Digital pet insurers zero in on education

Pet insurance in the U.S. has been available for decades, but only in the past few years has the market seen an increase in interest from consumers, insurtechs and traditional insurers. Digital strategy is at the center of the market’s rapid growth.

The number of insured pets in the U.S. was about 3.1 million in 2020, according to data from the North American Pet Health Insurance Association. But 70% of U.S. households own a pet, which is about 90.5 million homes, according to the 2021-22 American Pet Products Association’s National Pet Owners Survey. 

Kristen Lynch, executive director of NAPHIA, believes that as people – not just consumers, but insurance professionals, veterinarians and insurance regulators – become more familiar with the product, the growth will continue.

“We have seen, as an industry, that the market has grown,” says Lynch. “You can’t talk about the last couple of years without mentioning the impact of COVID-19. Two significant things impacted this–our relationship with pets changed by living and working with them and people adopted more pets.”

About one in five or 23 million households have acquired a cat or a dog during the COVID-19 pandemic, according to data from the American Society for the Prevention of Cruelty to Animals.

Lynch says that one of the reasons it may be so hard to educate on pet insurance is because it is such an emotional product.

“You don’t love your car like you love your pet,” says Lynch. “It is [a P&C line], but you have added emotional factors. It has an added layer in education. People are coming to it from an emotional perspective, from a lens of emotion.”

Lynch says the pet insurance industry came up with the dot-com boom of the 90s, and because of that it is inherently a digital product. Many digital pilots in insurance started in pet, she explains.

“Pet has always been digital – it evolved alongside the internet in North America,” says Lynch. “It’s been on the same trajectory as internet itself. Pet insurance was seen as a tech play for a lot of companies and they’ve adopted what they’ve learned in pet insurance into other lines.”