3 Reasons to Add Pet Insurance to Your Product Lineup
It’s National Pet Day—a day to celebrate our furry, scaly, and feathered family members. And just like any other member of our family, pets deserve the best care possible. That's why, today, we want to shine a spotlight on an essential aspect of responsible pet ownership—pet insurance.
If you run a business that caters to pet owners, there are three big reasons you should be offering pet insurance to your customers.
Reason #1: Your Customers Need Pet Insurance
Pet insurance is crucial for several reasons. First and foremost, it gives your customers financial protection for unexpected veterinary expenses. Just like humans, pets can experience accidents, injuries, and illnesses that require medical attention, and the costs associated with veterinary care can add up quickly. In 2021 alone, Americans spent over $32B on vet care and related products, and unexpected emergency vet care averages between $800 and $1500 per visit.
At the same time, in 2022, half of American adults reported having $5000 or less in their savings account and one-third had less than $1000. 33% of American pets need emergency care each year, but up to 75% of American pets are still uninsured. That means that, if a pet needs unexpected vet care, a sizable percentage of Americans might struggle to afford it. Even for well-off pet owners, an emergency vet trip can be a nasty financial surprise.
Pet insurance can help to offset these expenses, ensuring that your customers can provide the necessary medical care for their pets without breaking the bank.
Reason #2: Pet Insurance Can Build Substantial Recurring Revenue
Whether you’re a pet-related business or an insurtech catering to consumers, offering pet insurance is a big opportunity to build new or additional recurring revenue streams.
The pet insurance industry is huge, with over 130 million pets estimated in the U.S. However, despite the large number of pets, most pet owners don’t have insurance, which creates a significant opportunity for pet related companies to get in on this market. The popularity of pet insurance is quickly increasing: gross written premiums for pet insurance in the US have grown by double-digit percentages every year since 2016, and in 2020, the total US volume hit almost $2 billion.
The primary opportunity for your business to benefit from pet insurance is through the revenue of regular premiums paid by pet owners. In exchange for financial protection from unexpected medical expenses for their pets, your customers will pay you a regular monthly premium. These regular payments provide a steady, new source of revenue to your company while deepening your customer relationships.
Reason #3: Insurance is Sticky
That leads to the next major incentive: customer retention and experience. A major perk of embedded pet insurance is that it markets to your existing customers. Rather than investing more time and money into new audience acquisition costs, embedded insurance builds a deeper relationship with customers already in your funnel. You’ve already done the hard work of building a positive, trusting relationship with your customers, and this adds a new, beneficial point of engagement with them.
Embedded insurance creates lifetime customers out of formerly one-time buyers. If you have customers who occasionally buy dog toys or cat food from your website, you can easily offer them pet insurance at checkout. Insurance is a very “sticky” product with an average 84% customer retention rate. Now, instead of just occasionally visiting your website to grab the latest toy, their engagement with your brand will increase because they will be interacting with you every month to make their premium payments. It provides an opportunity for your business to demonstrate even greater service and care that will increase customers’ brand loyalty.
By offering your customers the protection they need for their pets and their wallets, you can create deeper customer relationships and a stronger brand identity while increasing your short and long-term revenue.