Introduction -Pet Insurance for Dogs and Cats Market Analysis
Hello, I’m Donal here to discuss the Pet Insurance for Dogs and Cats Market Analysis. This blog post will provide an in-depth Pet Insurance for Dogs and Cats Market Analysis, Future Demand, and Global Industry Forecast for 2030.
We’ll explore the factors fueling growth in this sector, expected future demand globally, and outlooks for major providers over the next 7+ years. There remains immense room for existing pet insurers and new entrants alike to capitalize on rising veterinary costs and increasing pet humanization.
Pet insurance has become an increasingly popular way for dog and cat owners to manage the costs of veterinary care. As veterinary medicine continues advancing, the costs of procedures, treatments, and medications continue rising.
Pet insurance helps owners budget for surprise illnesses or injuries so they don’t have to make difficult decisions about their pet’s care based on cost alone.
This blog post will analyze the current pet insurance market for dogs and cats, factors driving growth and demand, and provide a global industry forecast through 2030.
Overview of the Pet Insurance Market
The pet insurance industry has grown rapidly over the past decade, now valued at over US$ 9.53 billion globally as of 2023. North America represents the largest regional market, but Europe and Asia-Pacific are expected to see higher growth rates going forward.
Key Pet Insurance Providers
Some of the major providers in the pet insurance market include:
- Petplan UK: The largest pet insurer in the UK, now with over 300,000 pets insured. Petplan offers comprehensive accident and illness coverage, including hereditary and chronic conditions.
- Anicom Holding: The parent company of Japan’s largest pet insurer, Anicom, with over 480,000 pets insured. Offers accuracy-based and fixed-benefit accident and illness plans.
- Agria: Sweden’s largest pet insurer, owned by insurance giant Folksam and known for comprehensive accident and illness insurance that covers breeds often excluded by other providers.
- Royal & Sun Alliance (RSA): Long-standing UK insurer providing pet insurance since 1996. RSA covers dogs, cats, small mammals, birds, and reptiles.
- Nationwide: A well-known UK building society and insurer, Nationwide entered the pet insurance space in 2007. Now insures over 550,000 pets in the UK and Ireland.
These major players now compete with digital-first insurtechs looking to disrupt the market.
Factors Driving Market Growth
Several factors contribute to the rising demand for pet insurance:
- Increasing pet ownership rates: New pet acquisitions increased during the COVID-19 pandemic, driving greater interest in pet insurance to manage unexpected vet costs.
- Higher veterinary costs: As vet medicine advances, costs increase for surgical procedures, treatments, medications, etc. This motivates new pet insurance purchases.
- Greater emphasis on pet health: Pet owners increasingly view beloved companion animals as family members. More consumers see pet insurance as necessary for responsible, long-term pet care.
- Product innovation: Usage-based options like accident-only and wellness plans make pet insurance more affordable and appealing for younger, newer pet parents.
Let’s analyze some forecasted growth metrics for the global market.
Global Pet Insurance for Dogs and Cats Market Analysis Forecasts
Many analysts predict strong, sustained growth for the next decade-plus, but project some regional variances.
Market Value Projections
Grand View Research estimates the global pet insurance market will grow at a CAGR of 16.9% from 2022-2030, reaching a value of nearly $23 billion by 2030.
Europe has historically led the industry. But North America is expected to see faster growth rates over the next five to eight years before moderating.
- North America pet insurance market value: Projected to reach $9.53 billion by 2030, with a 2023-2030 CAGR of 17.4%.
- Europe pet insurance market value: Expected to hit $10.18 billion by 2030, growing at a CAGR of 14% during the forecast period.
The Asia-Pacific market currently represents under 9% of global share but will quickly gain ground.
- Asia-Pacific market value: Anticipated to grow at the highest CAGR of 23% from 2023-2030, hitting $4.5 billion by the end of the forecast period.
As more Asian countries advance economically, pet ownership rates and spending will rise. Insurers view countries like China, India, and Japan as major untapped markets.
Petplan UK continues working to expand its presence across Europe and Asia-Pacific through partnerships with local insurers. In 2021, the company partnered with Japanese telecom and insurance provider KDDI to launch a new pet insurance brand in Japan.
Pet Insurance Policy Projections
The North American Pet Health Insurance Association (NAPHIA) provides some of the best data on insured pets.
NAPHIA estimates the U.S. pet insurance sector alone will reach:
- Between 110 and 128 million insured pets by 2030.
- 20-28% of the total U.S. pet population insured over the next seven years.
Looking beyond U.S. borders, the North Europe Pet Insurance Analysis projects:
- 52 million insured pets across Sweden, Norway, Denmark, and the UK by 2030.
- 9 million insured cats across these countries.
- 43 million insured dogs.
Favorable demographic shifts underpin these estimates, which we’ll explore next.
Key Demographics Driving Pet Insurance Demand
Certain population segments show a greater propensity for purchasing pet insurance—a trend expected to continue.
Millennial Pet Owners
Pet ownership skews young, with the highest rates found among Millennial pet parents. Millennials also demonstrate a greater willingness to spend money on pets.
- Pet ownership rate for U.S. Millennials: 35% according to Packaged Facts, much higher than older generations
- Average annual spending on pets by Millennial owners: $1,285
Additionally, younger generations prioritize pet health and wellness more than their parents and grandparents did. They adopt pets at higher rates than prior cohorts.
