I recently received a summary of the North American Pet Health Insurance Association (NAPHIA) 2021 State of the Industry Report. Below are some notable stats for the United States:
- The pet insurance industry has grown at an annual rate of 24.2% over the past 5 years.
- The average monthly premium is $49.92 ($599.03 annually) for dogs
- The average monthly premium is $28.44 ($341.35 annually) for cats
- 82.9% of insured pets are dogs
- 17.1% of insured pets are cats
- There were 76.3 million cats and 75.8 million dogs owned in the U.S. in 2020
- There are 3.1 million insured pets in the U.S. (translates to a 2% market penetration)
- Market penetration (cats) = 0.7%
- Market penetration (dogs) = 3.4%
What are the takeaways?
1) Monthly premiums continue to rise. Whether you are shopping for your first pet insurance policy or have a pet already insured and you just received a large premium increase at renewal, you can lower your premium by selecting a higher deductible and/or a lower reimbursement (higher copay). Only as a last resort should you select a lower policy maximum, if available. Usually the deductible will have the greatest impact on the premium, reimbursement next, and lastly the policy maximum. See 3 Tips For Customizing A Pet Insurance Policy To Stay Within Your Budget.
2) Despite pet insurance being available in the U.S for almost 40 years (1982), still only 2% of pets are insured. So, there is plenty of room for growth. Consider that about 25% of pets in the UK are insured and more than 50% of pets are insured in some European countries. While there are likely several reasons the market penetration is relatively stagnant in the U.S. compared to Europe, see this recent podcast episode as Kent Kruse and I discuss what we believe is the main reason.
3) Pet insurance is a bargain for cat owners. The primary reason I've heard for the low number of cats insured is that most cats are predominantly indoors and indoor cats don't require vet visits nearly as much as outdoor cats. This is a myth! It is true that outdoor cats have potential health issues that indoor cats might not e.g. hit by car, attack by dog, cat fights, etc. However, when you look at this article written by Dr. Jack Stephens (founder of VPI and Pets Best insurance), you'll discover that of the Top 10 health issues for which cat owners filed claims, indoor cats are just as likely to experience them as outdoor cats - if not more so.
You can see the State of the Industry Report here.
