It's so hard to find a good pet insurance salesman.

Strong Growth Pet-ential

The pet insurance market is a rapidly emerging market, with spending estimated at $450m in 2011, according to a recent articlein Stl Today. In fact, a new study by Packaged Facts indicates that sales of pet insurance policies are actually growing faster than the sales of veterinary services. Following a jump of 27 percent from 2007 to 2008, pet insurance sales rose 16 percent from 2008 to 2009, according to Packaged Facts. Sales of veterinary services rose 10 percent during the same year.

Pet insurance revenue in North America totaled $354 million in 2009, up from $310 million in 2008, according to a Packaged Facts estimate.  The growth is not expected to end, estimates Packaged Facts, which says pet insurance sales in the United States could climb toward $760 million by 2014.

According to APPA (American Pet Product Association), the number of US households that own pets has steadily increased to an all-time high of 72.9 million in 2011/2012.  APPA also projects that pet owners are going to spend up to $12.2 billion dollars for veterinary care in 2012.

Pet health insurance has been available in the United States for nearly 30 years, but expanded veterinary treatments and changing attitudes toward the family pet have bolstered the number of policies over the last decade, even during the economic downturn. Three percent of the nation’s 78 million dogs and 1 percent of its 93 million cats are now covered, according to a recent American Pet Products Association estimate. That’s up from 1 percent of dogs and virtually no cats covered in 1998.

What’s the potential for this market? Pet insurance has gained wide acceptance in some European countries, such as the United Kingdom, where 20 percent of pets have policies, and Sweden, where at least 30 percent of pets are covered, according to New York-based research firm Packaged Facts. St. Louis-based Nestlé Purina PetCare, which started its PurinaCare insurance subsidiary in 2008 and has expanded coverage to all 50 states, believes that eventually 10 percent of U.S. pets will be covered by insurance.

Changes in people’s social support systems — higher divorce rates, fewer children and people living farther away from their families — has helped drive this trend, said James Serpell, a veterinary ethics professor at the University of Pennsylvania’s School of Veterinary Medicine. “We’re using animals to replace what we’re losing in human social relationships,” he said.

Who Let the Dogs Out?

In 1982, VPI Pet Insurance issued the first pet insurance policy in the United States. VPI has long dominated the industry, but it has lost market share in recent years as more providers emerged. VPI had 52 percent market share in 2009, according to Packaged Facts, down from 68 percent in 2005. The number of pet insurance providers in the nation doubled over the last decade from six to a dozen in 2010.

Among the newcomers is Nestlé Purina. After studying the pet insurance market for three years, the company felt it could be competitive by drawing on its experience and research in pet health.  According to company executives, a void existed in the market for people to access information about what pet policies covered. Packaged Facts estimates it still has less than 1 percent of the North American pet insurance market. However, the entry into the market of such a large global consumer products conglomerate, no less one as cautious and conservative as Nestlé Purina is a sign of the market’s strong growth potential.

Rivals include pet retailer PetCo and the financial services division of grocery chain Kroger. There’s speculation that Wal-Mart will introduce a pet insurance product at its Canadian stores this year.

“I think that the tipping point will be when big retailers get into it, and we’re right on the verge with retailers exploring it,” said Kristen Lynch, executive director of the nonprofit North American Pet Health Insurance Association, whose members include pet insurance providers.

Still Laughing? You Haven’t Seen the Bill

Veterinary care isn’t cheap. It’s second only to food in the amount people spend on pets. Of the $50 billion expected to be spent this year on pets, $14.11 billion will be for vet bills, up from $13 billion last year.  Visits to the office can start at $100 but can quickly add up to several thousand dollars when multiple procedures are performed.  Treatment for some chronic diseases such as cancer can cost pet owners more than $300 a month. Many pet owners are willing to pay the cost, with or without insurance.

By comparison, monthly pet insurance premiums can be a bargain. They can start at around $10 but can exceed $100 for some older dogs. Plans may allow pet owners to pay lower premiums in exchange for bearing a higher percentage of the bill, between 30 percent and 40 percent of eligible expenses.

Some of the higher-end preventive plans cover heartworm and flea medications in addition to vaccines and annual exams while some lower-cost plans just provide coverage for unexpected accidents and illnesses.  A $1,180 vet bill for a dog’s broken leg under VPI’s Super Plan, for example, will reimburse the pet owner $1,002. With a lower monthly payment, VPI will reimburse $626 of the vet’s bill.

Consumer Reports’ Money Adviser newsletter’s article analyzing VPI, ASPCA Pet Health Insurance, 24PetWatch QuickCare and Trupanion concluded that for generally healthy animals, pet insurance isn’t worth the cost, and establishing an emergency fund for unexpected pet bills is a better choice. Still, the report stated that for young pets that develop a chronic condition or illness after the policy is in place, having the policies paid off.

Time to Let the Cat Out of the Bag

As the market for pet insurance continues to grow, ReviMedia has launched a new website that gives a general overview of pet insurance options and provides users with all the necessary information for choosing the right plan for their pet. PetInsuranceComparison.net was designed to support pet owners in making an informed, independent decision and to have a positive effect on the pet insurance industry’s growth.

ReviMedia, Inc, which has offices in New York City, Panama and Holland, specialized in developing and executing direct response and performance marketing campaigns. It has a industry leading platform and campaigns focusing on high quality lead generation in insurance verticals, exclusive in-house offers and more.

Who do marketers need to target? The Packaged Facts report suggests that the best candidates might be upper income households who already indulge their pets. According to their data on who is buying pet insurance, nearly 7 percent of dogs who are taken to the veterinarian three or more times per year are covered by insurance. So are 5.3 percent of dogs belonging to a household with an income of $60,000 or more. About 5 percent of large-dog owners purchase pet insurance, as well as 4.5 percent of owners who spend $240 or more per year on dog-related expenses.

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