Pet Insurance Trends and Forecast
The future of the global pet insurance market looks promising with opportunities in the agency, broker, direct, and bancassurance markets. The global pet insurance market is expected to grow with a CAGR of 18.0% from 2024 to 2030. The major drivers for this market are significantly growing pet pollution, increasing awareness towards pet insurance policies, and surging cost of veterinary care.
• Lucintel forecasts that, within the coverage type category, accident and illness will remain the largest segment over the forecast period due to an increase in the population of companion animals.
• Within the sales channel category, direct sales will remain the largest segment due to the extensive use of direct sales strategies by prominent pet insurance providers.
• In terms of region, Europe will remain the largest region over the forecast period due to the growing adoption of pet insurance and the presence of major players in the region.
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Emerging Trends in the Pet Insurance Market
The industry’s future is being shaped by new trends that are rapidly emerging in the pet insurance market. These trends include shifts in consumer behavior, technological advancements, and the increasing significance of pets within households worldwide. The demand for such policies increases along with ownership rates, meaning that insurers must offer full protection tailored specifically to different situations.
• Telehealth Services Used for Veterinary Medicine: The inclusion of telehealth options in animal cover plans is gaining momentum both internationally and locally, enabling pet owners to seek remote consultations with veterinarians, thus saving time. This became particularly important during COVID-19 when going out was limited or restricted altogether. As such, telehealth has now become an integral part of pet insurance packages, adding value and encouraging more people to insure their pets. This trend will continue to grow with the rise of telehealth, making pet healthcare more accessible and affordable.
• Personalized Animal Insurance: There is growing interest in personalized animal insurance policies among customers who want customized products that cater to their specific needs. Insurers now offer plans specifically designed for individual pets, taking into account breed, age, and previous medical history. The motivation behind this practice is that uniform coverage may not be sufficient, as each pet has unique risks associated with it. As a result, the standardization of personalized plans is likely, and this may increase uptake in the pet insurance industry.
• Wellness Programs Integrated into Pet Insurance: Most pet insurance policies now integrate wellness programs that promote preventive care, offering regular check-ups, vaccinations, and other measures aimed at keeping pets healthy. For instance, the inclusion of wellness programs helps minimize long-term healthcare costs by preventing severe illnesses. This shift signifies a move from an emergency-only approach to health maintenance, as insurers adopt a more comprehensive approach to insuring pets’ lives.
• Expansion of Coverage to Exotic Pets: The development of pet insurance coverage that includes unique pets, such as exotic animals, is a new trend in the market. As the number of reptiles, birds, and small mammals as exotic pets increases, so does the demand for policies that address their healthcare needs. This gap has been addressed by insurers who have launched new products to cover not only the healthcare needs of mainstream pets but also some exotic ones. As a result, this expansion will attract more clients and enhance the growth of the pet insurance industry.
The emerging trends in the pet insurance market, such as telehealth services, personalized plans, wellness programs, coverage expansion to exotic pets, and AI-driven claims processing, are reshaping the industry. These trends indicate that the market’s growth is being driven by customization, accessibility, and technological innovation. As summarized above, there is a growing desire for accessibility, personalization, and innovation, with technology at the center of driving growth.
Recent Developments in the Pet Insurance Market
The pet insurance market has seen significant advancements in response to growing pet ownership, rising veterinary costs, and increasing awareness of the need for pet health coverage. Demand for holistic insurance plans has increased as more consumers see pets as family members. Emerging trends include the expansion of policy choices, digitization, and an improved user experience, preparing the pet insurance market for fast growth as insurers adapt to the changing needs of their clients.
• Expansion of coverage options: Insurance companies are increasingly offering a wide range of pet insurance arrangements that cater to various preferences, including those seeking customization. Some new policies cover wellness care, while others address alternative medications, such as behavioral treatments. This expansion has led to an overall increase in clients and a broader consumer base due to these expanded options that address a wider range of pet health requirements. These expanded coverage options are deterring people from avoiding pet insurance, positioning it as a standard part of responsible pet ownership, and driving sustainable growth in the industry.
• Integration of telehealth services: The inclusion of telehealth services in pet insurance policies is on the rise. Some insurers now offer remote consultations with veterinarians via phone calls or video sessions, providing a solution to the inconvenience of seeking medical advice. This innovation improves customer access to veterinary care and adds value to insurance products. The convenience and immediacy of telehealth services have led to increased customer satisfaction, resulting in higher retention rates and stiffer competition among providers.
