The global pet insurance market size was valued at USD 6.18 billion in 2023. It is estimated to reach USD 24.05 billion by 2032, growing at a CAGR of 16.3% during the forecast period (2024–2032). The projected expansion of the global market can be attributed mostly to the rise in the population of companion animals. Additionally, in the past few years, there has also been a surge in the health issues faced by pets, in turn augmenting the global market for pet insurance. Furthermore, the exorbitant price of veterinary care nowadays compels pet owners to buy insurance for their pets, thereby creating opportunities for global market expansion.
Pet insurance provides, in whole or in part, the veterinary care of a sick or injured pet owned by the insured. Some policies will pay out if the creature is lost or stolen or if it passes away. It is a policy purchased by a pet owner that reduces the overall expense of expensive veterinary care. This coverage is comparable to human health insurance policies.
Veterinary procedures are frequently costly, but pet insurance will pay for all or a portion. Evaluating and comparing pet insurance plans is necessary to locate the ideal policy. Pet insurance typically includes a deductible and out-of-pocket expenses like human health insurance before coverage begins. Most providers base the premium on the typical cost of veterinarian treatment in the owner's area. Moreover, not all veterinary services may be covered by the policy.
The increasing companion animal population is a significant driver for the global market. According to the American Pet Products Association (APPA), the number of households owning pets in the United States rose to 70% in 2023, up from 67% in 2022. This trend is further supported by the American Veterinary Medical Association (AVMA), which reported that pet ownership increased by 4.2% in 2023 compared to 2022. The growing pet population can be attributed to factors such as changing societal attitudes towards pets as family members and the rising popularity of pet ownership among millennials and Generation Z.
As pet ownership grows, so does the demand for comprehensive pet healthcare services, including insurance coverage. The North American Pet Health Insurance Association (NAPHIA) revealed that the number of insured pets in the US and Canada increased by 18% in 2023, compared to 13% in 2022. This surge in demand is driven by pet owners' desire to ensure their companions receive optimal medical care without facing financial strain, particularly for costly procedures or chronic conditions.
The increase in pet-related health issues is a significant driver for the market for pet insurance. According to the American Animal Hospital Association (AAHA), the incidence of chronic diseases such as diabetes, arthritis, and cancer among pets has risen by 8% in 2023 compared to 2022. This trend can be attributed to factors like obesity, sedentary lifestyles, and longer lifespans of pets due to better veterinary care. Furthermore, the American Kennel Club (AKC) reported a 12% increase in the number of genetic disorders diagnosed in purebred dogs in 2023, up from 9% in 2022.
These genetic conditions often require extensive and costly medical treatments, prompting pet owners to seek insurance coverage for financial protection. The American Veterinary Medical Association (AVMA) also noted a 6% rise in the number of pet injuries and accidents in 2023, compared to 4% in 2022, driven by factors such as increased outdoor activities and encounters with other animals or vehicles. These unexpected incidents can result in significant veterinary expenses, highlighting the importance of pet insurance for pet owners.
The lack of knowledge among pet owners regarding pet insurance and its benefits acts as a significant restraint in the global market. A survey conducted by the North American Pet Health Insurance Association (NAPHIA) revealed that 49% of pet owners were unaware of the availability of pet insurance in 2023, a slight improvement from 52% in 2022. This lack of awareness can be attributed to factors such as limited marketing efforts by insurance providers and a general misconception that pet healthcare costs are manageable without insurance coverage.
Furthermore, a study by the American Pet Products Association (APPA) found that 38% of pet owners did not fully understand the coverage and exclusions of pet insurance policies in 2023, compared to 42% in 2022. This lack of knowledge can lead to confusion and uncertainty about the value proposition of pet insurance, hindering its adoption among potential customers. The American Veterinary Medical Association (AVMA) also reported that 27% of pet owners believed pet insurance to be too expensive in 2023, up from 24% in 2022, indicating a need for better education on the long-term cost savings and financial protection offered by these policies.
The demand for veterinary healthcare services is expected to rise as the number of companion animals increases. The need for veterinary doctors, qualified technicians, and specialized diagnostic tools drives up the cost of veterinary care. According to the 2018 American Pet Products Association Report, veterinary care spending surged by 7%, to USD 17.07 billion in 2017 from USD 15.95 billion in 2016. These costs prompt pet owners to look for ways to decrease their personal spending on veterinarian care.
