No danger in emotional ties when it comes to pet insurance
Anglo-American pet insurance technology specialist Aquarium Software says being treated like a dog when it comes to medical care may be no bad thing. New research suggests intriguing synergy between human and pet health care markets, and as improbable as it may seem, Aquarium says this correlation presents real opportunities for insurers.
Spending on human healthcare in the US grew 50 per cent between 1996 and 2012 and over the same period, pet care perhaps surprisingly grew by a similar margin. However, while Americans spent $15bn on pet health in 2015, an incredible $3.2tn was spent on human health. Both markets have seen increases in medical personnel and a growth in end of life spending; the question is this: if the rate of growth is the same, why is there such a gap in actual spend, between pet and human health? Perhaps it’s not fair to suggest a true like for like comparison, however the fact remains that 90 percent of Americans now have health insurance, compared to 1 per cent of pets. Aquarium sees a great opportunity for this emotional attachment to pets to translate into a wider take up of pet insurance, especially in the USA.
“The unifying factor in both human and pet insurance markets is emotion,” said Aquarium Software’s VP Sales and Marketing, Mark Colonnese. “If it came to a choice, many of us would save our dog or cat even if it meant putting ourselves at risk. Yet only 1% of US pets are insured. From a business perspective, this means those who have pulled out of the market may be mistaken. Maybe they were looking purely at the short-term numbers and overlooking the huge potential for long-term emotional engagement with pet owners. Pet insurance is absolutely here to stay, for those in the market that get this.”
Reports playing down the pet insurance market have implied policies are expensive and people will not pay. This has led to some players in the UK, US and Asia pulling out of the market and corresponding expert puzzlement as pet insurers defy predictions and are still reaping the rewards, with total premium volume up 17 per cent in the last two years alone.
“Emotional attachment to pets if anything gets stronger rather than weaker”, says Colonnese, “which may explain why in America, pet insurance is one of the fastest growing employee benefits. Delta Airlines; Hewlett-Packard; Microsoft; UPS; and Xerox - among others - all now offer it. Our own YouGov research here in the UK seems to confirm this as sound business logic; 70% of dog owners (and 58% of all pet owners) would rather spend time with their pet than meet new friends. That’s either a scary thought or an enormous marketing opportunity, whichever way you look at it,” Mark concluded.