The trend toward more sophisticated veterinary treatments has increased the financial incentive for pet owners to take out industry coverage.
(PRWEB) April 17, 2015
Despite accounting for only a marginal portion of the broader Property, Casualty and Direct Insurance industry, rapidly increasing consumer awareness and acceptance of industry offerings has benefited the Pet Insurance industry substantially over the five-year period. According to the latest available data from the Department of Clinical Veterinary Science and the Pet Food Institute, 30.0% of pets in Sweden and 23.0% of pets in the United Kingdom are covered by pet insurance policies. Alternatively, only 1.0% of domestic pets are insured; yet, this figure continues to rise and will provide the basis for sustained industry growth. More specifically, over the five years to 2015, industry revenue is anticipated to rise at an annualized rate of 10.9% to reach $721.0 million; this growth includes an expected 12.6% increase in revenue in 2015 alone.
According to IBISWorld Industry Analyst Stephen Hoopes, “Pet insurers largely face the same regulatory trends as their broader property and casualty counterparts, given that pets are considered property in the view of government regulators. However, pet insurance risks and trends tend to be more similar to the health insurance market.” For example, the cost of obtaining treatment in both markets has consistently increased at a faster pace than inflation. For veterinary costs in particular, expenditures have risen due to both advancements in medicine and increased utilization of care. According to industry operator Trupanion, more expensive and sophisticated treatments are gaining acceptance, including radiation therapy, CT scans, transplants and chemotherapy. “The trend toward more sophisticated veterinary treatments has increased the financial incentive for pet owners to take out industry coverage,” says Hoopes. “At the same time, extensive marketing efforts have expanded consumer awareness of pet insurance policy options.”
Over the five years to 2020, industry revenue is forecast to continue growing. Key fundamental and demographic variables underlying the industry's performance are anticipated to improve in the years ahead. For example, the number of pets is anticipated to rise, while homeownership rates are forecast to rebound from consistent decreases in recent years. Yet, the industry's market share concentration is anticipated to continue rising over the five years to 2020, as mounting consumer acceptance of industry offerings is expected to benefit well-branded insurers more than their smaller counterparts.
For more information, visit IBISWorld’s Pet Insurance in the US industry report page.
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IBISWorld industry Report Key Topics
This industry underwrites insurance policies for pets and pays veterinary costs related to illness or injury.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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