Pet Insurance Market Size, Share, and Industry Report [2031]

Report Description

Pet Insurance Market Outlook 2031

The global pet insurance market size was valued at USD 12.94 Billion in 2022 and is expected to surpass USD 51.95 Billion by 2031 expanding at a CAGR of 16.7% during the forecast period, 2023–2031. The rising pet population, the acceptance of health insurance for pets in underpenetrated markets, and rising veterinary care costs are the primary factors that are expected to drive the pet insurance market.

The report finds that the COVID-19 pandemic positively impacted the market as during the pandemic awareness of health insurance for pets has increased. According to the Royal Society for the Prevention of Cruelty to Animals (RSPCA), among the 12 Mn dogs in the UK, 3.2 Mn were acquired as ‘Pandemic Puppies’. This has resulted in the high adoption of pet insurance during the pandemic.

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A report from the North American Pet Health Insurance Association (NAPHIA) 2021 states that in the U.S. 3,101,956 pets were insured in 2020 which is 23.2% higher than in 2019. This has resulted in a surge in the pet insurance market during the pandemic.

Pet Insurance Market Dynamics

Major Drivers

Pet insurance helps in covering the cost of veterinary healthcare for pets. It helps in reimbursing the cost of accidents and illnesses of pets which are expected to drive the market. Moreover, with the help of pet insurance, pet owners are able to give advanced treatment to their pets.

• For instance, according to the American Pet Products Association's (APPA) National Pet Owners Survey 2021-2022, 151.1 million, or 70% of households in the U.S. reported owning a pet and are expected to spend an estimated USD 32.3 Bn on vet care and products.

Some health insurance for pets further covers preventive care and allows customized coverage according to the budget and needs of users. With the increasing demand for pet insurance, some companies now provide preventive care for pets including health check-ups, vaccinations, and others. This in turn helps pet owners to keep their pets healthy and help to keep early health issues away.

According to the North American Pet Health Insurance Association (NAPHIA), in 2022 State of the Industry Report reveals the total number of pets insured in 2022 reached 5.3 Mn, up from 3.1 Mn in 2020.

Existing Restraints 

High cost of some pet insurance policies is expected to restrain the market. There are some pet insurance policies that include comprehensive features which cover a wide range of treatments thus, their cost is comparatively more expensive than the normal ones.

The cost of a monthly insurance plan can go up from USD 23 to USD 90 for dogs on average. Furthermore, some health insurance for pet policies have additional co-pays and extra deductibles which leads the pet owner to pay additional costs. Thereby, such factors are expected to restrain the market during the forecast period.

Emerging Opportunities

Increasing number of pet owners around the world which leads to growing adoption of pet insurance policies is expected to create lucrative opportunities for the market players. As per research, in 2022 around 70% of U.S. households own a pet, and with the increasing health awareness for pets, the number of insurers is further increasing. For instance, the number of pets insured in India is estimated to surpass 400 crores as of 2023.

Moreover, starting partnerships with pet-related companies to reach potential customers is expected to create opportunities further for the market players. For instance, On October 3, 2022, a pet-care company Purina started a partnership with DOGTV and Spot Pet Insurance to provide exclusive benefits to dog and cat owners in the U.S. The purpose of the partnership is to provide pet owners complimentary one-month access to DOGTV and help pet owners to manage pet health costs with the insurance.

Scope of Pet Insurance Market Report

The report includes an assessment of the pet insurance market size, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Pet Insurance Market Segment Insights

Coverage Type Segment Analysis

Based on the coverage type, the market is divided into accident & illness, accident only, and others. The accident & illness segment is expected to account for a key share of the market during the forecast period.

Pet insurance providers most typically offer accident and illness covers. These cover a wide range of ailments, including acute and chronic illnesses, treatments, diagnostic tests, and more. The accident & illness premium for dogs in the U.S. is USD 583.91 per year.

The accident only segment is expected to expand at a considerable CAGR during the forecast period. The accident only insurance covers the expenses of the pets if injured in an accident including meeting an accident by a car or fighting with another animal. These types of insurance do not cover any other illness or severe health issues, hence they are less expensive than the other type of insurance.

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Animal Type Segment Analysis

In terms of animal type, the pet insurance market is segregated into dogs, cats, and others. The dog segment is expected to expand at a significant growth rate during the forecast period. The growing dog population and high adoption of dogs as a pet is contributing to the segment growth.

According to World Animal Foundation, the number of dogs adopted as a pet is more than 471 Mn worldwide. Thus, the growing adoption of dogs leads to a rise in healthcare expenses which is expected to cover with the help of pet insurance. Thereby, contributing to the segment growth.

The cat segment is anticipated to hold a considerable CAGR during the forecast period. The growing adoption of cats in different countries is boosting the segment. For instance, cats become the most adopted and popular pets among Chinese residents with 65.4 Mn in 2022.

According to American Pet Products Association (APPA), the estimated number of households in the U.S. that owns a cat is 46.5 Mn. Thus, the growing adoption of cats leads to high demand for pet insurance, which is expected to boost the segment.

Sales Channel Segment Analysis 

Based on the sales channel, the pet insurance market is segmented into the agency, broker, direct, bancassurance, and others. The bancassurance segment is projected to hold a large market share during the forecast period.

Bancassurance is a type of sales channel that is related to selling insurance policies through banks for pets. This helps insurance providers meet many customers and provide insurance policies to those who previously didn't get insurance for their pets.

Bancassurance makes it easier for providers to sell policies as banks may sell the insurance policies as a package with other products or services such as credit cards and others.

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Regional Analysis

On the basis of region, the global pet insurance market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. North America dominates the market during the projection period owing to the high pet adoption rate in the region. According to the APPA National Pet Owners Survey 2023-2024, 66% of U.S. residents own a pet which is equivalent to 86.9 Mn households. Moreover, the growth of the key market players from the U.S. is further contributing to the market growth in the region.

• For instance, Trupanion, a U.S. pet insurance company has the highest average monthly premium for dogs. Thus, with the availability of an average monthly premium and growing activities of pet adoption, the market is expected to expand at a significant growth rate in the region.

Europe is expanding at a considerable CAGR during the forecast period. The rising number of pet insurance companies in Europe is fueling the market in the region. Moreover, growing adoption of pets in the region is expected to surge the market.

• For instance, in Europe, the population of cats and dogs was around 83.6 Mn and 72.7 Mn respectively in 2021. Thus, the growing population of pets is expected to create opportunities for the major market players in the region.