Pet health insurance is exploding in popularity because of a strong economy, improved consumer awareness and easier claims processing, according to the market research firm Packaged Facts.
The Rockville, Maryland, firm’s new report projects that insurers writing policies in the United States will do $2 billion in business by 2022, nearly double 2017’s total.
“Consumers are increasingly aware of the available pet insurance plans in the U.S. marketplace,” said Packaged Facts research director David Sprinkle. “Through marketing efforts and consumer education by pet insurance companies and associations, consumers are learning the benefits that pet insurance can offer when a pet becomes ill or injured.”
The North American Pet Health Insurance Association, a trade group representing more than a dozen companies, counted about 1.83 million insured dogs and cats in the United States in 2017. NAPHIA declined to comment on the Packaged Facts report.
Packaged Facts cited a number of factors for what it forecasts will be 14 percent annual growth in receipts.
- Consumer awareness: “Increased accessibility to plans via veterinary and employer channels, as well as a growing base of pet policyholders recommending pet insurance by word of mouth, are supporting market gains.”
- Economy: “Pet owners, like other consumers, are feeling better about their own financial situations, and that leads to higher levels of discretionary spending. Pet insurance companies stand to benefit from these good feelings, as more consumers will be willing to invest in protecting their pets.”
- Technology: “Pet insurance companies are increasingly providing consumers with tools to enroll and use their policies via the internet and mobile devices. For instance, many companies now allow consumers to take a photo of their vet bill and upload it when submitting a claim via email or a web portal. Companies with mobile apps … make this process even more streamlined.”
- Medical fees: “Veterinary costs and pet health care expenditures continue to grow year over year. … Additionally, more pet owners view themselves as ‘pet parents’ and think of their pet as a member of the family, and thus are more likely to pay for the human-type treatments that are increasingly available. Therefore, veterinary bills can cause a significant financial burden on households if they do not have some sort of plan in place to assist them.”
- Competition: “Three new players have entered the U.S. market — Figo Pet Insurance, 4Paws Insurance and Toto Pet Insurance. … A growing number of companies means more marketing, more consumer education and more people working to get more pets insured.”
- Pet population: “The dog and cat population in the U.S. grew by nearly 20 million from 2007 to 2017, and Packaged Facts expects gains to continue through 2022. … As more pets and pet households accumulate in the U.S., pet insurance companies have more prospects to sell pet insurance policies.”
More information about the report, “Pet Insurance in North America, 6th Edition,” is available at http://bit.ly/2O5wbzU.