• Use of AI in claims processing: Artificial intelligence (AI) has become more common in streamlining claims processing across the pet insurance industry. AI algorithms enable faster claim appraisals with fewer errors, allowing insurers to provide reimbursement more quickly. This improves efficiency, reduces operational expenses for insurance firms, and enhances the customer experience. As a result, AI technology is expected to become a key differentiating factor for competitors in this market.
• Launch of microinsurance plans: Affordability concerns in developing countries have led to the introduction of microinsurance for pets. These low-cost plans provide basic coverage for pet health at an affordable price point, making pet insurance accessible to a broader population. Microinsurance has been introduced in regions where traditional insurance options were previously out of reach, expanding the market and increasing penetration among pet owners globally. This makes pet insurance more inclusive.
The pet insurance market has undergone significant transformation through the expansion of coverage options, integration of telehealth, application of AI in claims management, launch of microinsurance, and collaboration with animal clinics. These changes will make pet insurance more accessible to a wider population, faster, and more appealing. These developments will continue driving the growth of the industry while solidifying its position as a key enabler in pet care.
Strategic Growth Opportunities for Pet Insurance Market
Rising pet ownership levels, increasing veterinary costs, and growing awareness of pet health create a perfect environment for strategic expansion in the pet insurance industry. To mainstream this product category, organizations have been seeking opportunities to expand their footprint and reinforce their services. This is seen through various applications and services that are currently evolving to meet specific needs and trends among pet owners.
• Expansion into Emerging Markets: A good example of such underdeveloped markets is emerging markets with a growing popularity of pet ownership. To tap into this rapidly rising middle-class market segment, companies may offer affordable insurance products that meet consumer requirements. One way insurers can do this is through localized marketing strategies, establishing partnerships with local veterinary practices, or even designing microinsurance policies targeted at these customers to improve penetration into these areas. For pet insurers wishing to expand globally, it would be advantageous to consider expanding their activities in emerging markets, which could substantially increase their market share.
• Development of Wellness Programs: Integrating wellness programs into pet insurance plans presents another avenue for strategic growth, targeting preventive healthcare requirements. By offering policy coverage for regular check-ups, immunizations, and other forms of preemptive measures, insurers have the chance to differentiate themselves from the competition, thereby adding value to the customer experience. Not only does this program improve long-term conditions, but it also lowers medical overheads associated with pet care. This approach can attract new customers who desire more inclusive coverage compared to traditional insurance models, helping grow the marketplace.
• Specialized Insurance for Senior Pets: As pets age, their healthcare needs become more complex, and expenses rise. Creating special policies that cover older dogs and cats with chronic conditions, ongoing treatments, and age-related illnesses presents a valuable growth opportunity. In many cases, this market segment does not receive adequate attention from conventional insurance products, which often overlook it as a niche. Focusing on this aspect might help an insurer gain additional market share by retaining buyers who seek targeted solutions, thereby increasing customer loyalty.
• Integration with Pet Wearables: The integration of pet insurance with pet wearables and health monitoring devices offers unique growth opportunities. By providing real-time animal health data, these gadgets are likely to improve the accuracy of risk assessments and claims processing, making them ideal tools for creating instant policies. Furthermore, insurers can introduce incentives for using pet wearable devices, encouraging preventive practices and reducing the number of costly visits related to specific health conditions. This would be appealing to tech-savvy pet owners, opening up new markets within technological sectors that are fit for growth.
The future of pet insurance is being shaped by strategic growth opportunities, including expansion into emerging markets, development of wellness programs for pets, specialized insurance plans for senior pets, integration with pet wearables, and coverage expansion for exotic pets. These opportunities clearly show that the industry has responded to changing consumer demands and technological advancements, positioning itself well for further growth and innovation in the future.
Pet Insurance Market Driver and Challenges
Various factors drive or hinder the growth and development of the pet insurance market. These factors include technological advancements, economic conditions, regulatory changes, and changes in consumer behavior. For those who wish to succeed in this market landscape, it is essential to understand its main drivers and challenges.
