Pet Insurance Gains Ground Amid Veterinary Care Challenges
The veterinary industry has faced declining clinic visits and reduced spending for years. While increased prices and a surge in new pet owners have helped maintain revenue, the current economic climate presents new challenges for both pet owners and veterinary teams.
Financial Constraints Impact Pet Care
A 2023 survey, led by Trupanion, paints a concerning picture:
- Pet owner finances affect 6 out of 10 treatment plans.
- Three in five pet owners delay care due to costs.
- Pet owners would halt treatment if the bill reached $1,500.
Increased financial barriers force pet owners to make difficult choices between their financial stability and their pet’s health, or even life. As non-essential spending on pet care takes a backseat, visit volumes may decrease. This threatens both pet health and the veterinary industry.
Pet Insurance as a Solution
Pet insurance has emerged as a key solution to this crisis. Hundreds of thousands of veterinary practices and pet owners have recognized its value. Amid growing economic uncertainty, it assists in managing care costs and mitigating the financial impact of inflation.
Shifting Perspectives
Support for pet insurance grows as more pet owners and vet teams experience its immediate value.
In the past 5 years, Trupanion’s paid invoices tripled, from $1 billion in 2020 to $3 billion. This suggests a critical perspective shift among pet owners and veterinary professionals. This growth signifies increasing recognition of high-quality pet insurance benefits.
Trupanion’s Impact
Trupanion has seen substantial growth in payouts and claims since 2020:
- Payout amounts increased by approximately 180%.
- The number of claims rose roughly 141%.
- From 2015 to 2019: Total payout was $780,023,284 covering 3,946,682 invoices.
- From 2020 to 2024: Total payout reached $2,176,191,791 encompassing 9,513,220 invoices.
Data also reveals a positive impact on in-house pharmacy sales. Hospitals with an increasing insured client base benefited from higher pharmacy sales. Those utilizing Trupanion software installed by 2022 saw a 3% increase in pharmacy-related claims in 2023 compared to 2021.
Technological Advancements Drive Growth
Software advancements are facilitating the growth of pet insurance.
Technologies, like Trupanion’s Veterinary Portal and VetDirect Pay, use AI and large language models. This allows providers to adjudicate claims and pay invoices directly to practices instantly in real time. These tools eliminate paperwork and reduce financial discussions.
Since Trupanion exceeded $2 billion in paid claims in 2023, they have averaged $48.6 million in monthly payments to veterinary practices and pet owners — roughly $1.5 million per day. Approximately $23.2 million of this has been paid to practices through VetDirect Pay. Currently, 85% of claims submitted through the Veterinary Portal are paid directly to veterinary practices.
There has been an approximate 164% increase in Veterinary Portal use since 2019, growing from around 4,100 active hospitals to over 10,800 today.
Addressing Concerns and Embracing Change
Despite growth in paid claims, concerns persist about the practicality of pet insurance. Most pet insurances use a reimbursement model. These models require pet owners to pay upfront and then file for reimbursement, thereby failing to address immediate financial constraints.
This model generates cumbersome paperwork and financial limitations. Skepticism regarding pet insurance viability has resulted from these experiences.
Trupanion’s system expedites the process by paying their portion of veterinary invoices directly to practices. This results in fewer barriers to care and stronger client-veterinarian bonds.
According to a 2023 Trupanion-led survey, 77% of veterinary professionals prefer clients with pet medical insurance. They want to provide best treatment and avoid stressful financial conversations, yet over 80% don’t have a single insured patient.
Quality pet insurance provides solutions to industry challenges. By embracing a proactive care model, where the best veterinary care is standard, a world is within reach where pet care is accessible to all.
References
- Larkin M, Nolen RS. Less foot traffic at veterinary practices spells declining revenue. American Veterinary Medical Association. Published October 29, 2024. Accessed January 31, 2025. https://www.avma.org/news/less-foot-traffic-veterinary-practices-spells-declining-revenue
- Larkin M. Pet population continues to increase while pet spending declines. American Veterinary Medical Association. Published October 10, 2024. Accessed January 31, 2025. https://www.avma.org/news/pet-population-continues-increase-while-pet-spending-declines
