The global pet insurance market size reached USD 5.10 Billion in 2021 and is expected to reach USD 18.10 Billion in 2030 and register a revenue CAGR of 15.3% during the forecast period. Increasing rate of pet adoptions in countries across the globe, rising prevalence of various animal diseases, and need to cover pets in the event of disease and treatment or as a result of accidents are some of the key factors expected to continue to drive market revenue growth. Increasing number of companies offering pet protection policies and insurance and rise in pet owner spending on pet healthcare are other factors expected to drive revenue growth of the market.
Hectic work schedules and need for companionship have prompted an increasing number of individuals to adopt. Studies have recently been linking pet ownership to lower blood pressure and reduced stress levels among pet owners. According to the American Heart Association, owning a pet is associated with reducing heart disease risk, and helps to lower unhealthy cholesterol and triglyceride levels. Results of studies have also indicated that having a pet helps to boost self-confidence and also lighten up the owner’s mood, which eases anxiety and stress. The most common pets in households globally are dogs and cats. Pets can also contribute to owners maintaining a healthy regimen and staying fit owing to need to walk and play with pet dogs. A pet companion is also effective in management of feelings of loneliness and depression, as well as to add some level of protection at home.
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Pets require regular medical check-ups like humans as animals are also prone to various infections, allergies, and diseases, including kidney disorders, ear infections, diarrhea, diabetes, respiratory infections, and others. These animals require timely check-ups and proper treatment for minor and major ailments to maintain good health. Owners understand the need to regularly consult veterinarians and schedule health check-ups to identify common medical issues their pets may be affected by. In addition, rising incidence of accidents involving motor vehicles and other related emergencies, need for regular clinic visits, high hospital expenses, and veterinarian fees increase overall cost of pet ownership. Pet ownership is relatively high in many developing countries and the trend of pet insurance has been increasing significantly in the recent past. Revenue generated from pet insurance has increased by over 25% from 2019 over 2020. According to the North American Pet Health Insurance Association (NAPHIA), the pet health insurance sector in North America exceeded USD 2.174 billion in 2020, which was a 26% increase over 2019. Revenue has also been exhibiting double-digit growth for the sixth consecutive year. A number of insurance companies are also exploring and leveraging opportunities to drive revenues and have devised and offer pet insurance policies and schemes to enable pet owners to manage out-of-pocket treatment costs more conveniently. Health coverage offered under such schemes are similar to that of policies designed for humans. Owners can choose from different policies according to breed, species, and age of pet. In addition, pet insurance is classified as inland marine insurance, which is a diverse category. This is devised to include cover for cargo, communications equipment, event cancellation, fine art, and personal watercraft. In 2020, this category was impacted substantially in terms of profitability due to the COVID-19 pandemic and subsequent lockdowns and restrictions.
Drivers: Increasing number of companies offering pet insurance
Surge in number of people adopting pets owing to need for companionship and also need to find homes for companion animals as a result of economic slowdown and due to rising prevalence of stress and depression is a major factor driving market revenue growth. In addition, increasing number of animals in rescue centers and rising trend of adopting rescued animals are factors expected to drive market revenue growth over the forecast period. The COVID-19 pandemic served to drive a rapid increase in the number of dogs and cats adopted, and surveys indicate that the pets served as effective companions during distressing times. According to the American Pet Products Association a sizable percentage of families and individuals in the U.S. had companion animals or pets even before the coronavirus pandemic. Statistics indicate that around 44% of households in the country had a dog, while 35% had a cat between 2015 and 2016. That takes the total of 78 million dogs and around 86 million cats in households in the U.S. More dog owners opt for breeders than shelters, while cat owners typically preferred animal shelters for adoption, or through friends and relatives.
The scenario changed rapidly with the closure of businesses, and as schools went virtual, more Americans added a pet to the household, and almost one in five households acquired a dog or cat. This increased further when the public was reassured by officials that the risk of pets transmitting COVID-19 to humans was extremely low and rare. Also, bonds forged during the testing times have grown and pet owners are increasingly opting for pet insurance as pets come to be considered as part of the family over time. This is one of the major factor resulting in an increasing number of pet owners exploring options of pet insurance, and this is based on age of pet and types of insurance available, and also on the basis of the provider’s ranking or standing in the market. This has also been attracting the attention of investors, insurers, and regulators as the pet insurance market continues to grow.
Increasing prevalence of various animal diseases, rise in healthcare expenses on pets, and increasing disposable income in developing countries are other factors expected to boost revenue growth of the market. Rapidly increasing number of agencies and companies offering pet insurance policies and rising demand for cost-effective pet health insurance cover are also expected to drive market revenue growth in the coming years. Moreover, major players are focusing on offering improved and more cost-effective pet health insurance policies due to the increasing competitive scenario in the market. High cost of pet treatment and ‘fear of economic euthanasia’ may not have been proven to be the primary factor prompting pet owners to take out insurance for their pets. Adopting or owning a pet brings along some costs, of which medical care accounts for a sizable share. Pet insurance, similar to health insurance for humans, has been gaining traction as pets and humans continue to bond and animals become part of families, and pet health insurance could help to keep expenses in check. This is another key factor expected to continue to drive adoption and support market revenue growth.
