A market like no other
The pet insurance market was worth USD 8.3 billion in 2021, and it is expected to increase at a compound annual growth rate (CAGR) of 16.7% from 2022 to 2030. The market is being driven by a growing pet population, the acceptance of pet insurance in underserved markets, major company activities, rising veterinary care costs, and the humanization of pets. Trupanion said that over 800,000 pets were covered under its policies in important markets in the United States, Canada, and Australia in 2020.
One step backward, two steps forward
The COVID-19 pandemic posed a number of issues for pet owners, veterinarians, veterinary hospitals, and animal health organisations in the companion animal market. However, the sector quickly responded to the epidemic by putting in place supportive steps to ensure that veterinarian care and other services were available. The pandemic's issues also increased awareness amongst pet parents about the importance of having a pet insurance coverage to prevent financial risk. According to a survey done by Petplan, a market leader in the United Kingdom, pet ownership is expected to increase in 2020. The most popular pets were dogs, followed by cats. During the COVID-19 pandemic, around 47 percent of respondents purchased pets for the first time, while approximately 26 percent of pet owners in the United Kingdom purchased a pet.
The rise in pet humanization
Work-from-home situations, a desire for companionship, and increased time spent at home owing to lockdown and travel restrictions were recognised as the top three reasons for acquiring a pet. One-fifth of pet owner respondents said they were more likely to get a policy for their animals. Overall, the pandemic boosted pet owners' need for risk prevention. By working with Joii Pet Care, companies like Animal Friends Insurance began giving coverage for remote consultation to pet parents. Over the projected period, this, together with rising pet humanization and expenditure, is expected to move the market forward. The rising prevalence of feline and canine-related disorders, as well as increased pet adoption, are important market drivers. In addition, the increased demand for pet insurance to help minimise out-of-pocket expenses for significant medical conditions such accidental injuries and cancer is expected to drive market expansion in the near future. There is also a rise in need for veterinary healthcare, which is expected to contribute to pet insurance demand. Veterinary services are typically capital demanding, requiring specialised veterinarians, competent technicians, and diagnostic equipment created expressly for them. As a result, the cost of treatment for pet owners may rise, driving rising demand for appropriate pet insurance plans.
Wrapping up the statistics
According to the North American Pet Health Insurance Association (NAPHIA), around 3.45 million pets in the North American region were insured in 2020. In 2019, 2.81 million pets were insured in North America, which was a considerable increase. The increase was ascribed to the COVID-19 crisis's stay-at-home and work-from-home conditions. New insurance products introduced by new and major market entrants, on the other hand, are likely to increase competition in the North American market. With growing competition and the volume of claims processed, the industry is expected to mature over time.
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