Sunday, November 13, 2005

Pet Insurance 2006

The market for pet insurance continues to exhibit strong growth and shows no signs of letting up in 2006, with both consumers and corporations buying more policies than ever before. The Wall Street Journal reports that pet insurance is currently offered by 5% of companies, up from 1% in 2000, and that Google (NASDAQ:GOOG), Hilton Hotels (NYSE:HLT) and Mercedes-Benz USA (a wholly-owned subsidiary of DaimlerChrysler North American Holding Corporation) plan to offer it as an employee benefit in 2006. The newspaper also reports on the fees submitted to VPI, the largest pet insurance provider in the U.S., for the most frequent claims. For dogs, the number one claim is for soft-tissue trauma costing an average of $88 each ("More Employers Are Offering Pet-Insurance Benefits," by Kerry Hannon, The Wall Street Journal, Nov. 12-13, 2005).

I think the primary driver of this segment is still the trend of humanizing pets, not only for insurance but for medications, veterinary care, pet health products and clinical trials. Treating pets just like their own children, pet owners are increasingly willing to spend large amounts of money on medical care.

The potential impact of the trend of humanizing pets may change the pet insurance industry in 2006. Pet industry followers currently cite the lack of lawsuits in the pet insurance industry as another factor in its growth, but assuming pet industry trends will once again mirror human trends implies a potential increase in lawsuits against veterinarians and pet insurance companies.

Marketing Vet or Health Services?
Market research explores health trends and consumer spending in the pet industry. Ideal for marketing, advertising and product development.

Related Links
Pet Health Reference Search
Pet Care in the 21st Century
 

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4 Comments:

At 12:24 PM, Anonymous Laura Bennett said...

So true! Another reason why more people are chosing pet insurance is that vets can do more for cats and dogs than ever before, and pet lovers are being faced with the "life or money" decision more and more. If your dog had cancer 5 years ago, you might have just put the poor thing down. Now, you have another option of $2,000 of chemotherapy that might actually extend your dog's life in a meaningful way. What would you do if faced with that decision? It makes you think carefully about pet insurance next time you have a dog or cat.

 
At 12:44 PM, Blogger Michael Dillon said...

Thanks for the comment, Laura, especially since you are the expert on pet insurance!

I wonder if cost per visit that vets charge is rising in lockstep with consumer spending? If not would this imply that vets have some pricing flexibility?

During each of my two visits to the vet this year I kept asking myself, "why don't I have insurance?" because each bill (for minor issues) would've covered about 8 months of pet insurance. These days, for a new puppy or kitten, it's pretty clear to me that insurance is so cost-effective its almost a no-brainer.

 
At 4:24 AM, Anonymous Vikas Shekhawat said...

A complete change of mindset towards animals have contibured immensely towards the pet insurance boom. Everybody want to give his or her pet the available food, clothing, and vet help.

 
At 6:32 PM, Blogger Michael Dillon said...

Thanks Vikas. I like your blog!

 

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