Awareness spurs growth in pet insurance industry
Americans are projected to spend $60 billion on their pets this year — and a quarter of that will go toward veterinary care. As the bills for Fido continue to increase, so too does the pet insurance industry. Today, there are more sophisticated treatments and more people know about pet insurance, which has led to double-digit increases in this space.
“The pet insurance industry is growing. So is awareness of pet insurance as a product,” says JoAnne Novak, AVP, new business development at Hartville Pet Insurance, which has been in the pet insurance business since 1997. There’s been annual growth of nearly 11% in the past five years, according to IBISWorld.
“We’re seeing strong, stable, year-over-year growth,” says Dennis Rushovich, president of the North American Pet Health Insurance Association. “It’s proof-positive that pet health insurance is something people want and need.”
Last year, $15 billion was spent on veterinary bills out of the $58 billion in total pet expenditures, according to the American Pet Products Association. Inquiries about the product are coming from both consumers and veterinarians, Novak says, as wells from employers and brokers. Often times, it’s the employees who ask their employers to offer the service, she says.
Historically, pet insurance had been marketed as a direct-to-consumer product, Novak says. Now it’s being offered more and more as a voluntary benefit through employers. For brokers looking to sell pet insurance, they need to have a property/casualty license, something Novak recommends. “It just rounds them out,” she says.
Easy to implement
Implementing a policy is easy and attractive for employers, Novak says. There isn’t a minimum participation required, no cost to the employer to make it available, employees can enroll online and payment can be done via direct billing or a payroll deduction.
While there is flexibility, an average well-rounded plan is about $425 a year, Novak says. Premiums are based on a variety of factors such as the type of pet, age and location. “It really is based on the underwriting,” she says.
Pet insurance is another benefit that can be used to recruit and retain talent, Novak says, but it also serves another purpose — employee wellness. A sick pet can cause not only financial stress but also emotion stress for an employee. “Pets are considered part of the family,” she says. Offering this benefit helps ease the financial burden and shows employees that their employer cares about their pet family, Novak says.
The recent growth is a trend that should keep going as the pet insurance industry pushes to increase awareness, Novak says. “It continues to grow in popularity,” she says.
The addition of new procedures and specialists — such as orthopedic, ophthalmology and dentistry — will also help the industry make gains, Novak says. “This product will increase in importance and participation,” she says.