It's like the '50s all over again. Thanks to the recovery, every American can once again aspire to own a home, a new car and a Labrador retriever, digging in the yard and hanging out the car window.
Well, maybe a Labradoodle. Or a pet skunk. Or four spayed and neutered cats, declawed of course. Because it's not the '50s, and things have definitely changed in the pet world. One huge difference: Today, we can go out and get pet insurance to cover the cost of our passion for pets.
Pet insurance is big money these days and, according to IBISWorld, it's only going to get bigger.
In a 35-page report on the pet insurance market, the market research firm says the industry's future is bright, forecasting a 12.6% revenue increase in 2015 over 2014.
Key factors driving this trend, which has been evolving for five years, are increasing prices charged by veterinarians, the increasing incidence of pet owners seeking medical treatment for pets, increased home ownership by Americans and, in tandem with that, a growing number of pets in the U.S.
Among the key findings:
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U.S. pet insurance is poised for growth based on the experience of other nations. Here, only 1% of domestic pets are covered. In the U.K, 23% of pets are covered by insurance and in Sweden, 30% are insured.
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Between 2015 and 2020, industry revenue is forecast to increase at an annualized rate of 6.8%, driving annual sales to $1 billion.
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The risks and trends of pet insurance more closely parallel those of health insurance than those of property/casualty, the category that includes pet insurance.
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The sheer number of domestic pets will increase at an annualized rate of 2.1%, largely driven by increasing home ownership rates.
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Market share concentration will occur as the industry matures and large players dominate sales.
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Dan Cook
Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.
