TEACHING & LEARNING
A lawyer and physicist
turned Wharton student find common ground in mentoring relationship
OUTREACH
More
Than a Pet Project
Plus: Follow up on 2002 WBP Competition winner
Plus: Learn more about the Grand Prize winning team, PAWS
Building Entrepreneurial Businesses
Faces of Wharton Entrepreneurship
RESEARCH
Venture Capital Syndication
Pays off — and not just for the VC
Newer Web Companies Aim to Change Consumer Buying Habits
Outreach
The Truth about Cats and Dogs: They're
Costly
Anorexic Kitty Prompts Plan to Rake in Premiums by Insuring Pets.
Granted, the English have a reputation for being passionate about their pets. Which may explain why three British Wharton MBAs are willing to forsake the siren song of Wall Street (read: signing bonuses) to try to start a pet insurance company.
Chris Ashton is a former military officer; before school, he was an infantry troop commander in the Royal Marine Commandoes. He and Natasha Ashton met at Oxford University and are now married. Laura Bennett is an actuary who lived in England till she was 16, then moved to Canada. (She's a dual citizen.) Natasha Ashton noticed Bennett's British accent during a class and came up an introduced herself afterwards. Their fourth partner, Alex Krooglik, is Australian and, like the others, just earned his Wharton MBA.
Their pets aren't yappy Yorkshire terriers or Shetland
sheepdogs. The
Ashtons have one cat, Bodey. Bennett and her husband, John Burchard,
who
also just graduated from Wharton, have two felines, Simon and Barnes.
Krooglik owns
a border collie named Buddy.
The group's proposed company, which they're calling PAWS untill they find a name they like better, won the Grand Prize as a finalist in this year's Wharton Business Plan Competition, which culminated with the annual Venture Fair on April 28. The group was also accepted into the Venture Initiation Program, an educational initiative of Wharton Entrepreneurial Programs in which businesses started by University of Pennsylvania students are provided learning opportunities, support and guidance.
Even before their Venture Fair success — the winner gets $20,000 — the team was committed to pursuing funding of their company upon when they graduate this spring.
Their first task is persuading an insurance company to hire their firm as its underwriting manager. An underwriting manager designs, markets and services policies, while the insurer assumes the underlying risk and ponies up the money for claims.
They think that will take a month or two, and then they'll start trolling for investors. "We need to get a small amount of seed money to get everything in place to start selling policies," Chris says.
Assuming they succeed, they'll begin by selling policies for cats and dogs. They figure people are willing to spend more on cuddly companions than, say, guppies and goldfish. Scaly, impersonal piscine pets tend to encourage ruthless practicality: "With a goldfish, you just flush it down the drain," Bennett says.
Initially, they'll limit their policies to pets that are less than 9 years old. They won't charge different premiums for different breeds, though they will charge more for pedigreed pets. Animals with pedigrees not only cost more but also tend to have costlier health problems.
Pet insurance is popular in England but much less so here despite otherwise similar spending on pets by Brits and Americans. "Over 10 percent of pets are insured in the U.K.," Natasha says. "Here, it's less than 1 percent."
Why the difference? "It's a combination of things," Chris says, "Poor behavior by U.S. insurers — not paying claims promptly — poor marketing and poor product offerings."
Last year, the Ashtons learned first-hand how useful the policies can be when Bodey mysteriously stopped eating. "She went anorexic," Chris says. The resulting treatments at Penn's veterinary school ended up costing about $5,000. "We decided then that we needed pet insurance," he adds. But shopping around showed them that the offerings here weren't as good as those in England.
By one measure at least — their single-minded focus — the founders of PAWS are already well prepared for entrepreneurship. They've taken as many classes as possible on entrepreneurship. And they've used papers and projects in their classes to research parts of their business plan.
They also talk up their idea up to anyone they can, especially classmates. "When they see us coming, some of them will walk in the opposite direction because they know they're going to start talking about pet insurance," Chris quips.
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