Pet-Protecting Partnerships

Pet health insurance seems to be emerging as a viable opportunity for licensing deals and other partnerships, with two significant agreements announced just since November 2021. Here’s a look at the current landscape:

• In December, pet e-tailer Chewy partnered with Trupanian, allowing the former to sell the latter’s pet insurance and wellness plans to the 20 million customers in its database. The insurance coverage will be sold under the Chewy brand and will be tailored to the needs of the pets and their owners. Trupanian’s policies are issued by its American Pet Insurance Co. division in the U.S. and by PetSmart-controlled Omega General Insurance Co. in Canada.

• In November, Group Nine Media, now part of Vox Media, licensed The Dodo to Petplan, leading to a rebrand from Petplan Pet Insurance to Fetch by The Dodo. Billed as a pet insurance and wellness brand, the offering combines comprehensive pet insurance, a community of animal lovers, and personalized content. In 2022, Fetch will debut a database called Fetch Forward consisting of information from pet experts, 16 years’ worth of clinical findings, and 150 million breed-specific data points, enabling pet owners to find recommendations on health and well-being tailored to their pet.

• In January 2020, celebrity dog behavioralist Cesar Millan (“The Dog Whisperer”) paired with Spot Pet Insurance, a start-up provider. The product is sold under its original brand name, with Millan serving as Chairman and promoting the insurance on his Cesar’s Way website. The brand is positioned as a simple and affordable option, with coverage for things like alternative therapies, vitamins and supplements, behavioral training, and preventative care.

• The ASCPA was a pioneer in this space, forging a licensing agreement with Crum & Forster for the ASPCA Pet Health Insurance Program in 2006. Last October, it added an online resource center with downloadable content and an interactive cost-of-care wheel for veterinary providers; the latter uses claims data and invoices to predict annual wellness expenses by breed. And in March, it paired with Waffle in a distribution deal that allows ASPCA insurance to be sold through the Waffle insurance platform. ASPCA Pet Health Insurance has insured more than 600,000 dogs and cats and processed more than 2.2 million claims, according to the non-profit’s website.

Pet health insurance grew at a pace of 23.4% per year from 2015-2020, per the North American Pet Health Insurance Association (NAPHIA) in its State of the Industry report published May 2021. The pet insurance industry consists of about 20 companies, NAPHIA says, plus 20 additional brands marketed by some of those organizations as white labels or co-brands. At the end of 2020, nearly 3.45 million pets in North America were insured.

Consumers spend a lot on their pets’ health and wellness. Spending for veterinary services for dogs alone has reached $407 per year for surgical procedures, on average, and $248 in routine wellness visits, according to the American Pet Products Association (APPA). It predicts growth of 5.8% for the pet products industry as a whole in 2021 (final figures will be released in March), to $109.6 billion. Sales of pet-related services outside of veterinary care are expected to increase 19.8% for the year, to $9.7 billion; that figure includes insurance as well as boarding, grooming, training, pet sitting, and pet walking.

Meanwhile, the number of pet-centric licensing programs continues to expand, with numerous characters, pet food brands, celebrity pet experts, and other types of properties extending into apparel and costumes, furniture, leashes and other accessories, cleaning products, food, and the like.

All of this suggests that there will be more licensed pet health insurance programs added to the list in the future. But simply pairing a pet-related property and an insurance company is not necessarily a recipe for success. This is a space where both partners must bring a strong level of trust and credibility to the venture, as the end result is a product that is very important to consumers and their families. Any problems that arise would have the potential to cause a great deal of harm to both the licensee’s and the licensor’s brand.