Pet Insurance in North America, 3rd Edition

Pet Insurance in North America, 3rd Edition

Pet Insurance in North America, 3rd Edition If the future of this market depends on marketing-driven consumer demand, as Packaged Facts believes it does and history supports, then the North American market for pet insurance is at a pivotal stage. Since the previous edition of this report, published in November 2005, over a half dozen new companies have come onto the playing field, each of them putting a different spin on pet insurance, from highly customizable plans to greatly simplified ones. In the pet insurance spotlight as of spring 2008 are huge consumer and pet market companies and brands—including PurinaCare, AKC, ASPCA and Kroger—as well as dedicated pet insurance underwriters such as American Pet Insurance Company and SecuriCan. This ramped-up activity is challenging established marketers across all channels—direct-to-consumer, veterinarians, company benefits, corporate alliances and shelter programs—a situation that seems sure to drive up consumer awareness and market penetration.

Report Methodology
Based on primary research including interviews with every leading pet insurance provider in North America, this third edition of Packaged Facts’ groundbreaking 2003 report offers a road map for competing effectively in this market both now and in the years ahead. Six top players are profiled in depth (VPI, Pethealth, SecuriCan, Hartville, PetFirst and PetPartners), while insightful “company snapshots” detail the activities of emerging U.S. players including Trupanion (marking the U.S. cross-over of Canada’s Vetinsurance), Pets Best, Embrace, Petplan and EnsuraPet. Statistics provided include historical and projected market revenues (gross written premiums), number of policies in force and company shares (both U.S. and Canadian), along with detailed consumer profiles of pet owners, pet insurance purchasers and pet owner prospects based on data from sources including Simmons Market Research Bureau, The American Pet Products Manufacturers Association, and The American Veterinary Medical Association.

These and other components make this report the most thorough and comprehensive examination of the North America pet insurance market ever and a must-have for any company interested in capitalizing on this rapidly expanding industry, which is projected to chart double-digit gains through 2012.  
 

Chapter 1: Executive Summary

• Scope and Methodology
  
  
  
  
  
  • Market Definition
    
    
  • Report Methodology
    
    
  • Market Size Estimates
    
    
  • Consumer Trends
  
  
  
  
• Market Trends
  
  
  
  
  
  • North American Market Posts Double-Digit Growth
    
    
  • Figure 1-1: Share of North American Pet Insurance Market: United States vs. Canada, 2007 (percent)
    
    
  • Number of Policies in Force
    
    
  • North American Market at Pivotal Stage
    
    
  • Aging Pet Population Keeps Focus on Pet Health
    
    
  • Pet Humanization and Pampering
    
    
  • Looking Ahead
  
  
  
  
• Competitive Trends
  
  
  
  
  
  • Top North American Marketers
    
    
  • Figure 1-2: Estimated Share of North American Pet Insurance Market by Company, 2005-2007 (percent)
    
    
  • The New Competitive Landscape
    
    
  • Purina Set to Enter U.S. Market
    
    
  • The Underwriting Advantage
    
    
  • Seasoned Executives Form New Companies, Summit
    
    
  • The U.K. Influx
    
    
  • Simplification and Customization
    
    
  • High-Tech Backfilling—and “Forefilling”
  
  
  
  
• Consumer Trends
  
  
  
  
  
  • 52% of Households Keep Pets
    
    
  • Figure 1-3: Household Ownership Rates for Selected Pet-Owning Classifications, 2007 (percent of U.S. households)
    
    
  • Consumer Usage of Pet Insurance Usage

Chapter 2: Market Trends

• Introduction
  
  
  
  
  
  • Market Definition
    
    
  • Equine Insurance Excluded
    
    
  • Range of Coverage
    
    
  • Typical Restrictions
    
    
  • Other Services
    
    
  • Gross Written Premiums and Conversion Rates
  
  
  
  
• Market Size and Composition
  
  
  
  
  
  • North American Market Posts Double-Digit Growth
    
    
  • U.S. Pet Insurance Market Revenues
    
    
  • Table 2-1: North American Pet Insurance Market Revenues: United States, Canada, Total, 2003-2007 (in millions of U.S. dollars)
    
    
  • Canadian Pet Insurance Market Revenues
    
    
  • Figure 2-1: Share of North American Pet Insurance Market: United States vs. Canada, 2007 (percent)
    