Technology is also playing a major role in the pet insurance market and shaping how the scenario is evolving. The launch of customized care plans for specific needs of each pet owners is an emerging trend that is expected to gain robust traction in the near future. Insurance providers are focusing on leveraging opportunities from specifically designed plans of clients to make pet healthcare more affordable and easily accessible to all types of pet owners. For instance, Independence Pet Holdings (IHC), which is the U.S. pet insurance platform for JAB Holding Co. and its platform PetPartner, which is a Germany-based conglomerate, is acquiring Chicago-based pet insurance provider, Figo. Figo’s products and services are offered online through Pet Cloud app, which is a cloud-based platform that provides 24/7 access to live veterinarians, customer support, claims processing, digital pet record management, and a social network for pet owners.
Restraints: Lack of awareness among consumers in a number of developing countries
A sizable number of individuals and families across the globe own pets, but a vast percentage of these, especially in many developing countries, are unaware about pet insurance policies and schemes, or availability. A number of pet owners face challenges coping with veterinary expenses of vet visits, which could vary on the basis of services required. Cost of routine check-ups, vaccination, and clinic visits vary from country to country. In addition, several policies are expensive and do not cover all expenses such as dental issues, behavior disorders, grooming, and others. Furthermore, various veterinary records have no standard codes for pet diagnosis, which creates problems during reimbursement of expenses. These are some of the major factors that could hamper revenue growth of global pet insurance market to some extent. Another major factor impacting adoption of pet insurance is breed of pet, which can have serious implications on the pet’s health, welfare, and subsequent medical costs throughout their lifetime. This can also decide the check-ups and treatment, and subsequently the costs that can be expected to be incurred during the period. Different dogs are susceptible to various genetic health complications associated with the specific breed. In such instances, and with insurance not covering certain aspects and conditions, many pet owners who may have taken out a policy/policies on pet/pets would consider creating an account and saving or putting aside money rather that purchasing pet insurance a second time around. Another factor that many consider is the structure of most policies, in which premiums increase as the insurer’s pet ages. Initially, premiums are typically lower when the policy is opened and the pet is younger, but is increased as the pet ages. Furthermore, some policies do not work for all pet owners due to circumstances and restraints that come along with policy design. A number of pet adopters may adopt pets that are older and may be restrained from taking out a policy as a result. This is due to the probability that the chances a younger animal will have a pre-existing condition that will never be covered. Also, for pets around eight years old, the selection of policies available to choose from are vastly reduced or limited, and only policies offered cover accident-only. Another restraint to opting for pet insurance is, availability of cover for rescue pets. Uncertain age and lack of medical history are major factors that hamper taking out a policy. In addition, pet insurance providers – currently – have no legal obligation to maintain the competitiveness of policy taken out and can make any changes when the insurer renews annually. These changes can include premium increases, reduction in coverage percentages, added exclusions, and reduced payment limits and sub-limits. This can pose challenges owing to assigning budget associated with pet insurance costs and insecurity regarding what cover can be availed or what will be exempt for certain conditions or incidents as they age. Change in cover, exclusions, low limits and caps – dental care, vaccinations, desexing, and preventative treatment are usually not included – and insurers paying up are major factors currently dictating or having an effect on whether a pet owner takes out a policy or not. These are some of the major factors expected to hamper market growth to a major extent in the near future.
Based on product, the global pet insurance market has been segmented into illness, accidents, and others. The illness segment accounted for largest revenue share in 2021, due to factors such as rising prevalence of animal diseases and increasing deaths of dogs and cats due to various illnesses. Some pet insurance companies offer illness coverage with flexible premiums and deductibles for unexpected emergencies, veterinary hospital costs, and overall high healthcare bills. There are other policies that cover breed-specific genetic disorders, dental issues, hip dysplasia, and cancer which is also expected to drive revenue growth of the segment.
Accidents segment is expected to register a steady growth rate during the forecast period owing to basic policy coverage for unexpected accidents, hospitalization, injuries, surgeries, and medications. Pets are prone to accidents and can be injured by moving vehicles or human error.
The others segment, comprising of liability insurance policies among others, is expected to register a moderate growth rate over the forecast period. Factors such as mandatory government regulations in some countries for owners to take up dog liability insurance is a factor expected to drive revenue growth of the segment. Luko, for instance, provides liability insurance in countries such as Germany, Spain, and France. The policy covers pet owners against material or physical damage caused by pets.
