Pet Insurance On the Rise
North American pet insurance gross written premiums was expected to reach $618 million by the of last year, up 15 percent from $539 million in 2012, according to a recently released report by Packaged Facts.
“While pet insurance has a history in North America that extends back more than 30 years, the market has only been really gaining traction in the last few,” George Puro, president of Puro Research Group and author of Packaged Facts’ October 2013 report “Pet Insurance in North America, 5th Edition.,” said. “North America still lags far behind European countries such as the U.K. and Sweden in pet insurance penetration. But things have been perking up. The North American market has doubled since 2008, with sales hitting $618 million in 2013. We expect it to be just shy of a billion annually by 2018.”
The United States accounted for $536 million of the segment’s total in 2013, with Canada comprising the remainder. Both markets posted growth over the previous year, with sales increasing 16 percent in the U.S. and 9 percent in Canada. Veterinary Pet Insurance, based on its commanding presence in the U.S., claims the largest share of the North American market, at 41 percent of gross written premiums.
“Both old and new companies are finding ways to drive growth,” Puro said. “Some of the main factors include: Several companies that started in the last decade are making some real inroads, such as Petplan and Trupanion. A number of companies have made a concerted effort to raise awareness by investing in TV advertising, including Protect Your Bubble, Petsecure and others.
“Three new companies have entered the market in the last two years alone, and Walmart has dipped its toes into the market in Canada, in partnership with Western Financial. Hartville and Embrace were acquired in 2013, a signal that outside investors feel the industry has room to grow. The voluntary benefits channel has increasingly been a focus of pet insurance providers, with VPI leading the way.”
Pet insurance penetration in the United States remains at less than 2 percent of pet owners, compared with rates as high as 25 percent in the U.K. and 50 percent in Sweden. Even so, the level of competitive activity is at an all-time high, and partnerships and a strengthening of the various sales channels will help the North American pet insurance industry to continue to expand.