BFM Interviews Kevin, Founder of Oyen Pet Insurance

Listen to the interview here:

Arvindh: Hey, this is Arvindh Yuvaraj. You're listening to Open for Business and I will be joined in a bit by Kevin Hoong. He's the CEO of Oyen and Oyen is Malaysia's first, fully digital pet insurance platform. Now, at this point, you're probably surprised that such a thing even exists or you're confused as to why pet insurance is even a thing. Both reactions are valid because pet insurance isn't exactly popular here in Malaysia. But the people who have pets, especially cats and dogs, sometimes find themselves with very pricey vet bills. It happens and medical treatment isn't cheap, no matter how many legs you have. So, Kevin founded this platform to tackle and solve those issues specifically.

Kevin, thanks so much for joining us today. 

Kevin: Thank you, Arvindh. 

Arvindh: I want to start by talking about something that you said in a few other interviews that you did, that a lot of people have adopted pets over the last year because of the pandemic and the MCOs and stuff. And Oyen was started with them in mind. So, is it safe to say that this is your main target market? Like new pet owners? 

Kevin: I started Oyen sometime around late last year or rather the idea got incepted late last year when I was just with some of my friends who started adopting pets and many of them are young adults who are working at home. Their companies have policies that require them to stay and work at home. And they decided to get a cat for companionship. So from there as first-time pet owners, they usually have a lot of questions and a lot of them were just exchanging notes about what are some of the tips or what are some of the vets to go to? 

What kind of cat litter should we get, what kind of food they should take? And those were more of the initial phase of owning a pet until you realize that it also comes with the burden of the health care costs. From there, I've gathered all these feedback and realised that, "Hey, wait a minute, pet insurance is such a big thing all around the world. It's a $7 billion worth of premium globally. And it's a growing insurance segment. However, over in this part of the world, it's still not so popular. So, for us, when we look at the trend, like 25% of increased pet ownership during the pandemic.

And I think it makes sense, right? Having pets will help you with your mental stress, will help you stay positive and have something to look out for when you're at home, rather than living alone. And from that people are just getting more and more pets. And for us, we see that as an opportunity. 

We're not just only targeting new pet owners.  Millennials belong to about 30% of all the pet owners. They're existing pet owners today who are also concerned and experienced about the health care costs of their pets. And they know that. They're actively seeking out for insurance plans to cover their risks but today there are no credible options. And that's why we've launched Oyen.

Arvindh: And I guess it works both ways because people who suddenly adopt a pet sometimes don't realize that there's a huge cost that comes with a dog or cat. Check-ups, vaccinations, skincare products, grooming, can get pretty expensive unexpectedly.

Kevin: Yeah. So a friend of mine, her name is Jehan, she has two cats. One of her cats' names, who is currently insured with us, is called Siti Kylie Socrates. When she adopted her cats, she didn't know or anticipate the costs that will come with it when it comes to an unexpected illness. Her cat got a kidney illness and because of that she had to pay quite a hefty amount. So she was telling me, “it would have been great if I had cat insurance, then, then at least I can manage some of those costs.”

She really inspired me. And along with a few other pet owners, friends of mine who have given us a lot of feedback throughout this whole process to launch something that customers really want rather than what the insurance company built from the top down. 

Arvindh: What does Oyen mean by the way? Any meaning behind the name itself?

Kevin: If you are amongst the Malay community, you will notice that Oyen is a nickname for ginger-coloured cats. In Bahasa, the colour orange is oren. So it's a tender and loving way of calling your ginger-coloured cats. But they're also known to be a bit mischievous. They are naughty, they're a bit cheeky but they're fun. They're fun to have around. 

Arvindh: So basically, Garfield. 

Kevin: Basically Garfieled, but localised. 

Arvindh: Okay, so obviously you studied the market before launching Oyen and you saw a gap or pain point that you could tackle. So, what was that gap exactly?

Kevin: We're not the first to launch pet insurance in Malaysia. A lot of companies have attempted it. And I think over the years, the execution, or rather maybe the product design didn't cater to what the customers wanted. We saw this as an opportunity because many products are not successful in the first try. It takes iteration. It takes someone who can execute strategies or plans well. And it's also timing, right? We launched this at the peak of this pandemic and when I look at the numbers, they are actually 1 million cats and dogs in Malaysia. 

In fact, a lot of Malaysians own more than one pet. Some cat owners came to us with 10 pets, 15 pets and they want to insure all of them with us. And what we understand is there's only about 0.01% of cats and dogs insured in Malaysia. There's a big gap for us there to close. It's just how we designed the product to make it simpler and also to make it online and to have a unique branding behind it and personalisation. We have content to reach out to them because a lot of these customers, they want a brand that speaks to them.

