The global pet insurance industry is projected to experience robust growth, with an annual compound growth rate (CAGR) of 12.92%, reaching a market value of $13.77 billion by 2033, up from $5.21 billion in 2024, according to Market Data Forecast.
The Asia-Pacific (APAC) region is emerging as a key market, driven by rising disposable incomes and an increasing awareness of pet healthcare. Countries like China and India are witnessing a surge in pet adoption, contributing significantly to the market’s expansion.
Growth in Pet Insurance Demand
Accident and illness plans continue to dominate the pet insurance market, accounting for over 80% of the sector. These policies, which cover chronic and hereditary conditions, are becoming increasingly popular as veterinary costs rise globally. The demand for more comprehensive policies is further fueled by the escalating costs of pet healthcare.
Digital Sales and Adoption Trends
Digital sales channels, particularly company websites and mobile apps, have become a major contributor, representing more than 30% of policy purchases. This shift to online platforms is enhancing the accessibility of pet insurance for a broader range of pet owners.
However, the market faces several challenges, particularly in emerging regions. Low adoption rates are often due to the high costs of veterinary care and limited insurance options. In addition, the lack of standardized reimbursement processes and the complexity of policy terms pose obstacles to growth.
Premiums and Coverage Trends
Premiums remain a significant barrier for some pet owners, particularly those with older pets or breeds prone to health issues. Despite these challenges, the demand for pet insurance is expected to continue its upward trajectory, especially as pet owners seek financial protection against the high cost of veterinary services.
Dogs are the dominant species in the pet insurance market, accounting for 51.8% of the total market share in 2024. This is primarily due to the high popularity of dogs and their higher healthcare costs. Meanwhile, cat insurance is on the rise, with a projected CAGR of 7.78%, driven by growing urban pet ownership and heightened awareness of feline health coverage.
Policy Preferences and Sales Channels
In 2024, accident and illness policies held an 82.12% share of the pet insurance market due to their broad coverage options. Accident-only policies, while representing a smaller segment, remain appealing to owners of younger, healthier pets who seek more affordable insurance options.
The direct sales channel continues to grow, capturing 42.3% of the market in 2024, thanks to the increasing use of digital platforms. However, the agency sector still caters to pet owners who prefer personalized service, and veterinary clinics and pet stores are emerging as alternative sales channels, offering more diverse options for pet insurance.
As the market evolves, the increasing adoption of digital tools and growing awareness of pet healthcare are expected to shape the future of the pet insurance sector.
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