Pet Insurance Market Size, Share & Trends Analysis Report By Coverage Type (Accident & Illness, Accident Only), By Animal Type (Dogs, Cats), By Sales Channel (Agency, Broker, Direct, Bancassurance), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The pet insurance market size was valued at USD 9.4 billion in 2022 and is estimated to expand at a compound annual growth rate (CAGR) of 17.04% from 2023 to 2030. Growing pet population, adoption of pet insurance in underpenetrated markets, increasing veterinary care costs, initiatives by key companies, and humanization of pets are some of the key drivers of this market. In 2020, Trupanion reported that over 800,000 pets were insured under the company’s policies across key markets in the U.S., Canada, and Australia.

The COVID-19 pandemic presented several challenges for the companion animal industry including pet owners, veterinarians, veterinary hospitals, and animal health companies. However, the industry soon began to respond to the pandemic by deploying supportive measures to ensure access to veterinary care and other services. The challenges brought on by the pandemic also led to awareness among pet parents to reduce financial risk by getting a pet insurance policy. According to a survey conducted by Petplan- a market leader in the U.K., there was a boom in pet ownership during 2020. Dogs were the most popular pets followed by cats. About 47% of the respondents bought pets for the first time and overall around 26% of pet owners in the U.K. bought a pet amidst the COVID-19 pandemic.

The 3 key reasons for getting a pet were identified to be work-from-home conditions, desire for companionship, and more time spent at home due to lockdown and movement restrictions. One-fifth of the pet owner respondents stated that they were more likely to buy an insurance policy for their pets. Overall, the pandemic increased the demand for risk protection among pet parents. Companies such as the Animal Friends Insurance began offering coverage for remote consultation to pet parents by partnering with Joii Pet Care. This combined with growing pet humanization and expenditure is anticipated to propel the market growth over the forecast period.

The growing prevalence of feline and dog-related diseases and rising pet adoption are major drivers for this market. Furthermore, the growing demand for pet insurance to assist in limiting the out-of-pocket expenditure on serious medical issues, such as accidental injuries and cancer is anticipated to boost the market growth in the near future. There is also an increase in demand for veterinary healthcare facilities, which is estimated to contribute to the demand for pet insurance. Veterinary services are usually capital intensive and also require specialized veterinarians, skilled technicians, and specifically designed diagnostic equipment. This can drive up the cost of treatment for pet owners thus increasing demand for suitable pet insurance policies.

According to the North American Pet Health Insurance Association (NAPHIA), about 3.45 million pets were insured across the North American region in 2020. This number was significantly greater than the 2.81 million pets insured in North America in 2019. The surge was attributed to the stay-at-home and work-from-home conditions created by the COVID-19 crisis. However, the introduction of new insurance products by new and large market entrants is expected to increase the competition in the North American market. The market is projected to mature over time with increased competition and the volume of claims being processed.

Coverage Type Insights

The accident and illness segment dominated the market and accounted for the largest revenue share of 84.0% in 2022. It is also estimated to witness the fastest CAGR in the coming years. The key factors contributing to this growth include high veterinary treatment and diagnostic costs, a rise in the companion animal population, and an increase in awareness about pet insurance. Accident and illness policies are most commonly offered by pet insurance companies. These provide coverage for various conditions such as acute and chronic diseases, medications, diagnostic tests, and more. As accident and Illness policies provide comprehensive coverage to pet owners the segment is expected to grow the fastest in the coming years.

The others segment, on the other hand, comprising of liability insurance policies among others, is projected to see a higher uptake in Europe. This is due to countries such as Germany making it mandatory for pet owners to have dog liability insurance. Luko for instance, offers dog liability insurance in several European countries including France, Germany, and Spain. The policy covers pet owners against physical or material damages caused by pets up to 30 million euros.

Animal Type Insights

The dogs segment dominated the market and accounted for the largest revenue share of more than 59% in 2022. The segment comprising horses, small mammals, etc. is expected to grow at the fastest CAGR of more than 18% over the forecast period. The key factors contributing to this share include growing pet adoption, expansion of service offerings by insurance companies, and growing disposable income in key markets. Some of the major players in this segment are Trupanion, Inc.; Petplan; Nationwide Mutual Insurance Company; PetFirst Healthcare LLC and Embrace Pet Insurance Agency, LLC.

