Pet health insurance: how (and why) to cater to millennials


Millennials are one of the largest driving forces behind pet health insurance growth.

young woman kissing bulldog puppy

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No longer a niche, specialty product, pet health insurance is fast becoming a ubiquitous tool valued by pet owners around the world. In fact, the global pet health insurance market is expected to surpass $10 billion by 2025, with European pet owners leading the charge. In North America, the combined gross written premiums of the United States and Canada were $1.42 billion in 2018 (up from $1.15 billion in 2017) and the total number of insured pets reached 2.48 million (a 17% year-over-year increase), according to the North American Pet Health Insurance Association.

Some businesses have caught on to the pet health insurance trend, offering it as part of their employee benefit packages. While this practice has largely been reserved for savvy startups and large corporations with ample resources, the number of businesses offering this benefit is growing. Today, more than 6000 business—and nearly half of all Fortune 500 companies—offer the perk.

What’s fueling the growth?

There are three primary reasons why the pet health insurance industry is booming. The first is that, like people, pets are living longer today thanks to continued advances in medicine and increased attention on healthy practices, resulting in higher lifetime veterinary care costs. Many pet owners turn to insurance products to more affordably cover the routine and preventive care costs pets may require throughout their lives.

Healthy vendor competition is the second factor. Today more than 12 pet health insurance brands are marketed across North America, with many of those also marketing or underwriting multiple white-label or co-branded products. Consumers have easy access to pet health information and educational insurance resources, which empowers them to find a desirable plan.

The third—and by far the largest—factor driving the pet health insurance industry is millennials, who own roughly 35% of the approximately 184 million pet dogs and cats in the United States. What’s more, a 2016 IDEXX study found that 61% of millennials are willing to make financial trade-offs to afford care for their pets, compared with 57% of generation Xers and 50% of baby boomers. Only 13% of millennials said they wouldn’t make any trade-offs to pay for their pets’ needs.

Targeting the motivated millennial market

The millennial generation’s tendencies have contributed significantly to the growth of the pet health insurance industry, and they also present a timely opportunity for veterinarians. If veterinary practices can better cater to the massive and motivated millennial market, they stand to benefit both financially and professionally.

Embrace millennials’ affinity for technology, for instance, by offering online scheduling and appointment reminders, or perhaps even telemedicine solutions. Provide digital, data-driven pet health insurance comparison tools so millennials can learn about their pet’s unique health characteristics and find the best coverage options without having to sift through dozens of potentially conflicting, paper-based brochures.

Perhaps most importantly, recognize millennials’ steadfast commitment to their pets. To many, they’re more than just the family dog or cat—pets are increasingly seen as equal individuals (i.e. sons, daughters and best friends). By supporting this demographic’s unique characteristics, particularly their interest in a more proactive approach to health and wellness, veterinarians gain the opportunity to see their patients more often, enhance patient care and grow practice revenue.

Mr. Mawhinney is cofounder and CEO of Pawlicy Advisor.

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