Prominent pet insurance providers offer coverage for major illnesses in dogs and cats, with the exception of preexisting conditions. Insurance available in the market offers a minimum coverage of 60% of veterinary expenses, which can alleviate financial burden for pet owners. The number of surgeries performed on animals has surged in the recent past. Surgery, hospitalization, post-surgery follow-up, and medication costs can create major financial pressure on pet owners. Among these, the high cost associated with surgery is anticipated to compel a higher number of pet owners to avail of pet insurance. Thus, the high veterinary costs have created opportunities for pet insurance market growth.
| Study Period | 2020-2032 | CAGR | 16.3% |
| Historical Period | 2020-2022 | Forecast Period | 2024-2032 |
| Base Year | 2023 | Base Year Market Size | USD 6.18 billion |
| Forecast Year | 2032 | Forecast Year Market Size | USD 24.05 billion |
| Largest Market | North America | Fastest Growing Market | Europe |
Based on region, the global pet insurance market share is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.
In the North American region, the market holds a dominant position and is poised for significant expansion throughout the forecast period. This growth is primarily driven by high pet ownership rates, escalating veterinary costs, and an increasing awareness of the benefits of pet insurance. According to the North American Pet Health Insurance Association (NAPHIA), the number of insured pets in the United States and Canada surged to 3.9 million in 2023, marking a notable increase from 3.1 million in 2022. This rise in insured pets reflects a growing trend among pet owners to seek financial protection for their animals. In the United States, pet ownership rates have reached new heights, with the American Pet Products Association (APPA) reporting that 70% of households owned pets in 2023, up from 67% in 2022. This high level of pet ownership, combined with rising veterinary costs, has significantly boosted the demand for pet insurance.
The American Veterinary Medical Association (AVMA) highlighted that the average cost of a routine veterinary visit increased by 4.8% in 2023, compared to 3.2% in 2022. This uptick in veterinary expenses underscores the growing appeal of pet insurance as a financial safeguard for pet owners. Furthermore, the North American pet insurance industry benefits from a robust presence of established insurance providers and an increasing level of consumer awareness. The American Animal Hospital Association (AAHA) reported that 62% of pet owners were aware of pet insurance in 2023, up from 56% in 2022. This rising awareness indicates a positive shift towards greater adoption and utilization of pet insurance products in the region.
Europe has emerged as a significant player in the global market, driven by rising pet ownership, escalating veterinary costs, and supportive government policies. The European Pet Food Industry Federation (FEDIAF) reports a 3.6% increase in households with pets in 2023, up from 2.9% in 2022. This rise in pet ownership has boosted the demand for pet insurance, evidenced by a growth in insured pets from 5.4 million in 2022 to 6.2 million in 2023, as reported by the European Pet Insurance Association (EPIA).
Concurrently, the Federation of Veterinarians of Europe (FVE) noted a 5.1% rise in average veterinary costs in 2023, compared to 4.3% the previous year. This uptick in veterinary expenses underscores the need for insurance coverage. Additionally, government initiatives across Europe are fostering responsible pet ownership and encouraging insurance uptake. For example, the UK's Department for Environment, Food and Rural Affairs (DEFRA) actively promotes pet insurance to mitigate unforeseen veterinary costs. These combined factors contribute to Europe’s growing prominence in the pet insurance sector, making it a key region in the global market.
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The global market is bifurcated into lifetime coverage and accident only. The lifetime coverage segment dominates the global market over the forecast period. Key drivers of the lifetime coverage segment are the high cost of diagnosis and treatment, the rise in the companion animal population, and increased awareness about pet insurance. Contractual policies cover accidents and illnesses and the cost of surgery and hospitalization, whereas lifetime pet insurance covers companion animals for a lifetime and is comparatively more expensive. However, this is the most favorable pet insurance policy for young animals. Key players in the market are Figo Pet Insurance, Nationwide, Pet Assure, Healthy Paws Pet Insurance, Embrace Pet Insurance, and Petplan.
The global market is divided into dogs, cats, and others. The dog segment has been the largest revenue contributor to the market over the forecast period. An increase in dog ownership worldwide is the key driver of the segment. The increasing importance of pet health and high veterinary healthcare costs are expected to aid further market growth. As per the North American Pet Health Insurance Association (NAPHIA), in 2017, 89.7 million dogs in the U.S. Rabies, parvovirus, kennel cough, heartworm, diabetes, and cancer are major diseases and disorders reported in dogs. Additionally, the companies in this segment focus on reducing premium costs through innovative methods to track pet health. For instance, in April 2019, MoreThan, a Royal and Sun Alliance-backed insurance technology company, launched a dog fitness tracker in collaboration with Pitpat.
The global market is segmented into agency, broker, bancassurance, and direct sales channels. The pet insurance industry is dominated by the direct sales segment because of its capacity to provide customized services, affordable rates, and adaptable policy alternatives. The insurance company and the client deal directly in direct sales, frequently over the phone or in person. This strategy creates long-lasting relationships with clients, which promotes trust and loyalty. Insurance companies may stand out from the competition by offering versatile insurance options and affordable pricing, which will draw in more clients. The popularity of direct sales has increased due to the emergence of digital platforms, which has allowed insurance companies to save expenses, simplify operations, and provide customers with more effective services.