    
  • Number of Policies in Force
    
    
  • Figure 2-2: North American Pet Insurance Market: Number of Pet Insurance Policies in Force, 2005-2007
    
    
  • Share of Policies by Animal Type
    
    
  • Figure 2-3: Share of U.S. Pet Insurance Market Revenues by Animal Type, 2007 (percent)
    
    
  • VPI Pinpoints Top 10 Pet Insurance Claims
  
  
  
  
• Market Outlook
  
  
  
  
  
  • North American Market at Pivotal Stage
    
    
  • Rising Veterinary Costs and Spending
    
    
  • Table 2-2: Caring for Pet’s Health: Veterinarian Visits, Expenses and Services Received, 2006 (number, percent and dollars)
    
    
  • Figure 2-4: Percentage of Dogs and Cats Given Medication and/or Drugs: 2000-2006 (percent)
    
    
  • Consumer Spending on Veterinary Services on the Ups
    
    
  • Table 2-3: Average Annual Consumer Expenditures on Veterinary Services, 1996-2006
    
    
  • Most Veterinarians Behind Pet Insurance
    
    
  • Aging Pet Population Keeps Focus on Pet Health
    
    
  • Figure 2-5: Distribution of $25.3 Billion U.S. Pet Healthcare Market, 2007 (percent)
    
    
  • Figure 2-6: Percentage Dogs, Cats and Horses Age 6 and Over, 1996 vs. 2006 (percent)
    
    
  • Pet Food Recall Puts Spotlight on Pet Health
    
    
  • Rising Rates of Pet Overweight, Obesity
    
    
  • Pet Humanization and Pampering
    
    
  • Table 2-4: Mean Number of Veterinary Visits by Human-Animal Bond Among Dog and Cat Households, 2006
    
    
  • Table 2-5: Mean Veterinary Expenditures by Human-Animal Bond Among Dog and Cat Households, 2006
    
    
  • Pet Population Trends Mostly Favorable
    
    
  • Table 2-6: Number of U.S. Households That Own a Pet: 1990-2006 (in millions)
    
    
  • At Least 39 Million Pet Households “Prime Prospects” for Pet Insurance
    
    
  • Table 2-7: Dog and Cat Owners by Level of Household Income, 2007 (percent, number of households and index)
    
    
  • Internet Popularity Among Pet Owners a Big Plus
    
    
  • Figure 2-7: Percentage Rates for Use/Influence of Internet: Overall Households vs. Dog- or Cat-Owning Households, 2007 (percent)
    
    
  • Media Perceptions Still a Mixed Bag
  
  
  
  
• Looking Ahead
  
  
  
  
  
  • More Competition and Consumer Awareness
    
    
  • Wal-Mart?
    
    
  • Effects of 2008 Recession
    
    
  • The Boomer Question
    
    
  • Figure 2-8: Projected Percentage Population Growth by Age Group, 2005-2015
    
    
  • Table 2-8: Pet Ownership Indices: By Adult Age Bracket, 2006 (indices of U.S. households)
    
    
  • Double-Digit Revenue Gains Expected to Continue
    
    
  • Table 2-9: Projected North American Pet Insurance Market Revenues: United States, Canada, Total, 2007-2012 (in millions of U.S. dollars)

Chapter 3: Competitive Trends

• Overview
  
  
  
  
  
  • Top North American Marketers
    
    
  • Table 3-1: North American Marketers of Pet Insurance, 2007
    
    
  • Figure 3-1: Estimated Share of North American Pet Insurance Market by Company, 2005-2007 (percent)
    
    
  • Figure 3-2: Estimated Share of U.S. Pet Insurance Market by Company, 2005-2007 (percent)
    
    
  • Figure 3-3: Estimated Share of Canadian Pet Insurance Market by Company, 2005 vs. 2007 (percent)
    
    
  • The New Competitive Landscape
    
    
  • Purina Set to Enter U.S. Market
    
    
  • The Underwriting Advantage
    
    
  • Company Snapshot: Trupanion/Vetinsurance
    
    
  • Seasoned Executives Form New Companies, Summit
    
    
  • Company Snapshot: Pets Best
    
    
  • The U.K. Influx
    
    
  • Company Snapshot: Fetch, Inc. (Petplan U.S.)
    