Animal Type Insights:
Based on animal type, the global pet insurance market has been segmented into dogs, cats, horses, exotic pets, and others. The dogs segment accounted for largest revenue share in 2021, owing to causes such as increasing dog population, increasing number of dogs in rescue centers, rising rate of dog adoptions, rising cases of canine distemper, oral diseases, kidney disorders, skin allergies, and high costs of treatment. Additionally, rising awareness regarding importance of pet healthcare and availability of insurance plans, high chances of unexpected medical emergencies, and availability of breed-specific insurance schemes are other factors expected to drive revenue growth of this segment.
Horses segment revenue is expected to register a steady growth rate over the forecast period. Factors such as rising pet adoption, expansion of services by insurance agencies and companies, and increasing disposable income and pet adoption trends in key markets are expected to drive revenue growth of the segment.
Sales Channel Insights:
Based on sales channel, the global pet insurance market has been segmented into agency, broker, bancassurance, direct writing, and others. The agency segment accounted for largest revenue share in 2021. Rapid segment revenue growth is attributed to factors such as increasing pet population across the globe, rising incidents of animal illness and accidents, and increasing number of agencies and companies offering more affordable insurance cover and plans for pets. Pet insurance agencies offer different policies and plans to pet owners for covering healthcare expenses of their four-legged companions and allow them to choose appropriate plan for their pet depending upon species, breed, and age. These pet insurance agencies carry out various advertising and marketing campaigns to attract potential customers, process all the required paperwork, collect monthly premiums on time, and renew pre-existing policies on need, which attracts more clients.
The others segment consisting of vet clinics and animal care centers is projected to register considerable revenue growth over the forecast period. Increasing number of companies hiring veterinary care providers and retail pet stores in order to reach more pet parents and clients which offers pet owners better access to affordable and high-quality healthcare services for their pets is expected to drive revenue growth of the segment.
Market in North America accounted for largest revenue share in 2021. Increasing number pet adoptions, rising expenditure on pet healthcare, and prevalence of pet illnesses and accidents are major factors expected to drive North America market revenue growth. Pet population in North America has increased considerably in the recent few years. Increasing awareness regarding pet insurance, rising adoption of suitable coverage schemes, high veterinary expenses, and increasing number of agencies and companies offering insurance policies for pets are major factors expected to drive revenue growth of the market in the region.
Market in Asia Pacific is expected to register a rapid revenue growth rate over the forecast period. Factors such as increasing number of persons adopting pets, increasing awareness rising awareness regarding the need for veterinary health, and increasing disposable income are major factors expected to drive revenue growth of the market in the region. Increasing adoption of dogs and cats for rescue centers, rising pet emergencies due to accidents and illness, increasing number of agencies and companies providing pet insurance, and rising awareness regarding maintenance of pet health are other factors expected to drive revenue growth of the market in Asia Pacific. Japan, India, and China are major revenue contributors to the market in this region and the trend is expected to continue over the forecast period.
The pet insurance market in Europe is expected to register a steady revenue growth rate over the forecast period. Rising acceptance of pet insurance, increasing pet ownership, and presence of key market players is expected to drive regional market revenue growth. Major market players are constantly investing in implementation of various strategic initiatives to enhance their respective positions in the market.
Competitive landscape of the global pet insurance market is moderately consolidated with few key players operating on global and regional levels. Key players are engaged in strategic alliances to expand their respective portfolios and gain a robust footing in the global market. Some major companies in the market report include Trupanion, Inc., Deutsche Familienversicherung AG (DFV), Petplan (Allianz), Animal Friends Insurance Services Limited, Figo Pet Insurance, LLC, Direct Line, Nationwide Mutual Insurance Company, Embrace Pet Insurance Agency, LLC, Anicom Insurance, and ipet Insurance Co., Ltd.
- On 7 December 2021, Chewy, which is an e-Commerce pet store, signed a partnership with Trupanion, Inc. to introduce a wide range of pet health insurance and wellness policies to over 20 million Chewy customers. This increased pet owners’ access to high quality and affordable healthcare offerings for their pets.
- On 01 April 2021, Petline Insurance Company announced its partnership with Armour Insurance to launch a new insurance product, which is a Pet Shield insurance for dog and cat owners. The insurance plan ensures lifelong protection of insured pets.
- On 16 April 2020, Petplan Pet Insurance launched an insurance coverage plan for pet parents during the COVID-19 pandemic. The new plan covers telemedicine consultations with any veterinarian in the U.S. and Canada and boarding fee reimbursement for subscribers infected with COVID-19 and hospitalized for four days or more.
Segments Covered in the report
This report offers historical data and forecasts revenue growth at a global, regional, and country level, and provides analysis of the market trends in each of the sub-segments from 2019 to 2030. For the purpose of this report, Reports and Data has segmented the pet insurance market based on product, animal type, sales channel, and region:
Pet Insurance Market Report Scope
Segments covered By Product Insights, Animal Type Insights, Sales Channel Insights, Regional Outlook
By Product Insights
By Animal Type Insights
By Sales Channel Insights
Middle East & Africa
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