Pet insurance is expensive — but it doesn’t need to be.
At least that’s the thinking behind Eusoh, a pet-insurance startup that pools pet owners and vets to lower insurance premiums. The company raised $2 million back in June and is apparently doing well. We spoke with Dr. Allen Kamrava, still a board-
1. You have your own interesting background. Share that?
I was born and raised in Los Angeles in a family with a long tradition of practicing in healthcare. I have over a dozen first-cousins, literally all of whom are healthcare practitioners. That isn’t to say medicine was forced upon me, instead, it was the only thing ever really discussed. Our family lens was uniquely myopic. I was aware of my limited worldview during my upbringing, so in high school, I began working in the business world after school and during summer breaks. This path continued through college, and eventually, I completed a dual-degree Medical School and Business School program.
I’ve always kept myself active in both disciplines. As I had written in my personal statement for my business school application, a scalpel must first exist for a surgeon to save lives. That is to say, there is an entire production line involved with “saving” lives, but physicians pat themselves on the back and take all the credit. The truth is that physicians are only as capable as the myriad of tools at their disposal.
When I moved into my own practice, it puzzled me that even in one of the most affluent cities in the country, numerous people would regularly come as patients who were uninsured due to affordability or plainly having rejected insurance due to complexity and distrust.
I was committed to figuring out how we could use modern technology to introduce a more affordable and straightforward system. Eusoh took years of planning, as the aspects that make Eusoh work are far more complex than merely the financial model that sets its backbone.
2. What’s behind the name?
In biology, the term Eusociality is used to define the highest level of social organization. A main feature of eusociality is cooperative brood care, as in how ants care for their Queen and each other. This closely represents Eusoh and the idea that if we organize ourselves correctly, we can very easily care for one another while making it more affordable and straightforward for everyone.
I know it’s a bit of a “hard” name at first, but really, once you get it – YOU-So, it’s not that hard, and it fits our ethos so well.
3. Why take a community-based approach to insurance?
Insurance is the first societal example of crowdfunding on a substantial consumer basis. I always point out this distinction because people forget this. The vast fund of money that insurers control is “crowdfunded” via premiums we all pay.
One of the issues at hand was what we call a “promise-to-pay.” Local religious groups could come together and commit to all share costs with each other if something happened. But, what happens when somebody actually gets ill in this system? A poor administrator gets stuck calling each and every member, reminding them of their commitment, and at best, only half of the members actually pay. It’s a logistical nightmare.
And so insurance companies came about. They collect and blend money from all walks of life in a standardized pool and hold it captive to provide every paying member a “promise-to-pay.” The problem is that their revenue stream is linked to this large fund of money. The larger it is at the end of the year, the better their shareholders fare. Consequently, it has created a system where the insurance companies have every incentive to complicate the system, allowing premiums to increase while reimbursements go down – the exact opposite of what their members desire.
Mobile technology and advances in peer-to-peer payment technologies have lifted these limits. We can now have groups grow virtually around any association, not just religious ones, and can grow to an infinite size. We can guarantee payments between members without the need for an administrator or the chasing of money – everything is built right in.
Suddenly, the need to hold money captive in a large fund has vanished. Now, people can provide a “promise” to help each other without a fund at all. It’s time for a new model … Eusoh.
4. Any particular data or numbers you can share?
Willis Re, the 3rd largest reinsurance company in the world, ran complex financial simulations utilizing our model, and it demonstrated that, at the very minimum, users can expect to save 20% on a year-to-year basis when compared to traditional insurance models. Moreover, they concluded that the savings are likely to be far higher because our revenue is not linked to our users’ monthly expenses. Our system is fully incentivized to make month-to-month costs as low as possible overall. How much so? It’s difficult to calculate the exact amount users will save, as there is no prior in-kind model to compare to, but estimates of at least 30-40% have been discussed frequently.
5. What technologies do you use?
The core behind Eusoh is our validated financial model as well as our extensive behavioral model. Combined together, they create our ecosystem of transparency and affordability.