The sector's gross written premiums have increased by 20-30% annually since 2020.
The North American pet insurance market saw gross written premiums increase by 21.9% in 2023 to a record $4.27 billion, according to the North American Pet Health Insurance Association.
The association reports that more than 6.25 million pets were insured across North America last year.
In the US, gross written premiums increased by 21.6% in 2023. This follows premium growth of 24.2% in 2022, 30.4% in 2021 and 27.5% in 2020. The Canadian market has seen similar growth in recent years, with gross written premiums almost increasing in 2023. 30%.
Kristen Lynch, executive director of the North American Pet Health Insurance Association, said a surge in pet adoptions during the pandemic, the evolving relationship between pets and humans, and increased veterinary care costs are among the factors contributing to higher premiums. It is said that there is.
Lynch told PropertyCasualty360 that the pet insurance market has experienced a seismic shift compared to 10 to 12 years ago, when most people were surprised and sometimes amused to learn that dogs and cats were also covered. He said he was doing it.
“People are asking very technical questions now,” she says.
Lynch explains that the bond between people and their pets has become so strong that it's easier to understand the value that pet insurance provides.
“It's said that within a generation, our relationship with our pets has expanded from the barn to the backyard to the bedroom,” she says. “Once you experience some serious medical conditions and your veterinary bills are high, you will have a different perspective on the value of veterinary care and the cost of protecting yourself financially.”
“The Cat's Conundrum”
In recent years, household penetration of pet insurance has increased along with premiums, currently at 3.69% in the United States. That's up from about 1% when the association started tracking the data.
The majority of pet insurance policies in the United States (more than 78%) cover dogs, and the average annual premium for accident and illness coverage in 2023 was $675.61. The average annual premium for cats was $383.30.
Lynch calls the discrepancy in the number of dogs and cats covered the “cat conundrum,” and there are several theories as to why.
One is that most cats are reluctant to leave the house, so they are less likely to be taken to the veterinarian, so they tend not to receive medical care.
Additionally, most cats are indoor cats, and their owners therefore believe they are less likely to be injured in an accident, which most people believe is the motivation for veterinary care. But pets are more likely to get seriously ill than have an accident, Lynch said.
Another misconception that contributes to low cat adoption rates among cat owners is the fact that cats are smaller than most dog breeds, resulting in owners believing that veterinary costs will be manageably low. I believe it incorrectly.
Looking at pet insurance claims starting in 2023, the most expensive pet insurance claim was filed on behalf of a domestic shorthair cat with intervertebral disc disease. The bill for the 5-year-old cat was $59,470. For comparison, the highest dog-related pet insurance claim cost $51,133 to cover a golden retriever battling lymphoma.
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