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Pet Insurance in North America, 5th Edition

Now in its fifth edition, Packaged Facts' Pet Insurance in North America is the most comprehensive examination of the U.S. and Canadian pet insurance markets available and a must-have for any company interested in this dynamic industry. Revenues (measured as gross written premiums) remained in the double digits in 2013, while showing robust growth over the previous five years, recession notwithstanding. Packaged Facts expects the North American market for pet insurance to continue to chart strong annual gains over the next five years, with the high level of competitive activity generating increased awareness and demand among pet owners.

Industry pioneer Veterinary Pet Insurance (VPI) continues to lead the market. However, both the U.S. and the Canadian pet insurance markets have experienced significant market share shifts during the past five years as newer entrants have gained traction and made huge inroads into the business. The industry has been good to new entrants including Trupanion, PetPlan and PetFirst, while two smaller players-PurinaCare and PetSafe-have left the scene (with PurinaCare's policies acquired by Pethealth). The industry has also seen some changes in ownership and financial backing, strengthening the prospects of companies including Embrace, Hartville, Trupanion and Western Financial.

This latest edition of Packaged Facts' groundbreaking 2003 report offers a road map for competing in this market both now and in the years ahead. This edition includes expanded coverage of alternative payment options and competitive forces (e.g., Banfield, Pet Assure, pet savings accounts), the impact of word of mouth and social media, more detail about the Canadian market, and meticulous discussions and examples of competitors' marketing and go-to-market strategies. Every pet insurance player is profiled in depth, including Embrace, Fetch (Petplan), Hartville (ASPCA), Healthy Paws, PetFirst, Pethealth, PetPartners (AKC), PetPremium, Pets Best, Pets Plus Us, Protect Your Bubble, Trupanion, Western Financial (Petsecure), and VPI. Statistics provided include historical and projected market revenues, number of policies in force, and company shares (both U.S. and Canadian), along with profiles of pet owners and pet insurance purchasers, based on data from sources including Simmons and Packaged Facts own pet owner surveys.

Table of Contents

Chapter 1: Executive Summary

  • Introduction
    • Scope of Report
    • Report Methodology
      • Market Analysis
      • Consumer Analysis
  • Market Trends
    • North American Market Growth Continues
    • Figure 1-1: Projected North American Pet Insurance Market Revenues:
    • United States, Canada, and North America, 2013 vs. 2018 (in millions of U.S. dollars)
    • Number of Policies in Force
    • Cautiously Optimistic Consumers
    • Table 1-1: Economic Outlook of U.S. Pet Households: 2009 vs. 2013
    • Vet Costs Rising
    • Veterinarians Increasingly Supporting Pet Insurance
    • Consumers Aware But Some Confused
    • Getting the Word Out
    • Pet Health Insurance Month
  • Competitive Overview
    • Top North American Marketers
    • A New Ball Game
    • Figure 1-2: Pioneers vs. Upstarts-Change in North American Pet Insurance Market, 2005-2013
    • Four Main Distribution Channels
    • The Underwriting Advantage
    • Pethealth Buys PurinaCare's Pet Insurance Assets
    • Protect Your Bubble Crosses the Ocean
    • Pets Plus Us Debuts in Canada
    • PetPremium Enters the Fray
    • Walmart Throws Hat in Ring
    • Cross Border Activity Intensifies
    • Myriad Competitive Payment Options
  • Consumer Trends
    • Growth in Pet Households Outpacing Overall Household Growth
    • Figure 1-3: Household Ownership Rates for Selected Pet-Owning
    • Classifications, 2013 (percent of U.S. households)
    • Penetration Rates for Pet Insurance
    • Awareness of Pet Insurance
    • Top Reasons for Never Having or Discontinuation of Pet Insurance Policies