As per FEDIAF, around 88.0 million households across the European Union owned at least one pet in 2020. The number of pets was estimated to be 110 million cats, 89 million dogs, 51 million birds, 29 million small mammals, and 9 million reptiles. The growing pet population across the region as well as the availability of various insurance policies to support different needs of pets is expected to fuel the market growth in the future.

Sales Channel Insights

The direct sales segment dominated the market and held the largest revenue share of over 34.0% in 2022. This is attributable to the high usage of direct sales strategies by key pet insurance providers. Deutsche Familienversicherung AG, for instance, reported that direct sales contributed to 87.3% of the company’s new business during HY2020. The company also reported a 21.4% increase in online sales compared to HY 2019. Petplan, another key market player reported that direct sales accounted for about 61% of its Personal Lines insurance revenue in 2020. Peplan’s personal lines segment is inclusive of motor insurance, household insurance, and pet insurance.

The others segment comprising animal care centers, vet clinics, and more are anticipated to register the fastest growth of over 17.0% during the forecast period. This is due to an increasing number of companies onboarding veterinary care providers and pet stores as a means to reach consumers or pet parents. For instance, in December 2021, Chewy, Inc.- an e-commerce pet store partnered with Trupanion, Inc. to offer a range of pet health insurance and wellness plans to over 20 million Chewy customers. This increased pet owners’ access to high-quality and affordable healthcare offerings for their pets.

Regional Insights

In 2022, Europe dominated the pet insurance market and held the largest revenue share of over 43.0%. This is owing to the growing adoption of pet insurance, rising pet ownership, and the presence of key companies. According to the Department of Clinical Veterinary Science and the Pet Food Institute, 23.0% of pets in the U.K. and 30.0% of pets in Sweden were covered by pet insurance policies by 2017 and this penetration was anticipated to increase over time. Key market players such as Petplanare headquartered in the U.K. while DFV is headquartered in Germany. These companies continuously implement various strategic initiatives to increase their market share, thus contributing to regional growth.

In North America, the market for pet insurance held the second-largest revenue share as of 2022. However, only 1-2% of the pets in the U.S. are insured thus presenting lucrative growth opportunities. Asia Pacific region is estimated to grow the fastest at a rate of over 18%. This is owing to the emergent trend of pet adoption and the development of the economy in this region. Furthermore, an increase in awareness regarding veterinary health and improving veterinary healthcare infrastructure are other drivers of the market in the region.

Key Companies & Market Share Insights

The market for pet insurance is highly fragmented and competitive. Market players are involved in the implementation of various strategic initiatives, such as the launch of new policies, partnerships and collaborations, mergers and acquisitions, and regional expansion, to capture a larger share of the market. For instance, in June 2020, Trupanion signed a partnership with Vetter Software, a provider of technology solutions for animal healthcare. This partnership included integration between Vetter Software’s cloud veterinary practice management platform software and Trupanion’s software which enables direct payment to the veterinarian at the time of check-out.

The entry of larger companies into the pet market is expected to further intensify the competition. In November 2021, AXIS Capital Holdings Limited’s specialty insurance business segment- AXIS Insurance, entered the market by partnering with Managing General Underwriter Petplan. The company partnered with Petplan via its Accident and Health unit and this strategic collaboration supported its growth objectives. Some of the prominent players in the pet insurance market 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

• ipet Insurance Co., Ltd.

• MetLife Services and Solutions, LLC

• Pumpkin Insurance Services Inc. 

Pet Insurance Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For the purpose of this report, Grand View Research has segmented the global pet insurance market report on the basis of coverage type, animal type, sales channel, and region:

• Coverage Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Accident & Illness

  • Accident only

  • Others

• Animal Type Outlook (Revenue, USD Million, 2018 - 2030)

  • Dogs

  • Cats

  • Others

• Sales Channel Outlook (Revenue, USD Million, 2018 - 2030)

  • Agency

  • Broker

  • Direct

  • Bancassurance

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

    • France

    • Italy

    • Spain

    • Netherlands

    • Sweden

    • Norway

  • Asia Pacific

    • China

    • India

    • Japan

    • Australia

    • South Korea

  • Latin America

    • Brazil

    • Mexico

    • Argentina

  • MEA

    • South Africa

    • Saudi Arabia

    • Israel