I believe as of spring 2022 has on its platform also appears to be a extremely promising area for the business. One to look at, I believe.