Chapter 2 Highlights

Chapter 2: Market Trends

  • Introduction
    • Market Definition
    • Equine Insurance Excluded
    • Range of Coverage
    • Typical Restrictions
    • Gross Written Premiums and Conversion Rates
  • Market Size and Composition
    • North American Market Growth Continues
    • Table 2-1: North American Pet Insurance Market Revenues: United States, Canada, and North America, 2005-2013 (in millions of U.S. dollars)
    • Figure 2-1: Share of North American Pet Insurance Market: United States vs. Canada, 2002-2013 (percent)
    • Number of Policies in Force
    • Figure 2-2: North American Pet Insurance Market: Number of Pet Insurance
    • Policies in Force, 2005-2013 (in thousands)
    • Share of Policies by Animal Type
    • Figure 2-3: Share of U.S. Pet Insurance Market Revenues by Animal Type, 2013 (percent)
  • Market Outlook
    • Cautiously Optimistic Consumers
    • Table 2-2: Selected U.S. Economic Measures: 2008-2013 (percent and number in millions)
    • Pet Owners Still Spending Less
    • Table 2-3: Level of Agreement with Statement: “I am spending less on pet products because of the economy,” 2010-2013 (percent)
    • Table 2-4: Economic Mood of U.S. Pet Households: 2009 vs. 2013
    • Table 2-5: Economic Outlook of U.S. Pet Households: 2009 vs. 2013
    • Table 2-6: Percentage of Dog and Cat Owners Who Have Visited
    • Vet in Past Year: Routine Checkup vs. Sick/Emergency Care, September 2011 vs. March 2012
    • Vet Costs Rising
    • Table 2-7: Average U.S. Household Expenditures on Veterinary Services, 1998-2011 (in dollars)
    • Veterinarians Increasingly Supporting Pet Insurance
    • Figure 2-4: Percentage of Veterinarians Who Would Like to See Wider
    • Use of Pet insurance by Year of Veterinary School Graduation
    • Consumers Aware But Some Confused
    • Getting the Word Out
    • Pet Health Insurance Month
    • Illustration 2-1: Pets Plus Us "Proof Positive Photo Contest," during
    • Pet Health Insurance Month, September 2013
    • North American Pet Health Insurance Association (NAPHIA)
    • Pets as Family Trend Continues
    • Table 2-8: Pet Owner Attitudes and Behavior Characterizing
    • Human/Animal Bond, 2013 (percent)
    • Human/Animal Bond Bolsters Pet Health/Wellness Spending
    • Table 2-9: Level of Veterinary Expenditures by Human-Animal Bond and Animal Type, 2011 (mean dollar per household)
    • Table 2-10: Mean Number of Veterinary Visits: By Human/Animal Bond Among Dog and Cat Households, 2011
    • Figure 2-5: Level of Agreement with Statement: “I buy pet supplements and/or functional treats to make doubly sure that my pet gets all the special nutrition it needs,” 2012 (percent)
    • Pet Ownership and Population Trends
    • Table 2-11: APPA's Total Number of Dogs and Cats in the United States: By Type, 2000-2012
    • Table 2-12: Changes in the U.S. Population and Pet-Owning Population, 1996-2012 (number and percent)
    • Table 2-13: Household Penetration Rates for Selected Dog- or Cat-Owning
    • Classifications: 2007-2012 (percent of U.S. households)
    • Table 2-14: Dog or Cat Ownership Rates by Age Bracket: 2007-2012 (percent of U.S. households)
    • Shoppers Buying More Pet Products Online
    • Figure 2-6: Level of Agreement with Statement: “I am buying pet products online more than I used to,” March 2012 vs. March 2013 (percent)
    • Figure 2-7: Time Frame for Most Recent Online Purchase of Pet Products,
    • March 2013 (percent of pet owners)
    • Table 2-15: Selected Internet-Related Psychographics: Dog Owners vs.
    • Cat Owners vs. Other Pet Owners, 2013 (percent and index)
    • Table 2-16: Age of Dogs and Cats, 2013 (percent of pet owners)
    • Figure 2-8: Percentage of Dogs and Cats Age 6 and Over: 1987 vs. 2011 (percent)
    • Table 2-17: Percentage and Number of Overweight and Obese Dogs and Cats, 2012
    • Figure 2-9: Level of Agreement with Statement: “I have an overweight pet,” 2013 (percent)
    • Increased Competition
    • Credit Card Usage Shows Big Drops
    • Table 2-18: Credit Card Ownership and Usage: By Frequency, 2008-2013 (percent)
    • Looking Ahead
    • Figure 2-10: Projected North American Pet Insurance Market Revenues:
    • United States, Canada, and North America, 2013 vs. 2018 (in millions of dollars)

