The rise of Gen Z people going into the workforce, “Pet Parents” has also increased for whom their furry companion is not just pets, but more than that – like family.
According to APPA, over 66% of U.S. households own a pet, with Millennials and Gen Z leading the charge. As the number of pet adoption increase, their expectation of workplace benefits also changes because it has become about supporting emotional and financial wellbeing of employees and not just about dental or vision. This recognition for their pets, often seen as a crucial emotional support animal, shows some shifts in employee satisfaction and loyalty.
A Peak at Pet Insurance Gaining Traction
Though its full potential is yet to be realized and utilised, pet insurance is gaining traction as a compelling benefit that meets evolving needs. There are few reasons why it’s becoming a core benefit. A major driver would be rising veterinary costs. Surgeries, emergency care and after care often reach up to thousands of dollars creating financial stress for the pet parents. When organisations steps into cushion these unexpected financial shocks it reduces stress and distraction, improving focus at work. Also, companies with unique benefits like pet insurance stands apart in a broader benefit portfolio.
This may seem trivial from a traditional organisational standpoint, but we must view this through an emotional lens. Pets provide stability and companionship in ways thar are deeply personal and employees expects their workplace to acknowledge and support that.
But what’s in it for MGAs and Carriers?
The pet insurance is projected to grow 20.98% from 2025 to 2030, reaching $15.71 billion. But even with the growth it’s still underpenetrated especially in US, with only 4% of the pets insured, creating a white space opportunity for MGAs and Carriers to diversify, innovate and grow premium pools.
This presents an opportunity to move from traditional channels like online aggregators and vet partnerships, which has scaling limitations – high Customer acquisition costs and price sensitive buyers.
Distribution through employer channels can change that equation as it reduces acquisition costs and built in trust to the benefits recommended by employers. This can also enable payroll deduction where premiums are auto deducted, resulting in improved lifetime value and retention.
Pet insurance in workplace is also a platform for High margin cross selling, enabling product bundling and higher ARPU. The longer retention cycle transforms a low premium line into a multi-product lifestyle vertical with repeated customer interactions. This can also include services that drive engagement like Wellness plans (vaccinations, grooming, annual checkups), Tele-vet services (which saw massive uptake post-COVID), Preventive care subscriptions and Loyalty or rewards programs. Being a part of this employer benefits ecosystem can help MGAs and carriers to strategically position themselves as employee wellness partners; by making the brand an emotional core of the customer’s lives.
Technology as the enabler
The main thing you must understand is that just like human health insurance, every pet is different. So, personalisation matters a lot, and technology enables carriers and MGAs to do it better. Offering tailored coverage based on breed specific risk, lifestyle facts like indoor vs outdoor pets, age, makes the policy “fit” for the pets. Rule based or AI powered personalisation engines helps in customisation, improved underwiring accuracy and boosts take-up rates. Gen AI capabilities assistance in image analysis helps in evaluating pet photos to identify breed and age for better coverage recommendations as well.
The leading carriers in US, Nationwide offers customised group pet insurance with employer programs and brokers as voluntary benefits. Nationwide Pet HealthZone® a one-of-a-kind platform uses claims data from a large amount of pet related data for personalised information about a pet’s specific health conditions and risk. It can create over 35,000 words of medicalized content with the help of Gen AI, speeding up the process.
Beyond personalisation AI can also enable an end to ed pet experience, making it more holistic for users. It can resolve the manual claims process and frustrations leading to it, in printing invoices, uploading bills and reimbursement waiting period. Many carriers leverage AI powered claims adjudication, instant payout or direct to vet payments, mobile apps for digital uploads. It can also automate reminders for better health monitoring, by notifying about upcoming checkups and vaccinations. A great example is Trupanion, offering worksite plan and they directly pay the vet hospitals with VetDirect Pay™. This system process the claims in real time and pay the veterinarians directly at checkout, eliminating the need to pay out of pocket and wait for reimbursement. Additionally, they also partnered with Aflac to offer employee benefits with pet insurance specifically for organisation with 1000+ members.
How is Pet Insurance Becoming A Core Work Benefit?
Plugging into existing HR and payroll ecosystemsto integrate offerings into platforms like Workday, Gusto ADP, Zenifits etc. can help in scaling benefits across multiple employers and geographies. This is as easy as they do for health or dental, removing the manual setup and limiting the extra logins, increasing adoption. Also, real time dashboards and analytics can be used in giving visibility on the engagement levels, claims frequencies and enrolment rates validating the ROI of pet insurance. Paychex Insurance Agency provides a smooth data transfer between payroll and benefits with their comprehensive solution, Paychex Flex®. This offers a seamless integration with voluntary insurance plans, which includes pet insurance as well for an automatic premium deduction from the employees’ pay checks.
Another technology trend that is emerging, MGAs and carriers can look out is for the pet wearable tech like smart bio sensing collars that send notifications about the pets’ heath and vital signs.
From Perk to Strategic Growth Avenue
So, thinking forward Pet Insurance is not just perk- but a chance for Insurers to tap into a financially viable and technologically scalable line of business. With API driven platforms, AI driven claims ecosystem and embedded distribution can actually lead lifestyle driven insurance with a measurable impact.
Ardra Girish
Growth Specialist