Pet insurance experiencing ‘exploding growth’
August 18, 2014 by Nathan Solheim
While everyone’s howling at the moon these days about health insurance, a certain voluntary benefit no longer resembles that lonely puppy with sad eyes in the pet store that gets passed over by customer after customer.
The benefit is pet insurance, which continues to grow in popularity with employees — and employers — around the country and at companies both large and small. There are a few reasons for the furry phenomenon: The Patient Protection and Affordable Care Act is causing many employers to review their benefits packages, searching for ways to add value without adding cost. Another reason is competition. Plenty of employers offer the benefit, and with pet owners very well-represented in the workplace, it behooves companies to keep up with their competitors.
“The headline is exploding growth,” says Deanna Single, director of group accounts for VPI Pet Insurance of Brea, California. “The Affordable Care Act, with its implementation this year, has companies looking more and more at their benefits and seeing they’re open to pet insurance. We’re seeing employees taking a greater interest in it as well. I think now that human resources departments are doing better at promoting available benefits, and with the changes in the health care market, [employers are] looking more closely than they have in the past to make sure they have the appropriate coverage for all areas of their life.”
Single’s company, VPI, was the first company in the country to offer pet insurance, famously writing a policy for everyone’s favorite collie, Lassie, in 1982. VPI, according to company sources, provides pet insurance to one in three Fortune 500 companies and more than 3,800 companies as a whole.
Chipotle Mexican Grill, Deloitte LLP, Delta Airlines, T-Mobile, Boeing and Xerox are just a few of the nation’s largest companies that offer pet insurance to their employees. Single says an internal VPI focus group puts pet insurance in the top three most requested benefits by employees.
Petplan, another pet insurance provider, was among the top 50 on Forbes’ annual ranking of America’s Most Promising Companies — a showcase of 100 private, high-growth companies — in 2013 and 2014. Petplan conducted a survey recently that found that more than 98 percent of pet parents consider their pets to be part of their family.
“Viewing it through that lens, it’s not hard to understand why pet insurance as an employee benefit is growing in popularity — in fact, it is now the third most-requested voluntary benefit,” says Chris Ashton, co-founder and co-CEO of Petplan, which is located in Philadelphia. “And with no cost or administrative burden to the company’s HR team, offering Petplan pet insurance is a great way to help attract and retain talent, while recognizing the indispensable role pets play in our lives.”
The benefit has grown enough that a few companies now pay a percentage of their employees’ cost.
“It’s not as widespread as we’d like it to be,” Single says. “But we have some employers that will pay 100 percent, and we have some that pay a percentage of the premium. Some employers offer a fixed amount that the employee can spend on whatever they way want — including pet insurance.”
Pet insurance has even become part of private benefits exchanges. VPI is a part of Mercer Marketplace, for example. In this setting, employees can choose pet insurance from a menu of other voluntary benefits.
“With the explosion of the exchange market, we’re in more benefits platforms,” Single says. “Just like the states had to come up with an exchange, private industry has responded in the exchanges. As [we are] the leader in the pet insurance market, they’ve been reaching out to us so employees will have access to us on the exchange. It’s a very exciting time — it’s a whole new area of benefits that’s coming to the market that didn’t exist 18 months ago.”
According to a 2013 Towers and Watson study, 30 percent of companies offer pet insurance, which means the industry still has room to grow. Single says VPI is moving forward with new products — including a guaranteed issue product and a move into the finance market in order to help employees pay for expensive procedures for their favored furry ones.
Ashton adds that there still are plenty of pets that could be covered.
“With less than 2 percent of U.S. and Canadian pets insured — compared with 25–50 percent in some European countries — pet insurance is set for enormous growth as awareness develops, and employee benefits is one of the ways we do that,” Ashton says. “There are very few opportunities with such massive potential for growth as what currently exists in the benefits space.”