    
  • Simplification and Customization
    
    
  • Company Snapshot: Embrace Pet Insurance
    
    
  • High-Tech Backfilling—and “Forefilling”
    
    
  • Company Snapshot: EnsurApet
    
    
  • Outside Competition in the Form of Managed Care
    
    
  • Pet Assure
    
    
  • CareCredit
    
    
  • Pethealth
  
  
  
  
• Competitor Profile: Hartville Group, Inc.
  
  
  
  
  
  • Company Overview
    
    
  • Types of Plans
    
    
  • Management Shakeup Precedes Growth
    
    
  • Company Signs Deal with ASPCA
    
    
  • Hartville Doubles Premiums in 2007
    
    
  • Figure 3-4: Hartville Group Gross Written Pet Insurance Premiums, 2001-2007 (in millions of dollars)
    
    
  • Number of Active Policies up 101%
    
    
  • Figure 3-5: Hartville Group Number of Active Pet Insurance Policies, 2001-2007
    
    
  • Consumer Marketing
    
    
  • Looking Ahead
  
  
  
  
• Competitor Profile: PetFirst Healthcare LLC
  
  
  
  
  
  • Company Overview
    
    
  • Simple Pricing, Up Front
    
    
  • Figure 3-6: Monthly Premiums: PetFirst Comprehensive Pet Insurance Plans, 2007 (in dollars)
    
    
  • Online Policy Management
    
    
  • Retail Distribution Through Kroger, Others
    
    
  • Value Appeal
    
    
  • Financial Services as Store Loyalty Builder
    
    
  • Kroger Company Snapshot
    
    
  • Other Retail Partners
    
    
  • PetFirst Expands Company Benefits Business
    
    
  • Home Again
    
    
  • Looking Ahead
  
  
  
  
• Competitor Profile: Pethealth, Inc.
  
  
  
  
  
  • Company Overview
    
    
  • 24PetWatch Pet Registry Services
    
    
  • PetPoint Shelter Management Software
    
    
  • PawsConnect.com Social Networking Website
    
    
  • Steady Revenue Growth
    
    
  • Figure 3-7: Pethealth Revenues, 2001-2007 (in millions of Canadian dollars)
    
    
  • Pet Insurance Performance
    
    
  • Figure 3-8: Pethealth Pet Insurance Gross Written Premiums, 2001-2007 (in millions of U.S. dollars)
    
    
  • Number of Policies
    
    
  • Figure 3-9: Number of Pethealth Pet Insurance Policies in Force, 2001-2007
    
    
  • United States v. Canada
    
    
  • Figure 3-10: Share of Pethealth Pet Insurance Gross Written Premiums: U.S. vs. Canada, 2005-2007 (percent)
    
    
  • Pet Insurance Programs and Marketing
    
    
  • Distribution Channels
    
    
  • Underwriting Participation
    
    
  • Company Adds Maintenance Coverage
    
    
  • Company Extends Petco Pact
    
    
  • Company Teams up with H-E-B
    
    
  • Company Expanding Buckslip Technology
    
    
  • EVE Online Claims Processing
    
    
  • Company Moves into Managed Care
    
    
  • Looking Ahead
  
  
  
  
• Competitor Profile: PetPartners, Inc.
  
  
  
  
  
  • Company Background
    
    
  • Company Strategy
    
    
  • Policy Types
    
    
  • Looking Ahead
  
  
  
  
• Competitor Profile: SecuriCan General Insurance Company
  
  
  
  
  
  • Company Background
    
    
  • HED (Hayhurst Elias Dudek, Inc.)
    
    
  • Premiums, Policies Rising at Double-Digit Rates
    
    
  • Figure 3-11: SecuriCan Pet Insurance Gross Written Premiums, 2003-2007 (in millions of U.S. dollars)
    
    
  • Figure 3-12: SecuriCan Pet Insurance Number of Active Policies, 2005-2007
    
    
  • Petplan: SecuriCan’s Flagship Brand
    
    
  • Marketing Venues
    
    
  • SecuriCan Launches PurinaCare Brand
    
    
  • PC Financial Brand Targets Loblaw Supermarket Crowd
    
    
  • CAA Brand Reserved for Auto Club Members
    
    
  • Strategic Alliances
    
    
  • Looking Ahead
  
  
  
  
• Competitor Profile: Veterinary Pet Insurance Co.
  
