Pet Insurance in the Age of Aggressiveness

The pet insurance industry has seen a lot of moves and countermoves during the last several years. Major partnerships were announced between Nationwide and Petco, and Lemonade and Chewy. We’ve also seen some big acquisitions. JAB Holding Company reached a deal in 2022 to acquire Fairfax’s interests in Crum & Forster Pet Insurance Group for $1.4 billion. The holding company also acquired pet insurance startup Figo in 2021. Another significant deal involved MetLife and PetFirst. The insurer shared plans to enter the space as an underwriter and leverage its group benefits position to reach approximately 41 million employees and dependents across the country. 

With such activity comes growth, and 2022 written premiums in North America have reached $3.51 billion (a 23.5% increase from $2.84 billion in 2021) and up from just over $1 billion in 2017, according to the North American Pet Health Insurance Association (NAPHIA). They say the first million is the hardest. Perhaps it is also true for the first billion, after all, it has been a long journey since Nationwide issued the first U.S. pet insurance policy to Lassie in 1982. 

The growing pet insurance market presents a compelling opportunity for companies. Of course, this line of business has its challenges, but unlike other coverages, insurers operating in the space don’t have to worry about messy claims or natural catastrophes – “pet health is not subject to large catastrophic events and large claims that cause large fluctuations in loss ratio,” states pet insurer Independence American Insurance Company. With that said, focusing just on pet insurance may cause insurers to miss out on an even greater opportunity – going beyond pet insurance. 

This report will examine the pet insurance market as well as the greater pet market, providing insights to market participants, whose role is to act, more than react, and do their best to not overreact.