While ranting and raving continues unabated over health care reform, that debate has focused on the needs of humans. But what about pets?
According to TheStreet.Com, the health insurance market for animals is set to expand as veterinary costs rise and consumers spend more on their pets. While less than 1 percent of owners own health insurance policies for their pets, those in the marketplace see it as a profitable niche that’s likely to grow.
Even Warren Buffet has jumped into the game. On Oct. 1, Central States Indemnity of Omaha, a Berkshire Hathaway company, announced a partnership with Nestle to market pet-centric insurance options, TheStreet.Com reports.
Purina, a unit of Nestle, launched a pet health insurance division in June 2008. Central States will underwrite its plans. Other big companies have jumped into the market.
In July, Aetna joined forces with pet insurance provider Pets Best Insurance Services to provide 50,000 businesses and 79 working Chambers of Commerce in Connecticut and Western Massachusetts discounted rates on pet insurance plans. Progressive has promoted a policy perk that covers pets injured in auto accidents up to $1,000.
While interest in pet insurance has been weak in the U.S. until recently, the plans have been more popular in Europe. In Sweden, half of pet owners insure their animals. In the U.K., 20 percent of owners hold such plans. Spending trends suggest that Americans are poised to catch up.
According to the American Veterinary Medical Association, approximately 60 percent of U.S. households have at least one pet and there are more than 72 million dogs and nearly 82 million cats in the U.S. Pet-related expenditures in 2009 are expected to reach $45 billion, $25 billion of which will be spent on veterinary medicine. There are approximately 850,000 active pet health insurance policies in this country.
“Pets are becoming more and more important to people and they are looking at them more as family members,” says David Goodnight, president of Purina Care Health Insurance. “The other factor is that we are seeing a rapid increase, really an explosion, in the cost of veterinary care because of new technologies and the procedures.”
That means that cancer treatments and hip replacements, once dealt with by euthanasia, are now treated at a hefty cost.
Goodnight describes the U.S. pet insurance market as “very underdeveloped.”