  
  
  
  
  • Company Overview
    
    
  • Recent Company Milestones
    
    
  • Policy Types
    
    
  • Emphasizing WellCare
    
    
  • Commitment to Benefits Schedule
    
    
  • Belief in Indemnity Insurance
    
    
  • Adherence to Regulation
    
    
  • 2007 Revenues of $150 Million
    
    
  • Table 3-2: Veterinary Pet Insurance Gross Written Premiums, 1998-2007 (in millions of dollars)
    
    
  • Figure 3-13: Share of Veterinary Pet Insurance Gross Written Premiums by Policy/Rider Type, 2004-2007 (percent)
    
    
  • Consumer Advertising Targets Niche Markets
    
    
  • Table 3-3: National Consumer Advertising Expenditures by Veterinary Pet Insurance, 2000-2006 (in thousands)
    
    
  • “Family Redefined” Campaign Expanded
    
    
  • Public Relations Mix “Fun Facts” with Valuable Pet Health Tips
    
    
  • Web-Based Marketing and Support
    
    
  • Working with Iams
    
    
  • Veterinary Channel Remains VPI Stronghold
    
    
  • Industry Leader in Voluntary Benefits Arena
    
    
  • Looking Ahead

Chapter 4: Consumer Trends

• Pet Ownership Overview
  
  
  
  
  
  • Methodology and Data Sources
    
    
  • 52% of Households Keep Pets
    
    
  • Figure 4-1: Household Ownership Rates for Selected Pet-Owning Classifications, 2007 (percent of U.S. households)
    
    
  • Table 4-1: Household Penetration Rates for Selected Dog- or Cat-Owning Classifications, 2005 vs. 2007 (percent of U.S. households)
    
    
  • Pet Owner Demographics
    
    
  • Dog and Cat Owner Demographics
    
    
  • Table 4-2: Demographics for Pet Ownership, 2007 (percent, number and index of U.S. pet-owning households)
    
    
  • Table 4-3: Demographics for Dog or Cat Ownership, 2007 (percent, number of households, and index)
    
    
  • Table 4-4: Demographics for Dog Ownership, 2007 (percent, number of households, and index)
    
    
  • Table 4-5: Demographics for Keeping One Pet Dog, 2007 (percent, number of households, and index)
    
    
  • Table 4-6: Demographics for Keeping Two or More Pet Dogs, 2007 (percent, number of households, and index)
    
    
  • Table 4-7: Demographics for Cat Ownership, 2007 (percent, number of households, and index)
    
    
  • Table 4-8: Demographics for Keeping One Pet Cat, 2007 (percent, number of households, and index)
    
    
  • Table 4-9: Demographics for Keeping Two or More Pet Cats, 2007 (percent, number of households, and index)
    
    
  • Table 4-10: Demographics for Keeping Pet Dogs and Cats, 2007 (percent, number of households, and index)
  
  
  
  
• Pet Owners and Insurance
  
  
  
  
  
  • APPMA Consumer Survey Charts Pet Insurance Usage
    
    
  • The Dog Insurance Purchaser
    
    
  • The Cat Insurance Purchaser
    
    
  • Pet Owners Out Front for Many Types of Insurance
    
    
  • Pet Owners on the Web
    
    
  • Table 4-11: Demographic Characteristics for Purchasing of Dog Insurance, 2007 (percent of U.S. adults)
    
    
  • Table 4-12: Top Demographic Characteristics Favoring Purchasing of Cat Insurance, 2007 (percent of U.S. adults)
    
    
  • Table 4-13a: Penetration Rates for Selected Types of Insurance: Overall Households vs. Dog- or Cat-Owning Households, 2007 (percent)
    
    
  • Table 4-13b: Indices for Selected Types of Insurance: Overall Households vs. Dog- or Cat-Owning Households, 2007
    
    
  • Table 4-14a: Percentage Rates for Use/Influence of Internet: Overall Households vs. Dog- or Cat-Owning Households, 2007
    
    
  • Table 4-14b: Indices for Use/Influence of Internet: Overall Households vs. Dog- or Cat-Owning Households, 2007

Appendix: North American Pet Insurance Providers