The global pet insurance market is experiencing an unprecedented boom, driven by the increasing “humanization” of pets and the soaring costs of veterinary care. The pet insurance market size is expected to grow from US$ 11.2 billion in 2023 to US$ 38.0 billion by 2031; it is anticipated to expand at a CAGR of 16.5% from 2023 to 2031. This growth is a clear indicator of a fundamental shift in how people view their furry, feathered, and scaly companions.

A key driver behind this expansion is the escalating cost of advanced veterinary medicine. As technology advances, treatments for pets now include complex surgeries, cancer therapies, and diagnostic tools like MRIs, which can easily rack up bills in the thousands of dollars. For instance, the average cost for canine cruciate ligament repair surpassed USD 4,700 in 2024. This financial burden is pushing pet owners to seek financial protection, making pet insurance a necessity rather than a luxury.

From a market perspective, dogs dominate the landscape, holding a commanding 60.48% market share in 2024. This is largely due to their high adoption rates and the associated medical costs. However, the cat segment is also growing rapidly, with a projected fast CAGR as awareness of feline health issues and the popularity of cats as indoor pets continues to rise.

In terms of coverage, the "accident & illness" segment is the undisputed leader, accounting for over 85% of the market share in 2024. This is a testament to the fact that pet owners are primarily concerned with covering catastrophic and unforeseen medical events. Direct sales channels, offering convenience and often lower premiums, are also leading the market, capturing over 34% of the share in 2024.

Geographically, Europe holds the largest market share, but North America is a close second and is seeing explosive growth. In fact, the Gross Written Premium (GWP) for pet insurance in the US and Canada surged from USD 1.56 billion in 2019 to USD 3.91 billion in 2023, a staggering increase of over 25%. Emerging markets in the Asia-Pacific region, especially India and China, are also showing immense potential, fueled by rising disposable incomes and a growing awareness of pet health.

The future of the pet insurance market is bright. The industry is rapidly adopting technological innovations, such as AI-powered claims processing, telemedicine, and even wearable tech for real-time health monitoring. This digital transformation is streamlining operations, improving customer experience, and making policies more accessible and affordable. As more pet owners recognize their pets as family members, the demand for comprehensive and personalized coverage will only continue to rise, solidifying the pet insurance market's position as a lucrative and essential sector in the global economy.

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Author's Bio:

Nilesh Shinde

Senior Market Research expert at The Insight Partners