U.S. pet insurance market to double by 2022, according to market research
The pet insurance market is forecast to grow over 14% per year.
Market research firm Packaged Facts forecasts that the U.S. pet health insurance industry, estimated at slightly over $1 billion in 2017, will nearly double to reach $2 billion by 2022.
The pet insurance market will grow over 14% per year, supported by a number of trends in both this emerging market and competitive ones, according to company experts. Most notably, increased consumer awareness will be crucial to growth.
Growing consumer awareness of pet insurance
“Consumers are increasingly aware of the available pet insurance plans in the U.S. marketplace. 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,” says David Sprinkle, research director for Packaged Facts. “For example, pet insurance companies use social media and their websites to grow consumer awareness of their offerings by sharing information on pet health, dog and cat breeds, and how pet insurance works. As market penetration remains low, these efforts are crucial to continued growth in the number of policies in force.”
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Yet simply growing consumer awareness of pet insurance and its benefits is but one important growth trend Packaged Facts identifies in the report. Here are five other essential trends that will help the U.S. pet insurance market reach its full potential by 2022 and beyond:
1. Augmenting distribution channels.
Most players in the pet insurance industry emphasize partnerships with entities in the various channels of distribution, including veterinarians, employers, and animal shelters and breeders. For instance, improving the veterinary channel will potentially allow pet owners to gain exposure to pet insurance before being faced with a high-cost procedure.
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Improving the employer channel allows increased exposure to plans and possible benefits like group discounts. Overall, augmenting the avenues of contact between consumers and pet insurance, beyond the internet or direct-to-consumer realm, will be critical to increasing consumer education and the number of policies in force.
2. Changing consumer perceptions and increasing transparency regarding coverage.
Data have shown that many consumers opt out of pet insurance because they do not think it is necessary or it costs too much. Increased efforts to educate the public on pet insurance plans and veterinary costs should help to shift these opinions. Additionally, some consumers cancel coverage because a claim was denied.
Whether the claim was denied because it was an excluded veterinary service or considered a pre-existing condition, increasing transparency of covered veterinary services and efforts to enroll pets at a younger age will help avoid some cancellations. Overall, these efforts will increase consumer satisfaction and improve retention of policy holders.
3. Partnering with competing payment options.
There are plenty of other pet health financing options out there — e.g., pet credit cards and pet care savings plans — and differentiating pet insurance from those alternatives is paramount when converting new clients. Partnering with other payment options and explaining how they could work in tandem — e.g., using a specialty credit card to make costs not covered by insurance more affordable — presents opportunities for adding new policy holders.
4. Efficiency improvements.
Pet insurers should continue to make strides with the technology that consumers use to submit claims and work with their policy. Further innovations of software and mobile apps to streamline pet insurance interactions will help retain clients going forward.
Additionally, efforts to standardize pet health codes, which are currently lacking in the industry, will make claims processing easier, help insurance companies communicate what is covered, and improve pre-authorization of procedures.
5. Expansion of exotic pet insurance.
Though participation is limited in the U.S., there are opportunities to expand the industry to exotic pets, or pets other than cats or dogs, as in other countries with a pet insurance industry. This leaves open an opportunity for other pet insurance companies to step in and help defray the costs associated with non-mainstream animals, particularly long-lived animals and/or those that are expensive to purchase (e.g., tropical birds, competition rabbits, certain reptiles).
More about the report
Pet Insurance in the U.S., 6th Edition examines the U.S. market for pet health insurance. This report provides both historical (2007-2017) and projected market size (2022) in gross written premiums and policies in force, reflecting insurance plans for cats and dogs. The report provides analysis of the factors affecting the market and growth opportunities going forward. The report provides pet population estimates and forecasts as well as demographic analysis of pet owners.
Pet Insurance in the U.S., 6th Edition also analyzes the competitive environment for pet insurance, including profiles and market share for all the players in the industry. Analysis of alternative pet health financing, like pet credit cards and pet savings accounts, is also provided.
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