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Just the other day, I saw an intriguing teaser about pet insurance on AMA TV. According to the American Pet Products Association (APPA), this year pet owners are expected to spend $58.5 Billion on their pets and of that, $15.25 billion will go towards veterinary care. Due to the increase in people who treat their pets as part of the family and an upsurge in procedures and cost, pet insurance is positioned to be the next big player in the health care industry. It's already starting to be offered as an employee benefit at many companies.
However, with the rise in popularity comes new regulations. Proposed California legislation which will regulate pet insurance is currently making headlines. The bill is up for a vote in the Senate. It will be the first of its kind. No other state has imposed regulations for pet insurance.
All of this reminded me of a study we conducted early last year with Hive, our online forum. We brought together a community of pet owners to explore all aspects of the relationships between pets and their human caretakers. We discussed everything from the types of relationships they have, sleep habits, new product wish lists, holiday shopping behaviors, and even pet insurance. What we found is that there was a lot of hesitancy around acquiring pet insurance, largely driven by costs. Due to the economic climate, some pet owners made mention of barely being able to afford their own health insurance, much less being able to afford insurance for their pets.
We found that with pet insurance being widely seen as a luxury vs. a necessity, those who offer insurance should first and foremost focus on value communications. Breaking costs down in easy to understand increments (i.e. for only $15 dollars a month, for only $100 dollars a year) might increase value perceptions. Offering tiered and/or customizable levels of coverage may broaden appeal.
Additionally, insurance communications should play-up the emotional bond that exists between a pet owner and their pet. In doing so, the takeaway is not ‘I can’t afford it’, it becomes ‘how can I NOT afford it?’
I must admit I used to be one of the naysayers when it came to pet insurance, but not long after we conducted this study I joined the ranks of those insuring their pets; after all, my pets are just two, very loved, extensions of my family. So, for all you animal lovers out there, how do you feel about pet insurance?
To request a copy of the findings from our Exploring Pet Ownership Study, click here.