Pet Insurance: A Bright Future Ahead
By Wood Mawhinney, Co-founder and CEO at Pawlicy Advisor
The pet health insurance market is doubling in size every 3-5 years and has seen as high as 30% growth since the pandemic. Many are calling pet care “recession-proof”, with more options for pet health insurance coverage than ever before, Americans struggling with national inflation rates, and rising veterinary treatment costs – consumer demand for financial security is fueling significant growth.
From new startup brands to insurance leaders developing their first pet insurance products, the number of product options available to consumers is increasing rapidly. As Americans make budget cuts to improve financial security, personalized comparison shopping experiences are key in navigating the ever-growing options on the market.
An increase in competition has led to many product improvements. For example, the industry has transitioned from detailed limits per procedure to more umbrella-like coverage. This drastically simplifies pet owner decision-making and I expect these patterns to continue to better meet unique, individual needs.
As U.S. consumers wade through the current economic uncertainty, more pet owners are assessing their options through easy-to-use platforms that help them prepare for costs and protect against unexpected, expensive veterinary bills. As more pet owners see their pets as part of the family, the risk of needing to surrender a pet – or worse, induce euthanasia – due to a lack of economic resources is more serious than ever. Pet insurance can help pet owners avoid these worst-case scenarios. I frequently hear from veterinarians that pet insurance is becoming a more prominent consideration for their clients because it reduces financial risk in a climate of economic uncertainty.
What’s Next
Companies are beginning to harness natural language processing and AI to process lengthy documents, helping to adjudicate claims more quickly. This is exciting because it means someday soon the time between claim submission and reimbursement for many insurance producers will not be days, but hours, minutes, or even seconds.
As there is no “one-size-fits-all” pet insurance plan and the pool of product options continues to grow, personalized comparison shopping experiences will become more important than ever. Two key ingredients that will make sifting through options less intimidating and more accessible include (1) innovative, simple-to-use tech that outlines coverage offerings, and (2) personalized recommendations that ensure pet owners are getting the right coverage at the best price.
We are also seeing new savings options for consumers who bundle pet insurance with other insurance products. The future may very well include innovation that bundles pet insurance coverage with smart devices or other products to provide discounts on premiums.
There’s more collaboration from the veterinary community too. Veterinary practices are busier than ever and are now outsourcing the pet insurance conversation to licensed third-party experts that help their clients compare options and find the best fit. This saves vet teams time, removes liability, and increases the likelihood that their pet owner clients will enroll in coverage. I expect to see many benefits resulting in better experiences both with pet insurance products and in veterinary treatment conversations.
As CEO & Co-founder of Pawlicy Advisor, I have spoken with pet owners, veterinarians, and insurance executives around the country about the pet insurance experience and innovative opportunities for improvement. One of the most important problems we’re solving is simplifying how pet owners navigate the many options on the market to find the best option for their unique needs.
Only about 4 in 10 Americans have enough savings to cover an unplanned expense of $1000 and pet insurance adoption in the U.S. still has a long way to go, as only about 4% of dogs and cats have coverage. As the number of pets insured rises, I’m confident we’ll continue to see innovative improvements and pet owners with greater peace of mind.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.