It's no longer about one big insurance company selling 50 products that are not customised. We are stepping in here to bridge the gap between an insurance company that has the facility, the capability and the right people to manage the backend, which is the underwriting, the pricing. And then for us, it is about execution, going to market, talking to customers, providing customer service, designing a beautiful website for people to engage with. And from then on, we actually cater to the things that they want out of this pet insurance.

Arvindh: 1 million registered pets with licenses?

Kevin: So, the thing about licenses in Malaysia, between cats and dogs, only dogs are required to be licensed with the local authority.

Not everyone registers their dogs and cats do not need to be registered. The data that I have is from Euromonitor, and these are just the estimates or studies based on the 8 million households and how many of them actually own cats and dogs.

Arvindh: Interesting. Because I used to wonder why we don't have pet insurance here,  why it wasn't as popular. And then I realised that it's probably because of the pet culture we have here, maybe. Do you see that changing? Like, is there more demand now than there was maybe like 10 years ago? 

Kevin: Yeah. So, there's this thing called pet humanisation, right.

People treat their pets more and more like a family member. And I think the awareness of insurance also takes time to develop. I think insurance requires a certain level of financial education in the country. And I believe Malaysia, compared to other Southeast Asia countries, of course, other than Singapore, we're actually quite well versed with our insurance policies. We understand motor insurance now better, we know how to get travel insurance when we travel, even businesses are all getting insured. We are at a point where we reached that maturity in consumers, and also a point where people are treating their pets better and better, especially when you think about the new generation, the millennials, who rather than having kids, they have pets first.

It’s like a try-out on how their parenting skills are before they get their first child. So that's where we see the trend going and we decided that it's time we launch something for this group of growing customers, looking out for the needs for their pets. 

Arvindh: I see. I'm just curious before we continue, will you be insuring other animals in the future? Like hamsters, rabbits, guinea pigs, you know, a lot of people have those as pets as well. 

Kevin: We do get that a lot. We had one customer who came in and asked us if we insured sugar gliders. So, I had to look them up. I think I saw them when I was in Langkawi last year. But the thing about insurance is we need to have information about these pets first and typically in large numbers. Insurance is all about having a large pool, predicting the claims number and then pricing it accurately. Globally, the most popular pets are cats and dogs. And also they have a longer life span and easier to manage or predict, whereas for animals like hamsters, maybe goldfish, these are very hard to predict and the data is very scarce. So, not many insurance companies will actually insure more than that. So, for now, we are actually limiting currently to only pet dogs and cats.

Arvindh: So you have an eligibility list before pets can be insured, right? So, not every pet can sign up immediately. Could you tell us about that eligibility? Because it's different for dogs and cats. 

Kevin: For cats to be insured, first and foremost, they have to be between the ages of 12 weeks to 10 years old. And also they need to provide an identification of their pet, which means you need to submit a vaccine report or a vet medical ID.

This is usually issued after you get your pets vaccinated or your cats vaccinated, because it shows proof that you own the pet. Insurance is always about having an insurable interest. If you don't have that interest, then you can't get insurance. Imagine you're trying to insure a car, but you don't have proof of ownership of the car. It's the same concept. 

So the third thing is that you can't insure a stray. You have to insure a pet that lives with you. That resides with you and is in Malaysia. 

Whereas for dogs, similarly, you need to be between the ages of 12 weeks to 10 years old and you have to be microchipped. And on top of that for dogs, they cannot be under the restricted or banned breeds. I think the insurance company just wants to  manage their risks because one of the coverage that we actually provide for dog owners and also cat owners is third party liability coverage.

What that means is that whenever your pet injures somebody else, typically a member of the public and potentially cause them harm and they will need to get medical attention, the cost of the medical treatment will be covered by the insurance company. Those are the key requirements for both cats and dogs. Of course, if you want to read it, you can read it on our website online and that can provide you with more description. 

Arvindh: I want to go back to the eligibility list for a bit and something in that list. You said that dogs have to be microchipped and under a certain age, right? But I'm guessing that other than the pedigree types or the ones that you get at the store, the ones that you buy, I think most local dogs are not microchipped. And I'm not sure if that's even a popular concept here. So, isn't that like a whole segment of the market that won't be able to use your service?

Kevin: Microchips have been around for some time and a lot of people know the benefits of it. Globally, it's very common for dogs or cats to be microchipped. It helps. There are a lot of benefits. In the event where your pets get lost, I think that that really helps the owners to identify them and also it helps you keep track of their (medical) history.

The medical history of a pet can be stored if you have a single data point. Over the years, a lot of societies or even adoption centers, have been promoting and making sure that pets should get chipped. So I think what we're doing here is we are educating the pet owners to see the benefits of this microchipping.

