PET INSURANCE MARKET ANALYSIS

The global pet insurance market was valued at US$ 8.32 Bn in 2022 and is forecast to reach a value of US$ 26.44 Bn by 2030 at a CAGR of 15.6% between 2023 and 2030. The global pet insurance market is experiencing strong growth due to the growing pet population and increase in adoption of pet insurance around the world. Moreover, growing awareness regarding pet insurance and rise in prevalence of several diseases among pets is expected to boost the growth of the market. However, lack of standardized pet health codes for reimbursement and low adoption of pets in emerging countries is expected to hamper growth of the market.

Global Pet Insurance Market: Regional Insights

Based on geography, the global pet insurance market is segmented into North America, Latin America, Europe, Asia Pacific, and Middle East & Africa.

Among regions, North America is expected to gain highest share in the market during the forecast period owing to the increasing pet adoption and increase in awareness regarding veterinary health, and improving veterinary healthcare infrastructure in the region. For instance, with the increase in number of pet or increase in pet adoption, the demand or need for pet insurance is also increasing with a rapid pace. According to 2019-20 National Pet Owners Survey conducted by the American Pet Products Association, about 85 million American families (or 67%) own some kind of pet, up from 56% of U.S. households in 1988, the first year the survey was conducted.

Europe and Asia Pacific are also expected to witness significant growth in the global pet insurance market due to the rising pet ownership, growing adoption of pet insurance, and rise in awareness among people regarding veterinary health in these regions. For instance, according to the European Pet Food Industry Federation (FEDIAF), June 2022 report, more than 90 million households in the European Union own a pet. There are around 110 million cats, 90 million dogs, 50 million birds, 30 million small mammals, 15 million aquaria, and 10 million terraria, which resulted in over 20 billion EUR worth of related services and products.

Figure 1. Global Pet Insurance Market Share (%), by Region, 2023

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Global Pet Insurance Market Drivers:

Growing pet population to augment market growth

One of the key factors expected to augment the growth of the global pet insurance market over the forecast period is the growing pet population across the world. For instance, billions of households worldwide are unified by a common theme, pet ownership. According to the healthforanimals.org, more than half (50%) of the global population is estimated to have a pet at home. Worldwide, dogs are present in around one in three homes, and almost a quarter of pet owners have a cat. Families in the U.S., EU, and China alone have over half a billion dogs and cats. In the United States, 70% of households owned a pet as of 2021 compared to 68% in 2016.

Rise in adoption of pet insurance to underpin market growth

Another factor which is driving the growth of the global pet insurance market is the rise in adoption of pet insurance around the world. For instance, with the rise in pet adoption and rise in awareness among people about veterinary health, the adoption or demand for pet insurance is also increasing worldwide. According to the North American Pet Health Insurance Association (NAPHIA), about 3.9 million pets in the U.S. were insured by the end of 2021, a 28% increase since 2020. Total pet industry expenditures in the U.S. reached US$ 123.6 billion, 19% from US$ 103.6 billion in 2020. This in turn is driving the growth of the market.

Global Pet Insurance Market Opportunities:

Rising awareness regarding pet insurance is expected to provide significant growth opportunities for players in the global pet insurance market. For instance, pet insurance helps cover unexpected and expensive veterinary bills for various animals. Pet insurance also proves to be a boon for pets that may need to make use of additional healthcare facilities as they age. In January 2023, in a bid to boost awareness, PetSure announced the launch of a campaign for its innovative claims solution GapOnly, which enables pet owners with insurance policies to claim on the spot and only pay the gap fee. The campaign explores the different scenarios and mishaps that pet owners face.

Rise in prevalence of several diseases among pets, especially dogs, is expected to offer significant growth opportunities for players in the pet insurance market. For instance, cancer strikes dogs at a rate that is nearly identical to that of humans. According to the Veterinary Cancer Society, in June 2020, cancer was the leading cause of death in 47% of dogs globally, especially those over the age of 10. Even though cancer is a disease found in ageing animals, some families or breeds of dogs, have a higher incidence or tendency for developing cancer at a young age. This in turn is expected to increase the adoption of pet insurance across the world.

Global Pet Insurance Market Trends:

Increasing pet adoption is a recent trend

The population of dog and cat have increased over the years, as have the percentages of households owning dogs or cats, as per the American Veterinary Medical Association. The challenges brought on by the pandemic or the outbreak of COVID-19 has also increased the adoption or the number of pets worldwide. According to the Pet Food Manufacturers Association, as of 2021, around 3.2 million households in the U.K. acquired a pet since the start of the pandemic. This trend is expected to continue over the forecast period due to factors like pet humanization and the rapid adoption of pets in emerging economies.

