- Less than half of organizations offer pet insurance. WorldatWork research from 2022 found only 42% of surveyed employers made this benefit available to at least some of their employees.
- Pet insurance purchases are on the rise. The North American pet insurance industry attained a record-setting $4.27 billion in total sold premiums in 2023.
- This is an area ripe with opportunity. A study by PetPartners and the Human Animal Bond Research Institute showed less than 4% of pets in North America are currently insured.
When considering which health benefits to offer employees and their family members, one important demographic is often overlooked: the family pet.
WorldatWork research from 2022 showed only 42% of surveyed employers offered pet insurance to at least some of their employees. But that may be changing.
The North American Pet Health Insurance Association (NAPHIA) recently released its 2024 State of the Industry Report showing the North American pet health insurance sector grew by 21.9% in 2023.
For the first time, in 2023, the North American pet insurance industry eclipsed US$4 billion in total sold premiums ($4.27 billion total, vs. $3.5 billion in 2022). The more than 6.25 million pets insured was a 20.9% increase over the 5.17 million pets insured in 2022.
NAPHIA executive director Kristen Lynch noted the 25.7% average policy growth rate in the North American market over the past five years demonstrates pet owners increasingly understand the value of — and need for — this type of insurance, which is important considering:
- These owners, in aggregate, have more than 170 million pets (dogs, cats, etc.)
- This insurance option is designed to mitigate the impact of unexpected — and, at times, quite expensive — veterinary costs.
“At a time when households are experiencing growing financial pressures, pet insurance provides owners with financial protection to cover the rising costs of veterinary care,” said Lynch. “Our industry’s strong growth is evidence that North American pet families recognize the value of pet health insurance coverage and appreciate the certainty it offers in those instances when their pet has an unexpected illness or injury.”
So, what do total rewards professionals need to know about offering this benefit to employees?
Protecting the Pandemic-Era Pets
With approximately 23 million households having acquired pets during the pandemic, pet insurance is one of the top three fastest-growing voluntary benefits, said Michelle Yates, executive vice president of OnePack Plan by PetPartners.
But a new study of more than 1,000 HR professionals across the United States and Canada by PetPartners and the Human Animal Bond Research Institute showed less than 4% of pets in North America are currently insured.
The benefits of pets and planning for their protection are clear, according to Yates.
“[The research shows] 96% of HR professionals surveyed view their pets as an important part of their family, and 78% believe pet insurance is an important benefit to offer employees, citing employee well-being and morale as key drivers of this voluntary benefit,” said Yates.
Surveyed HR professionals reported employees at organizations that offer pet insurance are 84% more satisfied with their jobs and 82% more satisfied with their benefits than employees at organizations that do not offer it, Yates said.
“Organizations are beginning to realize that adding this offering will likely help to increase employee satisfaction, reduce turnover and can even be a factor in managing human health costs [because of the psychological benefits of pet ownership],” she said.
And, with 90% of HR professionals reporting they would spend “whatever it takes” if their pet required extensive veterinary care, the rising costs of such care means pet insurance is becoming more essential and sought after across all sectors.
Maximizing Usage and Value
Experts agree pet-inclusive workplace policies can drive employee engagement, retention and a positive culture, whether in an office or remote work setup, said Yates.
To wit: 87% of respondents to the PetPartners survey agreed offering pet insurance is a good way for a company to show care and concern for employees and their families — “including their furry family members,” Yates added.
So, how can organizations that offer pet insurance maximize its value and usage?
Integrating pet insurance into your organization’s healthcare platform, rather than as a standalone offering, may increase benefit signup and utilization rates, said Steven Feldman, president of the Human-Animal Bond Research Institute.
“The pet insurance companies are focused on making it easy,” he said.
Feldman also recommended organizations surround the insurance offering with other pet-friendly benefits.
“The most obvious one that comes to mind is allowing pets in the office if you are in an office environment some or all of the time,” he said.
Feldman also advised organizations to offer more flexibility to work from home to care for sick pets, adding that he’s even seen a trend of organizations becoming more sensitive to pet bereavement.
Workers are more likely to stay with their current employer if they have pet benefits rather than take a job elsewhere, where these benefits may or may not be available, according to a survey of employees in partnership with Nationwide Insurance, Feldman said.
“Overall, the more you show you care about the pets, the more you have a competitive advantage in the marketplace,” he said.
The connection between pets and the workplace may still be new for some employers, Yates said. “But it’s clear,” she said, “there is a strong desire from HR professionals to be inclusive of pet-related voluntary benefits, such as pet insurance and more.”
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