Chapter 3 Highlights

Chapter 3: Competitive Overview

  • Market Share Trends
    • Top North American Marketers
    • Table 3-1: Estimated Share of North American Pet Insurance Market: By Company, 2005-2013 (percent)
    • Figure 3-1: Estimated Share of North American Pet Insurance Market, 2013 (percent)
    • Table 3-2: Estimated Share of U.S. Pet Insurance Market: By Company, 2005-2013 (percent)
    • Table 3-3: Estimated Share of Canadian Pet Insurance Market: By Company, 2005-2013 (percent)
  • Competitive Trends
    • A New Ball Game
    • Figure 3-2: Pioneers vs. Upstarts-Change in North American Pet
    • Insurance Market, 2005-2013
    • Consistent Marketing Messages
    • Four Main Distribution Channels
    • The Underwriting Advantage
    • Pethealth Buys PurinaCare's Pet Insurance Assets
    • Illustration 3-1: PurinaCare Screenshot, captured August 15, 2013
    • PetSafe Enters, Quickly Exits
    • Illustration 3-2: 2011 Ad for PetSafe's Sporting Dog Insurance
    • Protect Your Bubble Crosses the Ocean
    • Illustration 3-3: Screenshot of Protect Your Bubble USA TV ad, uploaded April 24, 2012
    • Pets Plus Us Debuts
    • PetPremium Enters the Fray
    • Illustration 3-4: Facebook photo of PetPremium cake at company's visit to Hartville, September 27, 2013
    • Walmart Throws Hat in Ring
    • Illustration 3-5: Screenshot of Walmart Pet Health Insurance website, captured August 27, 2013
    • Cross Border Activity Intensifies
    • Illustration 3-6: PetFirst Canada notice, as of August 16, 2013
    • British Software Invasion
    • Review and Comparison Sites Driving Awareness, Business
    • Illustration 3-7: Pet Insurance Guide podcast image
    • Insurers Embrace Social Media
    • Table 3-4: Social Media Activity in the Pet Insurance/Healthcare Payment Arena, 2013
    • The Industry Gets Interactive
    • Illustration 3-8: Screenshot of interactive map supplement to “Pet Insurance
    • Conversations” article from Veterinary Economics, May 2013
    • Employees Benefit from Pet Insurance
    • Illustration 3-9: VPI ad in Society for Human Resource Management
    • 2013 Annual Conference & Exposition publication, June 2013
    • Myriad Payment Options
    • CareCredit
    • Illustration 3-10: Ads for CareCredit on The Animal Hospital at
    • Southwood, Anasazi Animal Clinic and the Clinton Animal
    • Care Center websites, captured August 19, 2013
    • Illustration 3-11: CareCredit tablet app for veterinary practices
    • Citi Health Card
    • PetCard
    • Illustration 3-12: Petcard ad on Kamloops Veterinary Clinic website, captured September 15, 2013.
    • ChaseHealthAdvance Leaves Scene
    • Illustration 3-13: ChaseHealthAdvance ad from the April 2012 issue of Veterinary Practice News, just before it stopped accepting new applications and transactions.
    • Illustration 3-14: The ChaseHealthAdvance website, just before it closed shop for good; screenshot captured August 19, 2013.
    • Pet Assure
    • Illustration 3-15: Pet Assure's Groupon offer, July 2013.
    • United Pet Care
    • Banfield
    • Illustration 3-16: Banfield sweepstakes on Facebook
    • Pet Savings Accounts
    • Illustration 3-17: Ad for Pet Savings Account from Isabella Community Credit Union, run on May 8, 2013 in Mt. Pleasant (MI) Morning Sun
    • Illustration 3-18: West Bend Mutual Insurance TV ad