With longer relationships ahead, Millennials see value in pet insurance for managing long-term costs and risks. Their sheer numbers also fuel overall market growth.
Anicom Holding actively targets younger Japanese pet owners through its Anicom pet insurance brand. The company’s “Pet Loving Society” website shares pet care tips and promotes insurance coverage to these demographics.
Households with 2+ pets also represent prime targets for pet insurers. Multi-pet households accounted for 55% of the policy growth for top insurer Agria in 2022-2023.
Owners insuring more than one pet can bundle multiple pets onto one policy at reduced rates in most markets. As households acquire additional pets, they gain peace of mind by covering their “pack” under one plan.
Growing Pet Adoptions
Record rates of shelter pet adoptions during COVID-19 also contributed to the surge in pet insurance interest. Many soon-to-be pet owners applied for policies when finalizing adoptions to be prepared for vet bills.
For example, leading U.S. insurer Pumpkin reported a 24% spike in shelter pet adoptions among their customer base in 2022 alone. Nationwide pet adoption increases will sustain long-term demand for insurance policies.
Royal & Sun Alliance (RSA) now partners directly with UK animal shelters and rescue organizations to promote adoption and pet insurance in tandem.
Key Conditions & Costs Driving Purchases
Specific health conditions and actual vet costs often directly spur pet owners to purchase insurance:
Accidents & Illnesses
Covering unexpected accidents or illnesses remains the top reason owners insure pets. Average annual vet costs now exceed $800 for dogs and $500 for cats. Serious issues can spiral exponentially higher.
Common, expensive conditions driving customers to purchase policies include:
- Cruciate ligament injuries in dogs
- Ingestion of foreign objects requiring surgery
- Cancer & chronic kidney disease in senior pets
- Treatment for diabetes, ear infections, skin problems & more
Petplan UK saw ingestion of foreign objects account for over 15,000 insurance claims in 2023. Cancer claims increased 9% year-over-year as detection and treatment improved.
Purebred dogs and cats also frequently suffer breed-specific disorders inherited genetically. These lifelong conditions become very costly over a pet’s lifespan.
- Brachycephalic syndrome in short-nosed dogs and cats
- Hip dysplasia in large breeds like Golden Retrievers
- Chronic allergies
- Heart disease
Anicom Holding now underwrites its policies based on veterinary hospital records proving pets are genetically prone to certain conditions. This reduces instances of fraud and helps set accurate premiums.
Veterinary Specialists & Advanced Treatment
Relatedly, the rising availability of veterinary specialists, emergency hospitals, cancer treatment centers, diagnostic tools, etc. facilitates more advanced—and expensive—medical interventions.
Policyholders tapping into these resources for their beloved pets fuels strong retention and loyalty rates for pet insurers. Once pet parents use insurance to fund expensive care, they gain a firsthand appreciation of its value.
Agria Cumberland reported average claim payouts of over $430 per customer in 2022. Top users had annual claims exceeding $4,000 for specialist and emergency vet services.
Outlook for Market Leaders Through 2030
Incumbent pet insurers and disruptive startups alike expect strong growth through the end of the decade. We’ll look at objectives from two category leaders.
Anicom Holdings’ Growth Plan
Japanese leader Anicom Holdings currently insures about 2% of the domestic pet population. The company outlined plans targeting 8-10% market penetration by 2030.
This involves increasing Anicom’s client base 8-10fold over the next eight years. Specific goals include:
- Surpass 5 million insured pets in Japan mid-decade
- Cover 10 million+ pets by 2030
- Retain over 80% of new clients for 2+ years
Fueling this growth involves strategic partnerships, improved underwriting, and geographic expansion beyond its dominant home market.
Petplan’s International Trajectory
Originating from the UK, Petplan now also ranks among the top pet insurers across Europe and Australia.
Over the next three to five years Petplan looks to:
- Maintain steady growth across existing Northern European markets
- Launch operations across Southern Europe
- Forge additional partnerships with Asian insurers to enter markets like Hong Kong, Singapore, and Korea
- Outpace overall industry growth rates in Australia
They will lean into their proprietary risk assessment protocols and high-touch customer service to stand out from local competitors.
Key Takeaways on Pet Insurance Industry Direction
Based on available data and analyst projections, we can expect:
- Strong double-digit CAGR globally through 2030, reaching $23 billion
- Possible temporary growth spurts followed by periods of moderation
- Increasing geographic diversification as Europe and North America mature
- Steady gains across the Asia Pacific region off smaller bases
- Underwriting practices growing more sophisticated with data and AI assistance
- Continued product innovation around wellness plans and preventative care
For incumbent pet insurance providers and hungry startups, ample growth runway remains over the next seven to ten years across both developed and emerging economies around the world.
The pet insurance industry stands poised for robust global growth through the end of the decade based on rising vet costs, higher pet ownership rates, increased spending, and other trends.
There remains ample room for both incumbent and emerging pet insurers to expand coverage and market share across regions.
Disclaimer: This blog post is intended for general informational purposes only. All forecasts and market projections reference third-party industry analyst predictions as of the time of writing in December 2023.
Individual company strategies may shift over time and cannot be guaranteed. Please conduct additional market research before making any financial commitments or investments.