Updated: Mar 31, 2021
Is there anything more therapeutic than coming home after a stressful day and finding your pet waiting for you with open arms? The answer is self-evident by witnessing the astronomical number of Americans that have adopted pets. According to the APPA’s National Pet Owners Survey, 84.9 million (67%) families in the United States reported owning a pet. In 2019, pet owners spent an estimated $18.98 billion on vet care alone, up from $18.11 billion in 2018. Many pet owners believe that their pet is a part of the family and they are willing to spend big bucks to keep their pet happy and healthy.
Pet healthcare has been advancing rapidly and like most modern economies, advanced healthcare is expensive in the United States. Thus, the pet insurance industry has been on a rapid ascent. Its global market size is projected to grow from $ 4.78 billion in 2020 to $10.23 billion by 2026, with a CAGR of 13.5% during the period.
However, only a small percentage of pets in the United States are covered by insurance. According to the North American Pet Health Insurance Association (NAPHIA), the U.S. and Canada accounted for a combined gross written premium of $1.42 billion in 2018, up 23% from 2017. The total number of pets insured rose 17 percent to reach 2.43 million in 2018. Even with such enormous growth, only 2.8% of the pets in the United States are insured. This presents investors with an exceptional opportunity to reap benefits from this untapped market.
Bridge Point of View:
The rising spending on pets by Americans coupled with rising veterinary costs have increased the demand for pet insurance in the US economy. As more and more people are in the market for pet insurance, investing in pet insurance startups presents a great opportunity for investors looking to put their money in this sector.