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In the USA, the move towards a model law to regulate the pet insurance market is making headway. A meeting of the National Association of Insurance Commissioners (NAIC) was held last month. This identified the next steps towards the legal standard that will address long-standing consumer quibbles with pet insurance cover, including determining ‘pre-existing’ conditions for a pet and how long buyers need to wait before filing claims.
A timely development
When this law comes into effect, there will be a set of guidelines for pet insurance providers to adhere to for the first time. Although each State will have the right to adapt the overall law, this is a very timely development deemed crucial by industry experts and shows that the pet sector is becoming a serious player in insurance. It will provide standards for pet insurance, including for the numerous new entrants to the market, in a similar way to the more traditional sectors such as home and medical – just as the market is poised for significant growth.
The latest annual survey from the North American Pet Health Insurance Association (NAPHIA) highlights that 3.45 million pets were insured in North America at the end of 2020. Although this number reflects an annual growth rate of 23.4 percent over the past five years, below three percent of the USA’s pets are covered by insurance compared with an average of roughly 20 percent across European markets, according to IBISWorld. And although American pet owners spent an all-time record of almost $2 billion USD on pet health insurance in 2020, this expenditure is projected to increase year on year as more owners opt to invest in their pets’ welfare.
New types of pet insurance offers
An interesting outcome of the recent growth of the pet insurance industry is that insurers are launching new products and offers to encourage owners to purchase insurance. This trend is likely to continue with market growth. This week, the Evening Standard discussed how multi-pet policies are gaining ground here in the UK. In the USA, there has been wide debate about the benefits and pitfalls of lifetime, non-lifetime and accident only cover for different pets. KD Market Insights recently predicted that an increased demand for non-lifetime cover would play a significant part in the expansion of the North American pet insurance market.
We believe that pet insurance offerings will evolve beyond traditional policy types to provide more choice for pet owners. We are likely to see more pet insurance offered through vets, grooming parlours and pet suppliers and an increase in insurance policies built into pet healthcare bundles. As more people focus on the overall wellbeing of their pets, getting the best value coverage to safeguard a pet’s health will likely take precedence over simply cost alone.