Ensurapet, Inc. (fka EPTI)

[GreatSuccess]

Niche pet insurance market not a pup for long
April 14, 2008 at 1:23 pm By: Brigid Gaffikin Category: General


http://markets-hub.com/2008/04/14/niche-pet-insurance-market-not-a-pup-for-long/

Some pet owners might be surprised to learn pets are, legally, considered property of their owners. But when it comes time to pay vet bills there may be advantages to lumping Fido and Fluffy with the car and washing machine. Pet owners who might otherwise have to fork out large sums to restore ailing animals to good health can take out what is effectively property and casualty insurance coverage to affray their companions’ health care expenses.

Pet insurance in North America remains a niche market and has some way to go before it catches up with its British counterpart, which provides coverage for around a fifth of pets in the U.K., according to a recent Packaged Facts report, “Pet Insurance in North America.”

While about 52% of U.S. households, or 58.1 million, keep pets, few are insured. Today, only about 3.3% of dog owners and 0.4% of cat owners say they have bought insurance coverage for their pets, Packaged Facts found.

But the market for pet insurance is growing at a fast clip. Gross written premiums, a revenue measure, rose to $248 million in 2007 in North America, up 21% from $205 million in 2006, and have grown 56% since 2003, the research group said. Packaged Facts sees the market continuing to grow over the next five years, and estimates sales of as much as $1.1 billion in 2012 across the U.S. and Canada.

The influx of new players into the pet insurance arena is one indicator of the growth—and apparent growth potential—of the market. Since 2005 more than six new pet insurance companies have begun offering coverage in the two countries. Veterinary Pet Insurance, with its 60% gross written premium market share in North America (and its 71% share in the U.S. alone), still dominates the field.

Services offered by the different providers range from simplified to highly customizable plans, Packaged Facts said.

Insurance firms are also drawing awareness to the market by partnering with known pet names like Purina, the American Kennel Club and the ASPCA to sell insurance products branded with the more familiar monikers. In 2006 supermarket chain Kroger even began offering pet health care coverage, the report said.

Another famous name, Purina, is expanding its Canadian PurinaCare products into the U.S. this spring, an indicator of more cross-over between the U.S. and Canadian pet insurance markets, the report said. Childless couples and “modest-income” younger and older women are leading the way in buying pet coverage. Pet owners over 65 are among those least likely to buy insurance, the report found.

The research group noted that average per-household spending on pet health rose 84.4% between 1996 and 2006.

William Blair & Co.’s recent 2008 veterinarian survey echoed that view. “The industry appears to be in the early stages of a broad macro trend toward providing more advanced medical care for companion animals,” analyst Ryan Daniels wrote in a note to clients Thursday.

That trend could be expected to benefit insurers – Daniels said veterinary health care is “an attractive investment alternative to human health care” in part because the animal health care industry is not subject to the broader risks, including entanglements between insurers, providers, patients (or their owners) and the government, that face the (human) health care setting in the U.S.





All the above is my own opinion please do your own DD.