The factors responsible for driving the pet insurance market include:
• Rising Veterinary Costs: The high cost of animal medical treatment is one of the reasons behind the increasing pet insurance sales volumes worldwide. As veterinary treatments become increasingly sophisticated, so do their costs, necessitating pet owners to search for cheaper ways to manage expenses. Pet insurance provides financial coverage for unexpected medical expenses, such as accidents. The growing cost of veterinary care encourages more pet owners to take out insurance, significantly contributing to the growth of the market. This trend is expected to continue, given the anticipated rise in veterinary costs, making pet insurance a vital aspect of pet care.
• Growing Pet Ownership: Among other factors, the millennial and Gen Z cohortsÄX%$%X growing tendency to own pets is a key driver of demand for pet insurance. The demand for pet-based products and services, including pet insurance, has increased as more families have pets. Moreover, this demographic shift has driven market expansion among young pet owners, who are targeted by insurers through digital marketing tools and personalized coverage plans. Based on these trends, the growth in pet ownership will continue, with more owners opting to protect their pets through insurance.
• Technological Advancements: Innovation in technology, such as AI-enabled claims processing, telehealth services, and pet wearable technology, is fueling growth in the pet insurance industry. These advancements lead to improved customer experiences, making insurance more efficient, accessible, and personalized. Technology facilitates better products from insurers, enhances risk management, and reduces business costs through automation. As a result, more companies are expected to continue integrating technology into their services, driving further growth opportunities within the pet insurance sector.
Challenges in the pet insurance market include:
• High Premium Costs: A major challenge facing the pet insurance market is high premium costs, which act as a barrier for many pet owners. Insurance provides financial protection, but it can be an unnecessary expense if one cannot afford it, especially due to its high cost. This issue is more pronounced in low-income markets, where disposable income levels are limited, thus reducing the number of potential clients for insurers targeting these areas. Insurers must balance coverage with affordability to make pet insurance accessible to a broader audience.
• Lack of Awareness in Emerging Markets: Many emerging markets still lack awareness about the importance of having a pet insurance policy. Cultural diversity, economic limitations, and limited access to veterinary services contribute to low penetration rates. Educating customers on the value of pet insurance, while providing products that cater to local preferences, are essential steps toward overcoming this challenge. For these markets to grow, the knowledge gap must be addressed.
• Complex Claims Process: Another challenge is the complex claims process, which may lead to client dissatisfaction. Customers often become frustrated with lengthy paperwork, delayed reimbursements, and difficult-to-interpret policy terms and conditions. This has led to high churn rates. Therefore, insurers need to simplify the claims process through technology and clear communication to improve the customer experience. Insurers that streamline their claims processes are more likely to gain a competitive advantage in the market.
Veterinary costs, growing pet ownership, technological advancements, increased awareness of pet health, and regulatory support remain key drivers of the pet insurance market. However, significant challenges such as high premium costs, lack of awareness in emerging markets, and the complexities of the claims process persist. Understanding and responding appropriately to these factors will be crucial for stakeholders who wish to capitalize on available opportunities and successfully navigate the changing landscape of the pet insurance industry.
List of Pet Insurance Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. With these strategies pet insurance companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the pet insurance companies profiled in this report include-
• Trupanion
• Deutsche Familienversicherung
• Petplan
• Animal Friends Insurance Services
• Figo Pet Insurance
• Direct Line
• Nationwide Mutual Insurance Company
• Embrace Pet Insurance Agency
• Anicom Insurance
• iPET Insurance
Pet Insurance by Segment
The study includes a forecast for the global pet insurance by coverage type, animal type, sales channel, and region.
Pet Insurance Market by Coverage Type [Analysis by Value from 2018 to 2030]:
• Accident & Illness
• Accident Only
• Others
Pet Insurance Market by Animal Type [Analysis by Value from 2018 to 2030]:
• Dogs
• Cats
• Others
Pet Insurance Market by Sales Channel [Analysis by Value from 2018 to 2030]:
• Agency
• Broker
• Direct
• Bancassurance
• Others
Pet Insurance Market by Region [Analysis by Value from 2018 to 2030]:
• North America
• Europe
• Asia Pacific
• The Rest of the World
Country Wise Outlook for the Pet Insurance Market
Recent developments in the pet insurance market indicate increased recognition of pet health and a need for more comprehensive policies in various regions. This is due to the rise in the number of people owning pets, mainly among millennials who regard pets as members of their families. As a result, many nations have experienced significant breakthroughs in their pet insurance sector, such as creating new plans, introducing innovative technologies, and forming strategic alliances driven by these factors.
