Pet Insurance Market Projected to Reach $2 Billion
Amanda Carrozza is a freelance writer and editor in New Jersey.
The pet insurance market in the United States is expected to nearly double by 2022 and these 5 trends are leading the way.
The US pet health insurance industry is poised to experience robust gains. This is according to the market research firm Packaged Facts, which recently released a report that forecasts that the industry—estimated at slightly over $1 billion in 2017—will reach $2 billion by 2022. This equates to growth of more than 14% per year.
"Consumers are increasingly aware of the available pet insurance plans in the US marketplace,” said David Sprinkle, research director for Packaged Facts. “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.”
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Consumer awareness, however, is not the sole reason for the industry’s potential growth. According to the Packaged Facts report, there are 5 identifiable trends that will propel the pet insurance market in the coming years.
Augmenting Distribution Channels
Pet insurance providers rely on partnerships forged with veterinarians, employers, animal shelters, breeders, and other related channels of distribution to grow their businesses. For example, building upon partnerships with veterinary hospitals increases the likelihood that pet owners will be exposed to the possibility of pet insurance before being faced with a high-cost veterinary procedure. Overall, the report points out, strengthening the avenues of contact between consumers and pet insurance providers beyond just internet marketing will be critical to increasing the number of insurance policies.
Changing Consumer Perception
According to the data collected for the report, pet owners opt out of insurance for their animals because they believe it costs too much or find it unnecessary. To combat this, the research firm believes increased efforts to educate the public on pet insurance plans and veterinary costs would help reverse these opinions.
Similarly, pet owners cancel their plans following an insurance claim that was denied. With increased transparency of what services are covered through insurance, it is estimated that the number of cancellations would decline.
Increased availability of pet insurance software and mobile apps to streamline interactions between pet owners and insurance providers is projected to help retain clients over the next few years. One particular tech-related area that is currently lacking is an effort to standardize pet health codes. Instituting a universal system will make claims processing easier and improve pre-authorization of procedures, both of which translate to higher satisfaction rates for veterinary staff and pet owners.
Expansion of Pet Insurance for Exotics
The opportunity to expand pet insurance coverage to include exotic pets would positively impact the industry’s growth. This has already been done in other countries where pet insurance is provided and would help minimize the costs associated with non-mainstream animals that have long lifespans or are expensive to purchase, including tropical birds and certain reptiles.
Partnering With Competing Payment Options
When acquiring new clients, the report stresses the importance of making sure consumers know the difference between pet insurance and other payment options, such as veterinary-specific credit cards and pet care savings plans. Creating partnerships with some of the other available payment options, and explaining to consumers how they could work in tandem, presents opportunities for adding additional policyholders.
Beyond these 5 actionable items that pet insurance providers can institute, the report also points to the value placed on pets as family members and growing veterinary costs as additional outside factors that will contribute to the industry nearly doubling in value by 2022.