In 2019, 84.9 million households owned at least one pet in the United States with 63.4 million households owning dogs and 42.7 households owning cats. At some time in their lives most, if not all, of these pets will need medical care, whether that be spaying or neutering, routine physical exams and immunizations, or more specialized care. Veterinary care is expensive. Pet owners reported paying an average of $160 per year for routine exams for cats and $212 for dogs. Average surgical costs climb into the hundreds, with some types of specialized care, such as chemotherapy for cancer or cataract surgery, costing thousands of dollars. Add to that the cost of medications and some pet parents may need to spend upwards of several hundred to several thousand dollars a year to keep their pets healthy. Overall, in 2019, pet parents spent an estimated $29.3 billion on veterinary care in the U.S., up from $27.7 billion in 2018.¹ Knowing that pet health care is expensive, an increasing number of pet parents are buying pet insurance policies.

Today’s market size shows the total amount of premiums paid for pet health insurance in 2014 and 2018 and projected for 2022 in the United States. The first animal insurance policy was written in Sweden in 1890. At the time, coverage focused on horses and livestock. In the United States, TV star Lassie received the first pet insurance policy in 1982. By 2018, 2.16 million pets were insured, an 18% increase from the year before. An overwhelming majority of policies, 98%, were accident and illness plans or insurance with embedded wellness plans. Premiums for accident and illness plans averaged $529 per year. The other two percent were accident-only policies, with premiums averaging $177 per year. In North America, 88.9% of policies provide coverage for dogs.

The pet health insurance market will continue to grow according to a report² by the research firm Packaged Facts. Insurance companies’ use of their websites and social media for marketing as well as partnerships with veterinarians, animal shelters and breeders are expected to increase consumer awareness of insurance offerings and discounts. The use of technology to handle customer interactions more efficiently as well as expanding coverage to pets other than cats and dogs will also contribute to future growth in the industry according to the report.

¹ Figures are for veterinary care and product sales. According to the American Pet Products Association: “In addition to routine veterinary care, surgical procedures and sales of pharmaceuticals and other products through veterinary clinics are now included. With clinics appearing in major retailers’ stores and veterinary telemedicine platforms on the rise, veterinary services are becoming more accessible.”
² Pet Insurance in the U.S., 6th Edition

Geographic reference: United States
Year: 2014, 2018 and 2022
Market size: $588.4 million, $1.30 billion and $2 billion, respectively
Sources: State of the Industry Report 2019, North American Pet Health Insurance Association, June 11, 2019 available online here; “Five Trends That Will Double The U.S. Pet Health Insurance Market by 2022,” Veterinary Practice News, October 6, 2018 available online here; “Pet Industry Market Size & Ownership Statistics,” American Pet Products Association available online here; “Americans’ Pet Spending Reaches Record-Breaking High: $95.7 Billion,” American Pet Products Association Press Release, February 27, 2020 available online here; “History of Pet Health Insurance,” North American Pet Health Insurance Association available online here; Grace Schneider, “Pet Insurance Company Success is Off the Leash,” USA Today for the Lansing State Journal, February 27, 2019, page 3B.
Image source: Seaq68, “nature-friends-dog-pet-woman-suit-3042751,” Pixabay, December 27, 2017 available online here.