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Head of Equine & Livestock/Bloodstock, AXA XL

Protecting one’s investment is a big deal to horse owners and breeders. How equine life insurance can help.

Getting some athletes to the 2021 Olympic Games in Tokyo requires more than booking a flight. When the athlete is a show horse, that flight is a bit more complex. Just getting them to the race requires plenty of logistics: Destination regulations, transport costs, quarantining requirements, vaccinations.

Horses running in the Triple Crown events in the US also have similar requirements. Chartered planes designed for horse transport get the horse to the race, but owners and trainers must monitor the food and water intake so that the horse does not overeat or drink too quickly. Once at its destination, the horse must be acclimated to its new surroundings before any event. Throughout it all, the health of the animal is of paramount concern.

So too is the life of the horse which, in many cases, represents a significant financial investment from its owners. From the Emirates to Australia to Argentina and points beyond, equine competitions mean horses need to make it from one location to another safely. Yet such costly trips --- transport totals can range from $2,000 to $10,000 for each one-way flight per horse -- can be fraught with risks for the animal. Motion sickness, diseases contracted from other horses, and injuries can result in the death of the horse.

Such a loss of a thoroughbred race horse or show horse can be devastating. Not only is it a loss of the animal, but also loss of purchase price and earnings potential from breeding or performing. It could also entail lost income due to transportation costs.

Fortunately, equine mortality insurance can help owners recover some of their investment in the event of the horse’s death. Yet how does an underwriting team place a monetary value on a horse?

What’s my horse worth?
By starting at the time of purchase. Typically with race horses, owners purchase a yearling, then will buy insurance to cover that purchase. As a horse’s value does change from yearling age to racing age, underwriters will review the horse’s training and racing status along with its health.

Underwriters calculate the purchase price and, for race horses, estimate the horse’s earnings potential from racing and from breeding. Once a horse wins a big competition, such as the Kentucky Derby, his value increases significantly due to the future breeding potential.

In fact, race horses are valuable long after their racing days, which are typically until the horse reaches age four or five for highly successful racing colts. Breeding value can last another 10 to 15 years. For show horses, the value is determined by the horse’s rankings and points earned on the show circuit.

Even horses purchased merely for pleasure can be insured. At AXA XL, half of the horses we insure do not race or compete. The average horse is covered for life-ending injuries just as thoroughbreds would be.

At AXA XL, half of the horses we insure do not race or compete. The average horse is covered for life-ending injuries just as thoroughbreds would be.

Equine Mortality Insurance
That underwriting process occurs every year. No matter what horse you are insuring, equine mortality insurance is a term policy and must be renewed annually. Horses undergo health exams annually, and owners must inform underwriters of pre-existing conditions. Horses over a certain value are required to have a veterinary examination.

That examination is important to place proper coverage in place at the right rate. In reevaluating a horse, we look for changes in the horse’s earnings potential, but also in their health. A minor injury may require an adjustment downward in the horse’s value or an exclusion on the policy for that specific injury. Also, the value of a horse could be drastically reduced should an injury bar them from performing.

Depending on the value placed on the horse, the mortality insurance policy will vary in coverage and price. We write policies that start at or below $5,000 in coverage, and owners can purchase a major medical endorsement for life-saving procedures. For race horses, coverage can be purchased up to $5 million, though only a more limited surgical endorsement is available beyond the standard mortality coverage.

That coverage extends to horses being transported for any reason, including for breeding purposes. Any number of stallions are currently shipped from the United States to countries such as Australia or Argentina. The equine mortality insurance covers any life-ending event that occurs during the breeding process.

While the insurance itself does not cover specifics such as transportation costs or loss of income potential, those factors are considered when determining the coverage level for any one horse. Should a horse perish, the policy pays out at the agreed value, which has already factored in these costs.

Reining in exposures
From commercial breeding operations to private small breeders producing thoroughbreds, equine mortality insurance helps protect the investment from pleasure horses to show and race horses. With horses being transported to every corner of the world to their successes increasing their value, equine insurance is a smart, safe bet.

Protecting the sizable investment many owners and breeders have made, and even protecting the investment made by a private owner on a noncompetitive horse is easier to do with mortality insurance. Term mortality insurance for horses is a great solution to helping overcome the financial impact of any untimely loss.


About the Author
Eric Conklin is the Underwriting Manager for AXA XL’s Equine & Livestock team in the Americas where he works with a team of underwriters serving the clients in the thoroughbred, sport horse, quarter horse and livestock industries. He has worked as an Equine and Livestock underwriter for AXA XL since 2013 in the Lexington, KY location. Prior to joining AXA XL he was an Underwriting Manager with The Hartford. He received is Bachelor of Science degree in Agriculture from The Ohio State University.

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In the US, the AXA XL insurance companies are: AXA Insurance Company, Catlin Insurance Company, Inc., Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Specialty Insurance Company and T.H.E. Insurance Company. In Canada, coverages are underwritten by XL Specialty Insurance Company - Canadian Branch and AXA Insurance Company - Canadian branch. Coverages may also be underwritten by Lloyd’s Syndicate #2003. Coverages underwritten by Lloyd’s Syndicate #2003 are placed on behalf of the member of Syndicate #2003 by Catlin Canada Inc. Lloyd’s ratings are independent of AXA XL.
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