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Pet insurance industry sees 2020 spike

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The pandemic ramped up the already-excelling pet insurance market (growing by an average of more than  20% from 2015-2019, insuring  2.82 million pets by the end of 2019), and insurance carriers have made swift moves to provide the coverage pet owners are looking for. Pet insurers saw a “tremendous spike in enrollment” throughout 2020, as many Americans looked to their furry animals for companionship.

The industry’s exponential growth has brought some logistical issues for pet insurers, but the demand only keeps growing. Currently, there are no federal-level guidelines or regulations around pet insurance so coverage varies state by state, and only  3%  of pets are covered. The NAIC’s Pet Insurance Working Group stated in March 2021 that they were developing a Pet Insurance Model Act based largely on  California’s existing pet insurance law, as the state has been the  most proactive in adapting insurance conditions to include broader coverage

In April 2021, the Working Group approved language which places the burden of proving that a pre-existing condition exclusion applied to the condition for which a claim is made on the insurer. The team also approved language that would prevent a condition for which coverage is afforded on a policy to be a considered pre-existing condition on any renewal of that policy.

According to the agency, a  proposal  has been in the works since 2016 but has excelled their efforts in the past year. Here are a few reasons why the NAIC wanted to take the reins on the pet insurance sector. 

Millennials are willing to spend more on their pets

Millennials are treating their pets like  “their firstborn child”  and are going as far as devoting a growing share of their disposable income to them. Because of this approach, many pet owners have indicated that they are more willing to engage in more complex financial planning for their furry children, an dare willing to splurge when they need to. A survey conducted by Lending Tree reported that some pet owners have even stated that they have  gone into debt for their pets  with one in 10 participants still paying that debt off. Read about what cities are best for  animal lovers and pet owners in our recent research report here.

The pandemic’s impact on the human-animal bond

Due to stay-at-home orders, many Americans adopted pets for companionship during lockdowns. A survey conducted by TD Ameritrade found that  a third of Americans have considered fostering or adopting pets, with the rate being the highest among millennials (50%)

According to the  CEO of Pawlicy Advisor, the nature of crisis also played a role in the recent spike of pet insurance policies as pet owners started “thinking about their own health, [which] has led people to be interested” in their pet’s health too. 

In a  survey of dog owners conducted by Rover, 33% of millennials reported  that they’ve spent more than usual on their dogs during the pandemic. The report also stated that the cost of owning a dog can range from $650 to $2,295 annually, but nearly half of those surveyed responded that they actually spend up to $3,400 on their pets each year. As a result of pet owners investing more into their furry companions, animals are also living longer. As  lifespans of pets increase, consumers could start to look to their insurance carriers to help manage preventive and long-term pet healthcare.

Carriers continue to expand into the market

Currently, regulations of pet health insurance vary on a state-by-state basis, but P&C carriers are flocking into the pet insurance space; gross written premiums in the market reached  $1.56 billion in 2019  according to the North American Pet Health Insurance Association. Here are few recent moves carriers have made to expand into the pet insurance industry:


NAIC announced that it will be holding a national meeting at the end of April to discuss regulations around pet insurance further and develop a “model” pet insurance law for regulators’ approval. With new guidelines in the works, this effort could provide a framework and sense of consistency for state legislators to consider when looking at pet insurance.  Read more about what NAIC has to say about pet insurance here.

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