• United States: In the U.S., there has been a wide expansion of coverage options, including wellness plans that cover routine care and preventive treatments. Insurers are increasing customization among different pets, ranging from dogs and cats to exotic animals. The competition among insurers has driven this trend, while pet owners seek comprehensive policies. Tailored solutions are increasing uptake rates, leading to higher consumer satisfaction and boosting further growth within the U.S. pet insurance industry.
• China: A major development in China has been the integration of digital platforms with pet insurance offerings. Companies are using technology to provide online policy management, claims processing services, and customer support. Tech-savvy consumers are making good use of this digital transformation, resulting in high adoption levels of pet insurance policies. Moreover, through collaboration with e-commerce sites, it has become easier for Chinese customers to order insurance coverage when purchasing other goods for their pets. This has significantly expanded this market niche. The availability and ease of use of these applications should stimulate further growth.
• Germany: Germany has seen a considerable rise in awareness about pet insurance, driven by educational campaigns by insurers and massive advertising programs carried out by various firms. As a result, more pet owners are recognizing the importance of insuring their pets, leading to an increase in policy subscriptions. New cost-effective policies have been introduced into the German market to attract first-time buyers. With increased awareness and affordability, the market is growing rapidly as more people seek insurance for their pets to cover unforeseen veterinary expenses.
• India: The advent of microinsurance in India, specifically targeting pets, represents a major milestone. These affordable pet insurance plans are designed for price-conscious pet owners, particularly in rural and semi-urban areas. Such microinsurance typically covers basic health services and can be accessed easily via mobile phones. This approach makes pet insurance more inclusive and affordable, leading to greater acceptance rates among the Indian population. The pet insurance industry will continue to expand if microinsurance grows further in India, making it an integral part of the countryÄX%$%Xs development process.
• Japan: In Japan, pet insurance has seen the introduction of specialized policies for older pets and those with chronic diseases. These policies cover ongoing treatments and age-related health problems, becoming a popular choice for owners of elderly pets. As a result, customer loyalty and satisfaction have increased due to these customized plans, which provide peace of mind for pet owners. This focus on bespoke solutions may be contributing to the steady expansion of the Japanese pet insurance market.
Features of the Global Pet Insurance Market
Market Size Estimates: Pet insurance market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends (2018 to 2023) and forecast (2024 to 2030) by various segments and regions.
Segmentation Analysis: Pet insurance market size by coverage type, animal type, sales channel, and region in terms of value ($B).
Regional Analysis: Pet insurance market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
Growth Opportunities: Analysis of growth opportunities in different coverage types, animal types, sales channels, and regions for the pet insurance market.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the pet insurance market.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What is the growth forecast for pet insurance market?
Answer: The global pet insurance market is expected to grow with a CAGR of 18.0% from 2024 to 2030.
Q2. What are the major drivers influencing the growth of the pet insurance market?
Answer: The major drivers for this market are significantly growing pet pollution, increasing awareness towards pet insurance policies, and surging cost of veterinary care.
Q3. What are the major segments for pet insurance market?
Answer: The future of the pet insurance market looks promising with opportunities in the agency, broker, direct, and bancassurance markets.
Q4. Who are the key pet insurance market companies?
Answer: Some of the key pet insurance companies are as follows:
• Trupanion
• Deutsche Familienversicherung
• Petplan
• Animal Friends Insurance Services
• Figo Pet Insurance
• Direct Line
• Nationwide Mutual Insurance Company
• Embrace Pet Insurance Agency
• Anicom Insurance
• iPET Insurance
Q5. Which pet insurance market segment will be the largest in future?
Answer: Lucintel forecasts that accident and illness will remain the largest segment over the forecast period due to an increase in the population of companion animals.
Q6. In pet insurance market, which region is expected to be the largest in next 5 years?
Answer: Europe will remain the largest region over the forecast period due to the growing adoption of pet insurance and the presence of major players in the region.
Q.7 Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 11 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the pet insurance market by coverage type (accident & illness, accident only, and others), animal type (dogs, cats, and others), sales channel (agency, broker, direct, bancassurance, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
For any questions related to Pet Insurance Market, Pet Insurance Market Size, Pet Insurance Market Growth, Pet Insurance Market Analysis, Pet Insurance Market Report, Pet Insurance Market Share, Pet Insurance Market Trends, Pet Insurance Market Forecast, Pet Insurance Companies, write Lucintel analyst at email: helpdesk@lucintel.com. We will be glad to get back to you soon.