Pet Insurance Market Size, Share & Trends Analysis Report By Coverage Type (Accident-only, Accident & Illness), By Animal Type (Dogs, Cats), By Sales Channel (Agency, Broker, Direct), By Region, And Segment Forecasts, 2024 - 2030

Pet Insurance Market Size & Trends

The global pet insurance market size was estimated at USD 11.87 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 14.15% from 2024 to 2030. The 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 factors driving the market growth. The latest findings from the 2023 State of the Industry (SOI) report by NAPHIA indicate that there are currently 5.36 million insured pets across North America. This represents a 21.7% increase compared to 2021 when the total number of insured pets in the area was 4.4 million. The rising incidence of diseases in cats & dogs and the increasing trend of pet adoption are expected to propel market growth.

In addition, there is a growing need for pet insurance to help mitigate expenses associated with serious medical conditions like accidental injuries and cancer, thereby fueling market expansion. The surge in demand for veterinary healthcare facilities is also expected to drive the adoption of pet insurance, as these services often involve significant capital investment, specialized personnel, and specialized diagnostic equipment, leading to higher treatment costs for pet owners. In addition, increasing disposable income of pet owners, especially in developing economies, has made pet insurance more affordable and accessible, driving market growth.

The COVID-19 pandemic posed significant challenges for various stakeholders in the companion animal industry, including pet owners, veterinarians, veterinary hospitals, and animal health companies. However, the industry quickly responded by implementing supportive measures to ensure continued access to veterinary care and related services. The pandemic-induced challenges also prompted pet parents to become more aware of the importance of mitigating financial risks by acquiring pet insurance policies. A survey conducted by Petplan, a leading player in the UK market, revealed a rise in pet ownership during 2020, with dogs being the most favored pets followed by cats.

Approximately 47% of respondents reported acquiring pets for the first time, and overall, around 26% of pet owners in the UK welcomed a new pet amid the COVID-19 pandemic. Three 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 & movement restrictions. One-fifth of the 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 Animal Friends Insurance, began offering coverage for remote consultation by partnering with Joii Pet Care. This, combined with growing pet humanization and expenditure, will propel market growth.

Market Concentration & Characteristics

Market growth stage is high, and the pace of its growth is accelerating. The pet insurance market is characterized by a high degree of innovation owing to advancements in veterinary medicine and the availability of a wide range of pet insurance plans for different animal species. In addition, rising number of pet adoptions and growing trend of treating pets as family members have significantly increased the demand for pet insurance. The expansion of available treatments for pets has led to increased healthcare costs. Pet insurance helps mitigate these expenses, encouraging pet owners to seek necessary medical care for their pets.

Regional expansion in this market involves extending coverage to different geographical areas beyond the initial markets. This expansion is driven by various factors, including increasing pet ownership, rising awareness of pet health issues, and demand for financial protection against unexpected veterinary expenses.

The market is moderately fragmented and competitive. Market players are involved in the implementation of various strategic initiatives, such as the launch of new policies, partnerships & collaborations, mergers & acquisitions, and regional expansion, to capture a larger industry share. For instance, in May 2023, JAB Holding Company's pet insurance platform acquired Pumpkin as part of its strategy to enhance its global leadership position in the rapidly growing pet insurance sector.

The entry of larger companies into the pet market is expected to further intensify the competition. In January 2024, Embrace Pet Insurance, a prominent provider of pet health coverage for dogs and cats in the U.S., celebrates a noteworthy achievement: reaching the milestone of insuring 500,000 pets nationwide. From its inception with Lily, a cat from Chagrin Falls, Ohio, on October 10, 2006, Embrace has experienced substantial growth over the past 17 years. This journey reflects the company's commitment and passion for pets and their owners. As more pet owners recognize the benefits of pet insurance and reputable providers like Embrace continue to expand their offerings, the adoption of pet insurance is likely to continue to rise.

