Following an increase in pet adoption as a result of the pandemic, consumers spent $124 billion in the pet industry including on food, supplies and vet visits in comparison to $90 billion in 2018. After noticing growth in the industry, it is no surprise that dealmakers are looking to get a slice of the pie but one area, in particular, is garnering attention: pet insurance. Check out the full feature story here.
The pet insurance industry is one that only has a small group of players working to attract a massive percentage of pet owners. According to the North American Pet Health Insurance Association’s 2022 State of the Industry Report, there are 160 million pets living in U.S. households and only 2.48 percent of them are insured. Since 2017, the average annual growth rate of insured pets is 21.6 percent. This upward trajectory in a burgeoning market has attracted private equity firms, insurance companies, big-box retailers and others.
“The goal of all of us in pet insurance is to take this industry, which has historically been a niche player in insurance, and make it mainstream,” says Paul Guyardo, CEO of Fetch by The Dodo (formerly Petplan), a North American provider of pet insurance based in New York. “All of the technology and innovation that exists in human healthcare has now come into the veterinary space: chemotherapy, hydrotherapy, acupuncture, behavioral therapy, bone marrow transplants –and that is very expensive, and pet insurance at its best can make these services far more accessible to Main Street Americans.”
In the past three years, dealmaking has been robust as firms are trying to deliver pet insurance services to make healthcare for pets affordable for most Americans. In 2019, Warburg Pincus acquired Petplan and rebranded the firm as Fetch. In 2021, Alpine Investors launched Antelope, a pet consumer platform that includes digital pet insurance provider Doggo, and has acquired four firms including Bocce’s Bakery.
Beyond private equity, in 2019, NSAM Insurance Group acquired Cleveland-based Embrace Pet Insurance and MetLife Inc. snagged PetFirst Healthcare, a pet health insurance administrator.
“It’s exciting to see a vertical in insurance where you can capture a new market – rather than take [customers] from an established company,” says Mike Vostrizansky, principal at growth equity investment firm FTV Capital in New York.
Is this burgeoning industry a fad or a real game changer for pet services and insurance providers? Let me know your thoughts on the industry at [email protected].
–Cole Lipsky