Of course we understand that it's also still a hurdle, but there are long-term benefits to it. And it's only a RM25 to RM50 cost. We have waived the requirement for cats and negotiated this with the insurance company, but we haven't been able to do it for dogs because maybe there's no clear alternative to it yet.

Regardless, we have already helped the 60- 70% of our target audience because there are more pet cats in Malaysia and pet dogs. For the other 40%, we need to continue to educate them about microchipping. What we want to do in the future is potentially bundle everything into our services.

We want to be that one stop location where you come and get your microchip booked and then we can channel you to our vet panels or vet partners. We can even get you to pre-book your vaccines, pre-book all your additional medical checkups, because these are riders. Insurance companies typically don't cover these routine checks because insurance is to protect against unexpected illnesses, not to protect a sure thing, otherwise there wouldn't be need for insurance. 

We can assist in giving you the services as a top-up, as a rider, at a discount. Then it incentivises pet owners to remember to get them vaccinated because most pet owners forget about their vaccine schedules because it's written on a piece of paper.

We want to digitalise the whole journey and to give customers that seamless experience and microchip will come in, in the future, where we can just give them that easy access to get them chipped and to get them insured.

Arvindh: I liked that you mentioned how you are sort of educating the market as well. And I guess if people know that they can get the pets insured, then there's more incentive or there's more initiative to take them on to get them microchipped because before this there are a lot of people who adopt dogs, adopt cats from shelters and from adoption drives.

And I'm guessing that 99% of them won't be microchipped because they're not microchipped from the start, but these adopters are the ones who might need Oyen the most with medical costs.

Kevin: That's right. Maybe one day we will even bundle it into our services and that will make it even better for them. And I think there are a lot of things that we can do in the future to really help this group of people. The real benefit here is to start accumulating data because data would help us to price the plans or to personalise the pricing for each type of dog or each type of cat accurately. And that's essentially what an insurance company does right? We have this large amount of data, we're able to synthesize it and also to not price discriminate. We don't want to charge a 10-year-old dog the same as a one-year-old dog who is healthy and young. Over time, with the right information or identifiers that are accurate, we're able to do more personalisation of the insurance plans.

Arvindh: Speaking of cost, let's talk about revenue for a bit for the company because Oyen is backed by MSIG. And you are the first digital pet insurance platform in Malaysia. So how does your revenue stream work? Where does Oyen's cut come from? 

Kevin: So, to clarify the relationship we have with MSIG. We're actually an authorised intermediary for MSIG to distribute and to promote this product. They are technically our principal underwriter. In terms of revenue, we basically take a cut off the insurance premium, I think is a very standard kind of agency model except we started off as a digital platform. So, we don't have any branches, we don't have any physical agents that are going around and talking to customers. Everything is via social media, via chat and online with us. 

In three years time, we want to insure about 36,000 pets in Malaysia. I don't think that amount is crazy because that's only about 3% of market share. But we do see that this space will grow. Technically we're not a first mover, but we're a first mover from a standpoint of an end-to-end digital experience. So, you can purchase the insurance online, you can ask us questions online, you can get your certificate of insurance directly through an email, and you can submit your claims online and finally get paid directly to your bank account for the approved claims. 

Personally, I've been in the insurance industry for quite a few years and I understand the pain of  customers trying to fill out forms, you know, multiple pages of forms when you need to submit a simple claim and I want to streamline that experience so that people can experience an insurance journey like they have never experienced before. 

Arvindh: I'm going to take a guess here and say that Oyen is more than just a business for you. Like it's slightly a passion project that turned into a business. Is that safe to say, because there's a picture of you and Jon Snow on your website. So, you're obviously someone who loves pets. So forgetting about like maybe the gaps in the market and like the business reasons and stuff. What is the personal reason behind Oyen that got you here?

Kevin: That's a great question and more to my personal experience. The few things that I love. Number one is having experience working in the tech industry for a while. Previously, I was from Airbnb and then subsequently worked with a few companies in the healthcare industry and realised that technology is a great enabler for businesses.

That's the number one motivation. Secondly, it's also my experience in insurance. My family business actually have been in the insurance industry for about close to 40 years so I grew up listening to everything they talk about at home about insurance and particularly in the general insurance space. I've seen how the industry has changed over the years and realised that there's a big gap where insurance companies are lagging behind in terms of innovation, especially with where all the digital banks are going, where all the digital insurance companies are going globally.

We're still trying to innovate at a very marginal level. What I really want is to combine, one, my passion for tech and for pets, and thirdly, also my passion for insurance and see what I can make out of it. Of course, it started out initially as a project, but insurance as a whole is a $5 trillion business. In Southeast Asia, it's about $110 billion. A fragment of that is a significant business for a player.

