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Prices for pet insurance are on the rise — by more than 50% for some pet owners — amid a spike in demand for veterinary care that insurers say is fueling higher-than-expected claims costs. The extent to which premium increases are being felt across the industry isn’t entirely clear, but some individual pet owners are seeing price increases exceeding 50%.
Pet Owners’ Experience of Insurance Can Vary Substantially
Pet owners’ experience of insurance can vary substantially, depending on their pet’s age and breed, the type of policy they bought, and where they live. Social media is dotted with posts from people complaining of eye-watering rises in their premiums.
At least one larger insurer is bracing for a loss of customers
At least one larger insurer is bracing for a loss of customers, and other companies also are expecting significant premium increases. Trupanion, one of the biggest publicly listed pet insurers in the U.S., expects its premiums and a rising pet insurance by an average of 15% in the first quarter of 2023 year-over-year, rising to 18% by year-end, its executives said on an earnings call last month. Trupanion expects to lose customers as a result, but the company believes the price increases will enable it to meet payout pledges and offer reliable coverage.
Growing Demand for Veterinary Care Drives up Prices
Owners of veterinary practices have for years pinned rising demand for their services on the “humanization” of pets increasingly regarded as family members. Veterinarians have found themselves particularly stretched recently by an apparent pandemic pet boom. At the same time, inflation has been running rampant almost everywhere, as supplies of goods and services fail to keep pace with pandemic-recovery demand.
Veterinarians Wary of Insurers’ Power
Some veterinarians worry that more widespread coverage for pets could boost the industry’s influence in setting prices for medical services — and make pet insurance as cumbersome and controlling as it is for human patients. Veterinarians in Sweden, for instance, have told VIN News that ultra-high levels of insurance coverage there have improved standards of care but also pushed up treatment costs. Some veterinarians in Sweden have started charging clients an administrative fee to handle processing their insurance claims.
Insurers Optimistic About the Future
Despite spiraling premiums and other impediments, insurers are optimistic that U.S. households will become more attracted to pet insurance to cope with the rising pet insurance costs. Trupanion‘s Tooth, who hails from the U.K. and once worked for insurer Allianz there, is confident American penetration rates will grow over the longer term, as pet owners become acquainted with better-designed policies that pay out claims more reliably than they perhaps did in the past.
Find out more in news.vin.com.
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