Chapter 4 Highlights

Chapter 4: Competitor Profiles

  • Competitor Profile: Embrace Pet Insurance
    • Background
    • Embrace's Brands
    • Core Values
    • Marketing Strategies
    • Illustration 4-1: Embrace Branded Car, September 2013
    • Online Activity
    • Healthy Pet Deductible
    • Plan Changes
  • Competitor Profile: Hartville Group, Inc.
    • Company Overview
    • Types of Plans
    • Management Shakeup Yields Growth
    • ASPCA Venture Going Strong
    • Illustration 4-2: ASPCA Pet Insurance Ad in Veterinary Practice News (April 2013)
    • Hartville Premiums Rise
    • Table 4-1: Hartville Group Gross Written Premiums, 2001-2013 (in millions of U.S. dollars)
    • Table 4-2: Hartville Group Number of Active Policies, 2001-2013
    • Marketing Focus
    • Illustration 4-3: ASPCA Pet Insurance Facebook contest (July 2013)
    • Increased Focus on Veterinary, Company Benefits Channels
  • Competitor Profile: Healthy Paws Pet Insurance
    • Company Overview
    • Profits with Purpose
    • Simplicity Wins
    • Change in Underwriters
    • Alternative Medicine Added
    • Backing from a Leading Brokerage
    • Marketing and Customer Care
    • Illustration 4-4: Healthy Paws Internet banner ad
  • Competitor Profile: PetFirst Healthcare LLC
    • Company Overview
    • New Insurance Plans
    • Company Strategy
    • Kroger Connection Ends
    • PetFirst Inks Continental Kennel Club Deal
    • Illustration 4-5: PetFirst ad on partner Continental Kennel Club's site, captured August 29, 2013
    • The Petfinder.com Connection
    • The HomeAgain Partnership
    • Illustration 4-6: PetFirst-HomeAgain landing page
    • PetFirst Looks to Grow Employee Benefits Business
  • Competitor Profile: Pethealth, Inc.
    • Company Overview
    • Revenue Growth
    • Table 4-3: Pethealth Revenues, 2001-2012 (in millions of Canadian dollars) .. 145
    • Pet Insurance Operations
    • Brokers
    • Underwriting
    • U.K. Market
    • PurinaCare Acquisition a Sign of Things to Come?
    • North American Pet Insurance Performance
    • Table 4-4: Pethealth Pet Insurance North American Gross Written
    • Premiums, 2001-2013 (in millions of U.S. dollars)
    • Table 4-5: Number of Pethealth Pet Insurance North American Policies in Force, 2001-2013
    • United States v. Canada
    • Table 4-6: Share of Pethealth Pet Insurance North American Gross
    • Written Premiums: U.S. vs. Canada, 2005-2013 (percent)
    • Pet Insurance Programs and Marketing
    • Illustration 4-7: Pethealth Inc.'s CherryBlue-branded website, featuring Hockey Night In Canada broadcaster Don Cherry
    • Pethealth Launches Aggregator Site-Petinsurance.ca
    • Non-Insurance Operations
    • PetPoint Shelter Management Software
    • 24PetWatch Pet Registry Services
    • Petango.com
  • Competitor Profile: PetPartners, Inc.
    • Company Background
    • AKC and CFA Policy Types
    • AKC and CFA Program Marketing
    • Illustration 4-8: AKC Pet Insurance Ad in AKC Family Dog (March/April 2012)
    • Illustration 4-9: AKC Pet Healthcare ad on the AKC.org website, captured August 29, 2013
    • Illustration 4-10: CFA Pet Healthcare ad on the CFA.org website, captured August 29, 2013
  • Competitor Profile: Petplan (Fetch, Inc.)
    • Company Overview
    • Table 4-7: Petplan Gross Written Premiums 2009-2013
    • Accolades Accumulate
    • The U.K. Connection
    • Fetch Moves into Canada
    • Illustration 4-11: Petplan Canada screenshot, viewed September 10, 2013
    • A Number of Strategic Partners
    • Illustration 4-12: Capital BlueCross pet insurance page, viewed September 10, 2013
    • Marketing Initiatives
    • Illustration 4-13: Screenshot of Petplan's Spring 2013 :60 TV ad
  • Competitor Profile: Pets Best Insurance Services
    • Company Overview
    • BestBenefit Accident and Illness Plans
    • Table 4-8: BestBenefit Accident & Illness Plan Coverage
    • New Plans Introduced
      • Cancer-Only Option
      • Feline-Only Illness Plan
      • Accident-Only Coverage
      • Annual-Based Plans
      • BestWellness Routine Care Coverage
    • Channel Focus
    • Illustration 4-14: Pets Best banner ad, captured July 26, 2013
    • Prompt Payment
    • Pets Best and Progressive
    • Marketing Initiatives
    • Illustration 4-15: Pets Best cat newsletter
  • Competitor Profile: Trupanion
    • Company Background
    • Own Underwriter
    • Financing, Growth and Future Aspirations
    • Approach to Channels
    • Trupanion Partners
    • Illustration 4-16: Trupanion ad, captured on Pet360 website on September 13, 2013.
    • Therapeutic Food Discount
    • Company Introduces Trupanion Express
    • Consumer Approach
    • Policy Changes
    • Trupanion Online
  • Competitor Profile: Veterinary Pet Insurance Co.
    • Company Overview
      • Company Realigns with Focus on Consumer Advocacy
      • Commitment to Benefit Schedule
      • Belief in Indemnity Insurance
      • Adherence to Regulation
    • Product Lineup
    • Emphasizing Wellness Care
    • VPI Hits New High Water Mark
    • Table 4-9: Veterinary Pet Insurance Gross Written Premium 1998-2013 (in millions of dollars)
    • Marketing Initiatives
    • Illustration 4-17: VPI Pet Insurance ad
    • Public Relations Mix “Fun Facts” with Pet Health Tips
    • Pet Parent's Day
    • The Iams Connection
    • Veterinary Channel Remains VPI Focus
    • Voluntary Benefits Leader
  • Competitor Profile: Western Financial Insurance Company
    • Company Background
    • Seven Brands, Including Three New Ones
      • Petsecure
      • PC pet insurance
      • CAA
      • Pet Insurance for Hudson's Bay
      • The Personal Pet Insurance Program
    • Illustration 4-18: Ad on Ontario Association of Certified Engineering
      • Technicians and Technologists website, captured September 15, 2013.
      • Walmart Pet Health Insurance
      • Desjardins Pet Insurance Program
    • Illustration 4-19: Desjardins Pet Insurance Program home page.
    • Three Products Discontinued
      • Petsecure's Petset
      • PetFirst
      • PurinaCare Canada
    • Veterinary Channel a Key Strategy
    • New Mobile App
    • Illustration 4-20: Petsecure Vet Locator app.
    • Focus on Shelters
    • Petsecure and the City of Calgary
    • Premiums, Policies Return to Solid Growth
    • Table 4-10: Western Financial Pet Insurance Gross Written Premiums, 2003-2012 (in millions of U.S. dollars)
    • Table 4-11: Western Financial Pet Insurance Number of Active Policies, 2005-2012
    • Strategic Alliances
    • Marketing Initiatives

