(Reuters) - Zoetis Inc (ZTS.N), the world’s largest animal health company, unveiled a new insurance unit in a bid to take advantage of rising pet ownership as Americans adopt furry companions to help relieve the loneliness of coronavirus lockdowns.
Adoption rates at animal shelters around the world have jumped as people try to cope with the isolation from shelter-at-home orders to avoid the spread of the new coronavirus.
New Jersey-based Zoetis on Thursday said its Pumpkin Insurance Services subsidiary will offer insurance plans to cover medical bills and veterinary visits for cat and dog owners.
“Pet insurance is, more than ever before, top of the mind for pet owners who just got a new pet,” Alex Douzet, chief executive officer of Pumpkin, told Reuters.
Historically, spending on pets has been found to increase during periods of recession and economic uncertainty, said Darryl Rawling, chief executive officer of Trupanion Inc (TRUP.O), a rival pet insurance company.
This is ideally when pet owners would consider seeking options such as pet insurance to avoid the risk of having to pay for costly medical procedures, Rawling added.
Pet insurance, although not new in the United States, is an under-penetrated industry, and only 2% of owners have any sort of insurance for their pets, Pumpkin estimates.
“If the pets go outside and become sick, or have an accident, pet insurance is one of the best ways to make sure that you can provide the right amount of care to your pets,” Douzet added.
Companies such as Metlife Inc (MET.N) have also recently entered the pet insurance market, betting on a trend of “pet humanization” where owners are more willing to pay for expensive treatments for diseases including cancer.
Depending on the pet’s age, breed and location, Pumpkin pet insurance members would pay around $1 to $3 a day for their premium, which covers 90% of eligible vet bills after members meet their annual deductible.
Apart from that, it also offers an optional plan for $15.95 per month for dogs and $10.95 per month for cats, covering the full cost of an annual check-up, vaccines, as well as a 12-month supply of Zoetis’ parasite prevention products that would be shipped to members’ homes.
Over 63 million American households owned dogs and nearly 43 million homes had cats as pets, according to a 2019 national survey by the American Pet Products Association. (bit.ly/2WfzKF5)
On average, the annual costs per household on pets reached $662 in 2018, according to a survey by the U.S. Bureau of Labor Statistics analyzed by a unit of LendingTree (TREE.O).
Reporting by Saumya Sibi Joseph and Manas Mishra in Bengaluru; Editing by Bernard Orr