Coverage Type Insights

By coverage type, the accident & illness segment dominated market with a share of 84.94% in 2023. It is also estimated to witness the fastest CAGR in the coming years. This growth can be attributed to several key factors, including the high costs associated with veterinary treatments and diagnostics, increasing population of companion animals, and a growing awareness of the importance of pet insurance. Accident and illness policies, which are typically offered by pet insurance companies, offer comprehensive coverage for a range of conditions, including acute and chronic diseases, medications, diagnostic tests, and more.

Given the comprehensive protection they afford to pet owners, it is anticipated that this segment will continue to witness rapid growth in the coming years. The others segment, on the other hand, comprising liability insurance policies among others, is projected to see a higher uptake in Europe. A rise in pet insurance adoption can be attributed to certain countries, like Germany, mandating dog liability insurance for pet owners. Luko, for example, provides dog liability insurance across various European nations, such as France, Germany, and Spain. Their policy offers coverage for pet owners against both physical and material damages caused by pets, with coverage extending up to 30 million euros.

Animal Type Insights

By animal type, the dogs segment held the highest share of 59.47% in 2023. The other animal type segment includes horses, small mammals, etc., and is expected to grow at the fastest CAGR of more than 17% from 2024 to 2030. 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; PetFirst Healthcare LLC; Nationwide Mutual Insurance Company; and Embrace Pet Insurance Agency, LLC.

According to the American Pet Products Association (APPA) study conducted between 2023 and 2024, approximately 66% of households in the U.S. have at least one pet, totaling around 86.9 million households. The majority of insured pets are dogs, accounting for about 80% of the insured population, while cats make up the remaining 20%. The growing pet population across the region as well as the availability of various insurance policies to support the different needs of pets is expected to fuel market growth in the future.

Sales Channel Insights

The direct sales channel segment held the highest share of 34.64% in 2023. The significant adoption of direct sales strategies by major pet insurance providers has been a driving factor. For example, Deutsche Familienversicherung AG noted that direct sales accounted for 8% of its new business during 2023, representing a substantial increase compared to the previous year. In addition, the company reported a notable 21.4% surge in online sales during the same period.

The other segment includes animal care centers, vet clinics, and more. The segment is expected to register the fastest CAGR of over 17.0% from 2024 to 2030. 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, in turn, increased pet owners’ access to high-quality and affordable healthcare offerings for their pets.

Regional Insights

In North America, the market held the second-largest revenue share in 2023. In 2022, around 5.36 million pets in North America had insurance, which increased by about 22%, according to The North American Pet Health Insurance Association (NAPHIA). With an increasing number of pet owners opting for insurance coverage for their pets, the market is expected to continue growing. However, the introduction of new insurance products by new and large-scale market entrants is expected to increase market competition in the region. The market is projected to mature over time with increased competition and volume of claims being processed.

U.S. Pet Insurance Market Trends

The U.S. has a large population of pet owners, with approximately 67% of households owning pets. This high level of pet ownership provides a substantial customer base for pet insurance companies. For example, in December 2023, Spot Pet Insurance, in collaboration with philanthropist MrBeast, pledged to facilitate the adoption of 100 homeless pets. This initiative includes providing lifelong pet insurance coverage for the adopted pets, amounting to a potential commitment of over $1,000,000 in premiums. Such initiatives by key players like Spot Pet Insurance reflect a growing trend in the industry to address broader pet community issues while strengthening customer relationships and promoting pet insurance awareness and adoption in the U.S.

Europe Pet Insurance Market Trends

In 2023, Europe dominated the market and held the largest revenue share of over 44.0%. This is due to the increasing adoption of pet insurance, rising pet ownership, and presence of key companies. According to the European Pet Food Industry Federation (FEDIAF) study, in 2022, Europe was home to a total of 340 million pets, with cats (127 million) and dogs (104 million) being the most preferred pets. Key players, such as Petplanare, are headquartered in the UK, while DFV is headquartered in Germany. These companies continuously implement various strategic initiatives to increase their industry share, thus contributing to regional market growth.