Rise in focus on pet care is another trend

Pet care has made tremendous strides over the last few years worldwide. Increase in number of pet owners and growing pet population is also increasing the reported rates of pet diseases, such as the prevalence of cancer is increasing steadily across the world. For instance, osteosarcoma (the most common form of bone cancer) in dogs is increasing, which in turn is or has increased demand for pet insurance to cater to the financial burden pet owners have to face to get their pets treated. This trend is also expected to continue over the forecast period.

Global Pet Insurance Market Restraints:

Poor reimbursement to hinder growth of the market

One of the key factors expected to hamper growth of the global pet insurance market is the lack of standardized pet health codes for reimbursement. For instance, the efforts to standardize pet health codes for reimbursement are currently lacking in the pet insurance industry. Lack of a standardized pet health code remains a stumbling block globally while pet insurance has grown over the years. Centers for Medicare & Medicaid Services (CMS) and CPT codes exist for procedures, but some carriers may not recognize or reimburse for the codes for billing in pet insurance.

Low adoption in emerging countries to hamper market growth

Another factor which is hampering growth of the global pet insurance market is the low adoption of pets in emerging countries. For instance, the developing countries usually have a low rate of pet adoption due to less per capita income, lack of awareness regarding pet adoption, and high cost of veterinary healthcare, which makes it less affordable for the population to adopt pets in the middle and low-income countries. The cost of veterinary services is also high the middle and low-income countries. This in turn is restraining the growth of the market.

Figure 2. Global Pet Insurance Market Share (%), by Policy, 2023

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Global Pet Insurance Market Segmentation:

The global pet insurance market report is segmented into Policy, Animal, Provider, and Geography.

Based on Policy, the market is segmented into Illnesses and Accidents, Chronic Conditions, and Other Policies. Out of which, Illnesses and Accidents Segment is expected to dominate the pet insurance market over the forecast period and this is attributed to the increase in awareness about pet insurance. Accident/illness policies are most commonly offered by pet insurance companies.

Chronic Conditions Segment is also expected to witness significant growth in the near future and this is owing to the increase in incidence of chronic disease. Insurance policies provide coverage for various conditions such as acute and chronic diseases.

Based on Animal, the market is segmented into Dogs, Cats, and Other Animals. Of which, Dogs Segment is expected to dominate the market over the forecast period and this is attributed to the increase in burden of cancer in dogs.

Cats Segment is also expected to witness significant growth in the near future and this is owing to the increase in adoption of cats worldwide.

Based on Provider, the market is segmented into Public and Private. Of which, Private Segment is expected to dominate the market over the forecast period and this is attributed to the increase in adoption of pet insurance due to increase in awareness about pet insurance.

Global Pet Insurance Market: Key Developments

In November 2021, AXIS Capital Holdings Limited’s specialty insurance business segment- AXIS Insurance, entered the market by partnering with Managing General Underwriter Petplan. The company partnered with Petplan via its Accident and Health unit and this strategic collaboration supported its growth objectives.

In July 2021, MetLife launched a pet insurance product that covers treatment expenses for pets grappling with accidents or illnesses, which often produces financial stress for pet parents.

In May 2021, Petco Health and Wellness Company Inc. announced the launch of Together Strong, a pet cancer awareness campaign that brings two and four-legged survivors together to highlight how routine preventative care is as vital for pets as it is for humans in the fight against cancer.

In April 2021, PTZ Insurance Agency and Home Again teamed up to provide pet health insurance to pet parents under Pets Plus Us brand. The partnership leverages both organizations' strengths, and furthers their shared vision of responsible pet ownership and animal welfare focused on pet health and safety in the United States, Canada, and the United Kingdom.

In April 2021, Petline Insurance Company and Armour Insurance announced the launch of a new pet health insurance product, Pet Shield Insurance.

Global Pet Insurance Market: Key Companies Insights

The global pet insurance market is highly competitive. This is attributed to the rise in adoption of pet insurance across the world, as a result, players in the market are focusing on launching novel products in the market to meet increasing demand.

Some of the key players in the global pet insurance market are Medibank Private Limited, Petplan, Oneplan Insurance, Dotsure.co.za (Hollard), Healthy Paws Pet Insurance LLC, Figo Pet Insurance LLC, Embrace Pet Insurance Agency LLC, Anicom Holdings Inc., Oriental Insurance Company Ltd., MetLife Services and Solutions LLC (PetFirst Healthcare LLC), and Crum & Forster Pet Insurance Group (Hartville Pet Insurance Group), among others.

*Definition: Pet insurance is a form of insurance that is often overlooked by pet owners. It is a healthcare policy for a pet that will provide reimbursement for specific health expenses that are covered by the policy. It is a form of insurance that pays, partly or in total, for veterinary treatment of the insured person's ill or injured pet.

Pet insurance is a form of insurance that pays, partly or in total, for veterinary treatment of the insured person's ill or injured pet.