Tuesday, October 6, 2009
Pet Insurance On The Rise
Written By: Lisa Matthys
While news continues about health insurance reform for humans, health insurance for pets has seen an increase in America due to rising costs of veterinary bills and increased consumer spending on pets. Although the market is small, investors see it as a profitable niche that is expected to grow. Revenues from gross written premiums of pet insurance increased 21% from 2006 to 2007 and are expected to grow 25% to 35% over the next five years, placing sales at $1.1 billion in 2012.
On October 1st, the Central States Indemnity of Omaha, a Berkshire Hathaway company, partnered with Nestle to market pet-centric insurance options. Previously in June 2008, Purina, a unit of Nestle, launched a pet insurance division to consumers. Purina’s premiums range from $35 to $50 per month depending on the coverage, the breed, whether a dog or cat, age, as well as location of the pet owners home.
While pet insurance in the United States has seen a slight increase over the past year, approximately half of all pet owners in Sweden insure their pets and about 20% in the United Kingdom. The market for pet insurance is expected to increase based on statistics from the American Veterinary Medical Association, which predicts that the amount of pet-related expenditures in 2009 will increase from $25 billion to $45 billion.