What's happening in the US pet insurance segment? – AM Best

New report digs into the opportunities and challenges facing the market

What's happening in the US pet insurance segment? – AM Best

Marine

By Josh Recamara

The US inland marine insurance segment is seeing early signs of growth in the pet insurance niche, despite challenges, according to a new report from AM Best.  

While full-year data for pet insurance will not be available until March 2025, preliminary figures from the third quarter of 2024 suggest premiums could exceed $4 billion by the end of the year, with the potential to reach $4.5 billion. This marks the first year that pet insurance results have been separated from the inland marine segment’s overall premium and loss data. 

The report highlights that the loss ratio for pet insurance in the first nine months of 2024 was higher than for the broader inland marine segment, potentially due to growing demand for coverage against rising veterinary costs. Despite this, the inland marine loss ratio for the period remained in the post-pandemic range of 44-49%. The top 10 pet insurers control 90% of the market, making it highly concentrated. 

Pet insurance is just one component of the inland marine market, which primarily covers products and materials transported over land. Overall, the inland marine market has shown consistent performance over the past decade, with 2020 standing out as an anomaly due to the pandemic.  

Christopher Graham, senior industry analyst at AM Best, noted that inland marine continues to outperform the broader property/casualty (P/C) industry, driven by steady growth in construction and travel. 

Other key findings from the report include: 

  • Inland marine remains profitable, with a direct loss ratio more than 20 points better than the broader P/C industry. It has only had a worse loss ratio than the P/C sector once in the past 14 years, in 2020, due to contingency claims from pandemic-related travel and event cancellations. 

  • Direct premium written for inland marine grew by 6.9% in 2023, with the total more than double that of a decade earlier. While inland marine premiums continue to grow, the rate of increase has slowed, excluding pet insurance. 

  • The inland marine segment’s net combined ratio and profitability have remained consistent, with minimal variation from year to year. Even in 2020, inland marine’s net combined ratio was at least slightly better than that of the P/C industry. 

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