Over time, it is to marry the use of technology into this business model. Maybe we'll go beyond pets because guess what, who are these pet owners? They themselves will be homeowners. They themselves will be young adults going into their early thirties and going into new jobs.

And there is even more opportunity for us to embed insurance into their lifestyle so that insurance is not just an afterthought, it's something that they think about and they can manage their costs easily and seamlessly with a company like Oyen.

Arvindh: Do you foresee like competition popping up to play in this very niche playground of yours? Because once you create enough awareness and once people know that there is business in this space, you could also create your own competition in the market. They could pop up in time. So, do you foresee that happening?

Kevin: I actually welcome competition because if there is a competition or there are more players coming in, it actually helps raise the overall awareness. And technically speaking, we're not the first player doing pet insurance, we're just doing it in a different way. But where we are right now is we have the edge of being young, being agile and also understanding our consumers. 

I always believe in staying true to building customer experience. When I was at Airbnb, our CEO, Brian Chesky always talked about how it's better to get a hundred customers that really love you than a 10,000 that kind of likes you. So for us right now, if you are an early customer, we want to engage with you, to understand you, to get feedback from you, to build a community because the community is your moat, right? If you have a customer that is truly loyal to you, I think that makes a lot of difference. I think that's number one.

Secondly, what we are trying to do moving forward is to build a very close relationship with our vet partners. More from a standpoint of having them as a service provider to our customers. And we want to develop an ecosystem that will actually support the pet owners and also embed insurance in their experience. 

Meaning, just like human insurance, you have a medical panel. A medical panel is a way where we can sieve out high quality vets that provide good experience or maybe for specific illnesses and to just merge them into our insurance experience where in the future, it can just be a cashless payment. Like, imagine having a medical card for your pet, like, wouldn't that be super cute?

And you can walk into any vet that is under Oyen and don't have to pay a single cent. There are a lot more things where we can build to establish ourselves as a strong player. But if competitors come in, I think we're more than happy to see them in the market. I will only be taking 3% of market share in three years, that's 97% more up for grabs. I think all of us can really contribute to bringing and lifting the pet industry in Malaysia and helping even the region as a whole.

Arvindh: What kinds of challenges are you facing at the moment at Oyen?

Kevin: As a new company, what will start to happen soon is our customers will start filing for claims. Of course, we treat every claim very, very seriously. We want to make sure that we help them process their claims fast. We pay out legitimate claims or rather our insurance company, MSIG, would pay those claims, but we will facilitate that process.

But what we also need to have over time, is data. Currently we have very limited data about the vet costs in Malaysia. But I do see that as an opportunity because the more information we get  from our pet owners and all these vet clinics, the more we can establish, how much does this procedure actually costs?

Is it right for our customer to claim this amount? And also, maybe we can recommend them to a place where it might be more cost efficient to manage certain types of diseases. That's one thing where we will start to preempt and also start to gather more data, but being in the insurance industry for so long, I always believe that providing a good claim service is the most important for us so that we can feed the loop back up to having our customers give positive feedback about us that will eventually be word of mouth to bring in more customers. 

Arvindh: Okay. Just to wrap up. You are a very new venture, so I don't know if it's the right time to ask this, but are you looking at regional expansion plans because I'm not sure what the pet care culture is like in neighbouring countries. Is there space for Oyen there and what are your growth plans for the coming months, the coming years? 

Kevin: Yeah, definitely. At the moment, we are talking to a few seed investors to raise our funding to accelerate our growth because we see the pet space and the insurance space heating up in the next few years. And coming from Airbnb, I do have certain networks and experiences in building ventures fast and also grow fast.

Regional expansion is definitely the play. Malaysia is a good market but there are larger markets out there. I think when you go to countries like Indonesia, the pet numbers, it's just staggering. Of course the pet ownership is also significantly higher in some of these countries.

I think there is certain data that shows that the Philippines has something like 80-90% pet ownership. Indonesia also has about 60- 70%. And majority cats. Hopefully with the wordplay of Oyen because Oyen is also a familiar term in Indonesia, there are plenty of opportunities for us to look into other markets.

But right now we're very, very focused in Malaysia because why talk about regional expansion when you haven't gotten your home country right? The next one to one and a half years, we'll be very much focused in Malaysia to get to that growth number.

I think we are looking at potentially by the end of next year, maybe something like 10,000 pets or so for us to hit. We're super excited about that. And potentially looking into other segments as well for Malaysia. Maybe beyond pet insurance, we could look into home insurance which is also something that is relevant for our customers who may be renters or they own a home for the first time that they don't know how to ensure that place. These are just some of the plans, but going back to my point, the focus is to get every pet insured and growing with our current customers.

Arvindh: Awesome. This has been a very interesting chat. Kevin, thanks so much for your time. 

Kevin: Thank you so much Arvindh.