The global pet insurance market is expanding rapidly as more pet owners look for financial protection for their furry companions. With rising veterinary costs and mandatory liability insurance becoming more common—especially in Europe—pet insurance is quickly becoming a must-have service. However, while demand for coverage continues to surge, the industry faces a major challenge: managing the growing number of claims and making policy acquisition more efficient.
This is where automation comes into play. By automating claims processing and policy acquisition, insurers can not only keep up with demand but also offer more efficient, customer-friendly experiences. In this blog, we’ll explore the different types of pet insurance, key market segments, and the transformative role automation is playing in the industry.
The rise of pet insurance: why it's growing
The pet insurance industry has seen exponential growth, with the global market expected to reach a CAGR of 9.36% from 2024 to 2031. This surge is largely driven by three major factors:
- Increased pet ownership: Pet ownership has increased dramatically, especially since the COVID-19 pandemic. Many people sought companionship during lockdowns, leading to a sharp rise in pet adoptions globally.
Millennials and Gen Z increasingly opt for pets over parenthood, viewing them as full-fledged family members. With this shift, more pet owners are willing to invest in pet insurance to protect against unexpected veterinary expenses. This trend has directly influenced the rise in demand for pet insurance, as today’s pet owners prioritise their pets' well-being and healthcare.
- Rising veterinary costs: Veterinary care has become more advanced, with treatments now including MRIs, cancer therapies, and even complex surgeries. These innovations are pushing the cost of pet care beyond the reach of many uninsured pet owners.
As a result, many pet owners are turning to insurance as a way to manage these significant expenses and gain peace of mind .
- Greater awareness: More consumers are becoming aware of the financial advantages of pet insurance, especially in regions where pet healthcare is expensive. As awareness grows, so does the demand for comprehensive insurance policies that cover not only accidents but also routine care and long-term medical needs.
In Europe alone, the market is projected to hit $5.30 billion by 2029, with a strong 9.36% compound annual growth rate. Countries like the United Kingdom, Germany, Spain, and France are leading the way, driven by mandatory liability insurance laws for pets in some regions. But as demand increases, so do the operational challenges—making automation a crucial tool for insurers.
Types of pet insurance available
There’s no one-size-fits-all solution when it comes to pet insurance. Different types of coverage are designed to meet the varying needs and budgets of pet owners. Let’s break down the main types:
1. Lifetime Cover
- What it is: Comprehensive insurance that covers a pet’s health throughout its entire life, renewing annually with a set limit.
- Who it’s for: Pet owners seeking full coverage, from routine checkups to emergency surgeries.
- Cost: The most expensive option, but it provides the most peace of mind and financial protection.
2. Non-lifetime Cover
- What it is: This policy provides coverage for specific conditions up to a fixed limit, but coverage ends once the limit is reached.
- Who it’s for: Cost-conscious owners who want coverage for common health issues without the higher premiums.
- Cost: More affordable but with limited long-term protection.
3. Accident-only
- What it is: This covers only injuries resulting from accidents, excluding coverage for illnesses.
- Who it’s for: Pet owners looking for basic financial protection at a lower cost.
- Cost: The most affordable option but with limited benefits.
4. Wellness plans and preventive care
- What it is: These plans cover routine care such as vaccinations, dental cleanings, and wellness checkups.
- Who it’s for: Owners who want to keep their pets healthy through preventive measures.
- Cost: Moderate, as it focuses on routine care rather than major medical issues.
As the market grows, so does the demand for customisable plans that meet the unique needs of each pet and owner. Automation helps insurers manage this complexity by offering tailored quotes and personalised experiences.
Key segments in the pet insurance market
The pet insurance market is segmented primarily by the type of animal and the specific needs of their owners. The biggest drivers of growth are in the dog and cat segments, but there’s also a growing interest in covering other pets, such as rabbits and reptiles.
1. Dogs
- Market share: Dogs represent the largest segment of the pet insurance market. Owners are more likely to insure dogs due to their higher risk of accidents and illnesses.
- Coverage needs: Comprehensive plans that cover everything from emergencies to chronic conditions are common.