Chapter 5 Highlights

Chapter 5: Consumer Trends

  • Pet Ownership Overview
    • Methodology and Data Sources
    • Growth in Pet Households Outpacing Overall Household Growth
    • Figure 5-1: Household Ownership Rates for Selected Pet-OwningClassifications, 2013 (percent of U.S. households)
    • Table 5-1: Household Penetration Rates for Selected Pet-Owning Classifications, 2009-2013 (percent of and number of U.S. households in thousands)
    • Table 5-2: Household Penetration Rates for Selected Dog- or Cat-Owning Classifications, 2007, 2009, 2011, and 2013 (percent of U.S. households)
    • Table 5-3: Household Populations for Selected Dog- or Cat-Owning Classifications, 2007, 2009, 2011, and 2013 (U.S. households)
    • Overall Demographics for Dog Owners
    • Income, Age and Other Skews by Number of Dogs Owned
    • Overall Demographics for Cat Owners
    • Household Composition Skews by Number of Cats Owned
    • Table 5-4: Demographics for Dog Ownership, 2013 (percent, number of households, and index)
    • Table 5-5: Selected Demographics for Keeping One Pet Dog, 2013 (percent, number of households, and index)
    • Table 5-6: Selected Demographics for Keeping Two or More Pet Dogs, 2013 (percent, number of households, and index)
    • Table 5-7: Demographics for Cat Ownership, 2013 (percent, number of households, and index)
    • Table 5-8: Selected Demographics for Keeping One Pet Cat, 2013 (percent, number of households, and index)
    • Table 5-9: Selected Demographics for Keeping Two or More
    • Pet Cats, 2013 (percent, number of households, and index)
  • Pet Owners and Insurance
    • Penetration Rates for Pet Insurance
    • Awareness of Pet Insurance
    • Figure 5-2: Levels of Consumer Awareness of Pet Insurance:
    • Dog Owners vs. Cat Owners, 2013 (percent)
    • Word-of-Mouth Replaces Vets as Most Important Source of Pet Insurance Awareness
    • Figure 5-3: Sources of Awareness of Pet Insurance: Dog Owners vs. Cat Owners, 2013 (percent)
    • Top Reasons for Never Having Pet Insurance Policies
    • Figure 5-4: Reasons for Never Carrying Pet Insurance: Dog Owners vs. Cat Owners, 2013 (percent)
    • Top Reasons for Discontinuation of Pet Insurance
    • Figure 5-5: Reasons for Discontinuing Pet Insurance: Dog Owners vs. Cat Owners, 2013 (percent)
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