Pet Insurance Business Booming
Revenues should hit $880 million by 2014
Although pet insurance is a tiny piece of the financial services, CNN says, the business has soared to $550 million in revenue for North America, and is booming.
Revenues in the U.S. have jumped to 20% a year for the last decade and should hit $880 million by 2014, according to David Lummis, an analyst at consumer goods research firm Packaged Facts. He said there is room for growth as less than 1% of pets in the U.S. are insured compared to 25% in the U.K.
Commerce Bank founder Vernon Hill recently invested in the Petplan USA. “There’s a crying need for pet insurance,” he says. The insurance has high-profile backers including Rachel Ray’s vet Ernie Ward. The company’s sales have jumped to 50% a year since it was launched in 2006. It broke even in 2009, and currently generates $30 million in revenue.
The company offers up to $20,000 a year in coverage for an average premium of $350 per year.
"As more people would do almost anything to save their pets, this is a business with unlimited upside,” Hill said.
Petplan faces competition from Veterinary Pet Insurance and PetHealth.