Pet Insurance Market Expected to Hit USD 19.15 Billion by 2032

Trishita Deb
Trishita Deb

Updated · Jun 7, 2024

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Introduction

The global pet insurance market has seen significant growth in recent years and is projected to expand further. By 2032, the market size is expected to reach approximately USD 19.15 billion, up from USD 9.3 billion in 2022, with a compound annual growth rate (CAGR) of 11.9% during the forecast period from 2022 to 2032​.

Several factors contribute to this growth. Increasing pet adoption rates, especially during and after the COVID-19 pandemic, have played a crucial role. Many individuals sought companionship from pets during lockdowns, significantly increasing pet ownership rates. The rising cost of veterinary care has also driven pet owners to seek insurance to mitigate these expenses. For example, in the United States, the mean annual expenditure on veterinary visits for households with dogs increased by over 60% from 2020 to 2022​.

However, the market faces challenges, including a lack of standardized pet health codes for reimbursement and low awareness about pet insurance in certain regions, particularly in the Asia-Pacific area. Despite these challenges, the market’s potential remains robust, driven by increasing awareness and innovative insurance products tailored to meet diverse pet health needs​.

Recent developments in the market include partnerships between pet insurance companies and veterinary service providers, as well as technological advancements aimed at improving customer experience and streamlining claims processing. For instance, Embrace Pet Insurance Agency LLC launched an AI platform in 2023 to automate routine claims processes, enhancing efficiency and customer satisfaction​.

Overall, the pet insurance market is poised for substantial growth, supported by increasing pet ownership, rising veterinary costs, and ongoing innovations in insurance offerings.

Key Takeaways

  • The pet insurance market is anticipated to reach USD 27.8 billion by 2032.
  • From 2023 to 2032, the market is expected to grow at a CAGR of 11.9%.
  • In 2022, the accident & illness pet insurance segment led the market.
  • The cat segment is projected to lead the market by animal type during the forecast period.
  • The direct sale channel sub-segment dominated the market by sales channel in 2022.
  • Europe held a dominant 30% market share in 2022.
  • North America is expected to have the second-largest revenue during the forecast period.
  • Asia Pacific is projected to experience the highest CAGR in the forecast period.
Global-Pet-Insurance-Market.jpg February 22, 2023
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Pet Insurance Statistics

  • 2022:
    • Over 4.8 million pets were insured in 2022, marking a notable increase from 2018 figures.
    • Monthly pet insurance costs average $44 for dogs and $30 for cats.
    • 76% of dog owners overestimate pet insurance costs, often assuming much higher prices.
    • Only 11% of respondents correctly estimated pet insurance costs to be under $50 per month.
    • A majority, 28%, estimated monthly pet insurance costs between $100 and $149.
    • 19% of pet owners are very concerned about covering veterinary expenses.
    • 31% of pet owners are somewhat concerned about veterinary costs.
    • In the USA, 80% of insured pets are dogs, and 20% are cats.
    • The average annual cost of owning a dog is $1,400, excluding unexpected vet bills.
    • Cat ownership costs average $1,150 annually, excluding emergency veterinary expenses.
    • Every 2.5 seconds, a pet receives emergency care in the USA.
    • Only 4% of dogs and 1% of cats in the USA are insured.
    • The pet insurance market, valued at $8.6 billion in 2022, is projected to reach $16 billion by 2032.
    • Insured pets experienced a 26.6% growth rate over the past four years, marking a double-digit increase.
    • Pet insurance premiums generated $3.2 billion in revenue for insurance companies by the end of 2022.
    • Average monthly premiums for accident and illness pet insurance are $53 for dogs and $32 for cats.
    • Annual veterinary visit costs for households with pets have significantly increased over the last three years.
    • Recreational drugs were among the top 10 toxins for animals treated by the ASPCA in 2022.
    • The leading medical condition for dogs is skin conditions, while for cats, it is urinary tract infections.
    • The top-paid medical-related pet insurance claim in 2022 was $60,882 for dogs and $40,057 for cats.
    • Approximately 78% of owned dogs and 85% of owned cats are spayed or neutered.
    • The average cost of recommended vaccines is $176 for dogs and $88 for cats.
    • Due to costs, 35% of pet owners delayed annual vet visits, and 23% delayed vaccinations or booster shots in the last year.
    • In 2021, 60% of pet owners reported being extremely satisfied with their veterinary visits.
  • 2023:
    • In 2023, U.S. pet insurance premiums totaled $3.9 billion, covering approximately 5.7 million pets.
    • Average annual dog accident/illness premiums were $676, while for cats, they were $383.
    • California, New York, and Florida have the highest number of insured pets, with dogs making up 80%.
    • Pet ownership in the U.S. is at 66% of households, representing 86.9 million families, up from 56% in 1988.
    • The U.S. pet industry expenditure reached $147 billion in 2023, marking a 7.5% increase from 2022.
    • Dogs are the most commonly owned pets at 65.1 million, followed by cats at 46.5 million.
  • 2024:
    • Over half of pet owners, 51%, view their pets as equal to human family members.
    • During the pandemic, 78% of pet owners surveyed by Forbes Advisor acquired their pets.
    • Households earning $100,000+ annually are most likely to own pets, with 63% owning dogs and 40% owning cats.
    • Homeowners are more likely to own pets than renters; 58% of homeowners have dogs and 36% have cats.
    • Among renters, 39% own dogs, and 29% own cats, lower than the figures for homeowners.
    • Rural Americans are more likely to own pets, with 71% of adults in rural areas having at least one pet.
    • Rural residents are more likely to have multiple pets: 47% versus 32% in suburbs and 26% in urban areas.
    • Among dog owners, 42% got their pets from stores, while 38% adopted from shelters or rescues.
    • For cat owners, 43% obtained their pets from stores, with 40% adopting from shelters or rescues.
    • Breeder purchases account for 23% of dogs, compared to only 7% of cats.
    • Over one-third of Americans, 35%, have more than one pet.