2. Cats
- Market share: Cats hold the second-largest share of the market, though their coverage needs are often less extensive than dogs.
- Coverage needs: Owners typically look for policies that cover accidents and illnesses, with some opting for preventive care.
3. Other Pets
- Market share: This is a growing but niche segment, including pets like rabbits, birds, and reptiles. Owners of exotic pets are beginning to seek out tailored insurance plans.
- Coverage needs: Vary widely, but wellness and accident-only policies are becoming more common.
As these segments evolve, insurers are leaning on automation to handle the increasing volume of claims and policy applications, especially as more owners seek coverage for non-traditional pets.
The role of automation in pet insurance
Automation is changing the way pet insurance works, from policy acquisition to claims processing. Insurers who embrace this technology are able to stay ahead of demand, reduce costs, and provide a better experience for their customers.
Automation in policy acquisition
The process of acquiring a pet insurance policy has traditionally been time-consuming and paper-heavy. Now, thanks to automation, it’s faster and easier than ever. Here’s how it works:
- Instant quotes: With automation, insurers can provide real-time, tailored quotes based on the pet’s breed, age, and health history. Pet owners can instantly compare policy options, simplifying the decision-making process.
- Seamless applications: Once a customer selects a policy, AI-driven systems automatically populate forms with the necessary details, reducing errors and speeding up the application process.
- Personalised experiences: Using AI, insurers can recommend policies that align with the customer’s specific needs, ensuring a more personalised experience that increases satisfaction and retention.
- Automated renewals: Automation also makes it easy for insurers to manage renewals, sending reminders and processing upgrades or downgrades with minimal human intervention.
Automation in claims processing
Claims processing is one of the biggest challenges for pet insurers. Handling high volumes of claims quickly and accurately is crucial to maintaining customer trust and satisfaction. Automation can streamline this process in several ways:
- Faster claims filing: Pet owners can file claims at any time, from anywhere, using a conversational app or chatbot. This system collects relevant information, such as vet bills and photos, and starts the claim review process immediately.
- Reduced workload for claims managers: Routine tasks like initial claim intake and document verification can be fully automated, allowing claims managers to focus on more complex cases.
- Transparency and real-time updates: Automated systems provide real-time updates on the status of claims, keeping customers informed and reducing anxiety about the process.
- Smart routing: Advanced AI models can route claims to the most appropriate agent, ensuring faster resolution and higher customer satisfaction.
Regional insights into the pet insurance market
Pet insurance is growing across all major regions, but the United States, Canada, and Europe are the biggest players. Let’s look at how the market is performing in different regions:
- North America: With a 45% market share, North America is leading the global pet insurance market. The market is expected to surpass $7 billion by 2025.
- Europe: Europe holds around 25% of the global market share, with the UK, Germany, and France leading the way. Mandatory pet insurance in some regions has contributed to this growth.
- Asia-Pacific: The pet insurance market is growing rapidly in China, Japan, and India due to rising pet ownership and disposable incomes. The region is forecasted to hold 15% of the global market by 2031.
- Latin America and Middle East & Africa: These regions are emerging markets for pet insurance but are seeing steady growth due to increasing awareness and rising disposable income.
Why automation is the future of pet insurance
The pet insurance market is at a tipping point. As demand continues to rise, insurers must embrace automation to stay competitive. Automation is no longer just about increasing efficiency—it’s about improving the customer experience, cutting costs, and ensuring accuracy at every step of the insurance process.
For insurers, investing in conversational apps, AI-driven claims processing, and automated policy acquisition means they can handle the growing demand with ease, while providing the level of service that today’s pet owners expect.
Embracing the future of pet insurance
The pet insurance market shows no signs of slowing down, and with automation at the helm, insurers are poised to meet the challenges of this growing industry. By adopting advanced technologies that streamline policy acquisition and claims processing, insurers can not only stay ahead of the curve but also provide the seamless, personalised experiences that today’s pet owners demand.
Now is the time for pet insurers to embrace automation and lead the way into the future of pet insurance—where efficiency, customer satisfaction, and innovation are the key drivers of success.
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