UK pet insurance market growth is driven by the adoption of rescue dogs by many households, which has led to an increased demand for pet insurance that specifically caters to the needs of these pets. Several insurance providers in the UK offer coverage for rescue dogs, including those with known health conditions and older rescue dogs. Some providers specialize in ensuring senior dogs and do not place restrictions based on the dog's origin, whether it is from the UK or overseas. In addition, pet insurance for rescue dogs typically covers a range of needs, including accidental injuries and illnesses, with some policies offering lifetime coverage. The adoption of rescue dogs has contributed to market growth in the UK, with insurance providers adapting their offerings to meet the specific requirements of such pets.

Pet insurance market in Germany is expected to grow at a rapid pace on account of rising pet ownership, particularly dogs & cats, in the country, which directly influences the demand for pet insurance. With more households adopting pets, there's a growing market for insurance coverage. Moreover, the continuous rise in veterinary expenses, attributed to advancements in treatments and growing costs of veterinary services, underscores the necessity of pet insurance. This insurance serves as a safeguard against unforeseen medical costs, encouraging pet owners to prioritize their pets' health by opting for insurance plans.

Asia Pacific Pet Insurance Market Trends

Asia Pacific is estimated to grow at the fastest CAGR of over 19% from 2024 to 2030. 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 factors driving market growth.

Pet insurance market in India is experiencing rapid growth, positioning it as one of the world's fastest-growing markets for pet insurance. According to a study published by Creature Companions Magazine, India's pet care industry will rise to $800 million by 2025. Each year, approximately 600,000 pets find homes through adoption in the country, with dogs being the most favored choice, with an estimated 31 million pet dogs expected by the close of 2023. This surge in pet ownership indicates a growing need for services like pet insurance to safeguard these beloved companions.

Furthermore, a rise in pet adoptions, especially dogs, in India following the COVID-19 pandemic, coupled with the growing expenses related to their personal care, grooming, and medical needs, appears to be encouraging insurance companies to develop insurance plans tailored for pets. For instance, in the last three months of 2022, Future Generali India Insurance Company Ltd. sold nearly 25,000 pet insurance policies. These figures highlight the significant potential for market growth in India, as pet owners increasingly seek comprehensive coverage for their pets' health and well-being.

Key Pet Insurance Company Insights

Some key players operating in this market include Trupanion, Inc., Direct Line, Nationwide Mutual Insurance Company, MetLife Services and Solutions, LLC.

Deutsche Familienversicherung AG (DFV), Petplan (Allianz), Animal Friends Insurance Services Limited, and Figo Pet Insurance, LLC are some of the emerging market participants in the pet insurance market.

Recent Developments

• In January 2024, Five Sigma, a leader in cloud-based claims management solutions, formed a strategic alliance with Odie Pet Insurance, a company dedicated to making pet insurance more accessible and affordable. This partnership aims to revolutionize pet insurance claims processes and improve industry operations

• In November 2023, Fetch formed a partnership with Best Friends Animal Society, a national organization committed to ending the euthanasia of dogs and cats in American shelters by 2025. As part of this collaboration, Fetch will make substantial donations to support Best Friends' efforts to rehome shelter pets and achieve their goal of making the country a no-kill nation

• In September 2023, Independence Pet Group (IPG), a prominent pet insurance platform offering comprehensive services, acquired Felix, the sole pet insurance brand exclusively catering to cats in the U.S.

• In August 2023, Global Risk Partners (GRP) entered the pet insurance market in the UK by acquiring Petsmedicover, a pet insurance broker trading as VetsMediCover. Following the acquisition, VetsMediCover will become part of Insync Insurance, a digital broker that GRP acquired in December 2020

• In August 2023, Go Digit General Insurance collaborated with Vetina Healthcare LLP to offer extensive insurance coverage for dogs to Vetina Family members

Pet Insurance Market Report Scope

Global Pet Insurance Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the pet insurance market report based on 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