Emerging Trends

  • Increasing Pet Ownership: Pet ownership rates have been steadily rising, with more households welcoming furry companions into their families. This trend is driven by factors such as urbanization, changing demographics, and a growing recognition of the physical and mental health benefits of pet ownership.
  • Rising Veterinary Costs: The cost of veterinary care has been increasing over the years, making it challenging for many pet owners to afford necessary treatments and procedures. Pet insurance provides a financial safety net, allowing pet owners to access quality veterinary care without worrying about the associated expenses.
  • Innovative Coverage Options: Pet insurance providers are expanding their coverage options to meet the diverse needs of pet owners. Some emerging trends include wellness plans that cover routine care, alternative therapies like acupuncture and hydrotherapy, and coverage for specific breeds or pre-existing conditions.
  • Technological Advancements: The pet insurance industry is leveraging technology to improve customer experience and claims processing. Mobile apps, online portals, and telemedicine services are becoming more prevalent, allowing pet owners to access information, submit claims, and consult with veterinarians more conveniently.
  • Personalized Plans: Pet insurance companies are offering customizable plans that allow pet owners to tailor their coverage to their specific needs and budgets. This includes options for deductibles, co-pays, and coverage limits, ensuring pet owners can find a plan that best fits their circumstances.

Use Cases

  • Accident and Illness Coverage: One of the primary use cases for pet insurance is to provide financial protection against unexpected veterinary expenses due to accidents or illnesses. This coverage can help pet owners afford treatments for injuries, surgeries, diagnostic tests, and ongoing care for chronic conditions.
  • Routine and Preventive Care: Some pet insurance plans offer coverage for routine and preventive care, such as annual check-ups, vaccinations, flea and tick prevention, and dental cleanings. This can help pet owners maintain their pets’ health and potentially prevent more costly issues in the future.
  • Hereditary and Congenital Conditions: Certain pet insurance plans cover hereditary and congenital conditions, which can be particularly beneficial for purebred pets or those with known breed-specific health issues.
  • Emergency and Specialized Care: Pet insurance can provide coverage for emergency veterinary care, such as after-hours visits or specialized treatments like cancer therapy or orthopedic surgeries. This can be a valuable safety net for pet owners facing unexpected and potentially costly situations.
  • Travel and Boarding Coverage: Some pet insurance plans offer additional coverage for travel-related expenses, such as emergency veterinary care while traveling or reimbursement for boarding fees if the pet owner needs to be hospitalized.

Conclusion

The global pet insurance market is poised for substantial growth over the next decade, driven by increasing pet adoption rates, rising veterinary costs, and innovative insurance offerings. Key trends include a surge in pet ownership, especially post-pandemic, and an expanding array of insurance options catering to diverse pet health needs. Technological advancements, such as AI platforms for claims processing and telemedicine, are enhancing customer experience and operational efficiency. Despite challenges like low awareness in certain regions, the market’s outlook remains positive, with significant growth anticipated in North America and rapid expansion expected in the Asia-Pacific region due to increased pet care awareness and economic development.

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Trishita Deb

Trishita Deb

Trishita has more than 7 years of experience in market research and consulting industry. She has worked in various domains including healthcare, consumer goods, and materials. Her expertise lies majorly in healthcare and has worked on more than 400 healthcare reports throughout her career.