Far from being 2-3% as found in the APPMA survey I mentioned in my prior post, less than 0.5% of cats and dogs in the US are insured.
It just goes to show you how biased a survey can be - passionate pet lovers are much more likely to fill out a survey and they are the ones more likely to have pet insurance, skewing the results too high. Makes you wonder about the other results too, doesn't it?
Here is how I came up with the numbers:
Company 2004 VPI 360,000 Pethealth 61,755 Hartville 20,126 Pet Protect 6,000 Pet Partners 2,000 Total 449,881 Number of cats & dogs 163,000,000 Percent insured 0.28%
How did I get those numbers?
- I used the number of cats and dogs from the APPMA survey for 2004
- Pethealth and Hartville policy numbers came directly from their annual reports so we can assume they are accurate.
- VPI do not report their policy number and haven't filed anything since early 2004 so we have nothing directly from the company. The number I used was reported by a VPI insider in an article published by THE PRESS-ENTERPRISE on April 11, 2005. Unfortunately, the publisher only keeps their articles available for 4 days so I can't link to it but the relevant excerpt says:
At Veterinary Pet Insurance, the oldest and largest U.S. pet insurer, the number of policies has increased almost 1,000 percent since 1998, said Brian Iannessa, spokesman for the Brea-based company that was created in 1980. More than 360,000 pet owners have active policies today.
- Pet Protect and Pet Partners are just guesses on my part. Pet Protect has been around the longest so they got the most policies. Both companies have a low profile online and even though Pet Partners sells through the AKC and CFA, we don't believe they have sold very many policies.
This next section is just for number junkies - don't bother reading it if you don't want to wade through some analysis of these numbers. It's not that exciting, honest :)
I'm not sure I believe the VPI number - it looks too low to me based on past reported numbers. Even thought VPI don't report their policy numbers directly, we can back them out from the 2002 results found on Edgar by using the following facts (2003/2004 not reported yet - tut tut):
- gross written premium (standard measure of premium in the insurance industry) = $64.2 million
- average premium per policy = $254
- implied number of policies = $64.2 million/$254 = 252,770
The growth rate implied by going from 253,000 to 360,000 in 2 years is about 20%, which is much less than prior years' rates of about 40%. It's possible that the article was quoting an older number, perhaps for 2003 and just didn't follow up with VPI directly.
Just to see if it makes much difference, if I assume an annual 40% growth rate for VPI from 2002-2004, the 2004 VPI policy number becomes 495,000. If I also assume that the Pet Protect and Pet Partners numbers are double what I assumed above, the new market share is:
Company 2004 VPI 495,430 Pethealth 61,755 Hartville 20,126 Pet Protect 12,000 Pet Partners 4,000 Total 593,311 Number of cats & dogs 163,000,000 Percent insured 0.36%
versus 0.28% above
As you can see, it really doesn't make much difference in the grand scheme of things. Both confirm that less than 0.5% of the US cat and dog population is insured.
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