Voluntary Benefits: Pet Health Insurance

By Clive Riddle, April 27, 2011

The lack of an Affordable Care Act for Pets hasn’t held back the pet health insurance industry. Voluntary benefits in general enjoy popularity with larger employers, who can offer a discounted perk without paying for it. While the recession bit into sales for pet plans and other voluntary benefits as discretionary income and the number of eligible employees took a dip, the outlook for pet health plans remains strong.

Veterinary Pet Insurance (VPI), the nation's oldest and largest provider of pet health insurance, just issued a statement that during 2010 “the company added nearly 400 large companies and associations to the list of more than 2,200 groups that offer pet insurance as a voluntary employee benefit. The addition of these group accounts made VPI Pet Insurance available at a discount to a record 13 million people for the year.”

Under the voluntary benefit agreements, employees receive a 5% discount on insurance premiums, and many may pay via a payroll deduction.

Deana Single, director of group accounts for VPI tells us "when it comes to health insurance benefits, many companies are having to deliver bad news. These costs are continually increasing for many companies and their employees. Fortunately, VPI Pet Insurance can be added to a company's benefits package at no cost to the business."

VPI listed national firms that added their voluntary benefit in 2010 included: Kohl's Corporation; Morgan Stanley; Hewlett-Packard Company; BMW North America, Inc.; McDonald's Corporation; The Boeing Company; Quiksilver, Inc.; and American Eagle Outfitters, Inc. VPI notes that “at the end of 2010, one out of every five Fortune 500 companies offered VPI Pet Insurance as a voluntary employee benefit.”

Laura Bennett’s Embrace Pet Insurance Blog on Pet Business Trends 2011 cites that national pet insurance “gross written premiums (GWP) reached $290 million in 2009 and are projected to reach $327 million (12% growth) at the end of 2010. The three largest pet insurance companies in the US, Veterinary Pet Insurance, Hartville Group, and Pet Health Inc, together representing 78% of the market, will show modest growth of 5.5% in 2010 compared to 16.5% in 2008. The remaining companies will report growth of 47% in 2010 compared to 82% in 2008.”

Laura predicts that “overall premium growth in 2011 will be pulled in two directions. Two factors will drag down GWP growth: the slower growth of the top three pet insurers as they work to offset a more mature book of business; as well as the inevitable decline in sales and renewals from 30% (and higher) premium increases that are being implemented by some of the younger, faster growing companies.”  Her overall assessment of the pet market? “Pet-related spending in 2011 will show an increase over 2010 levels but not at the robust rates we saw prior to the recession.”

Thus for voluntary pet insurance, and other voluntary benefits, the increased popularity from employers clears one hurdle, but the individual purchase hurdle still remains an obstacle that only an improved economy might fully remedy.