And, according to JoAnne Novak, vice president of new businessdevelopment and employee benefits for Hartville Group, another petinsurance provider, 70 million households own either a dog or acat.

A Growing Market
“Pet insurance as a whole is growing as a market,” says ChrisAshton, president of Petplan. “Not every employee will be eligiblefor it, but statistics show that more than 60 percent of householdshave at least one pet, so it's a good market for brokers.”

The increased demand has led to an increased number ofproviders, according to Chris Middleton, director of sales andmarketing for Pets Best Insurance. “There have been a lot of newentrants into the market, both in terms of new companies, as wellas licensing arrangements of insurance companies that have been inbusiness for awhile that are now partnering with animal welfaregroups,” he reports.

Still, there seems to be enough business for everyone. “Werecently had an informational review with one of our brokers,”Middleton adds. “During the conversation, she said she's receivedalmost as many calls for pet insurance over the last three weeks asshe had received for the whole past year.” Another providerenjoying growth is VPI.

“We're finding that, in the voluntary benefits space, thepopularity is increasing significantly,” reports Deana Lycett,director, group accounts. “We experienced double-digit growth lastyear, year over year. Brokers are becoming much more interested init, both the large houses and the independent brokers. They arereaching out not only to their groups, but to personal lines.”

Reasons for Growth
So why is pet insurance booming? Providers and brokers see sixmajor reasons:

1. More pets: These days, there's an increasingnumber of pet owners. One reason for this is that a lot of couplesare making the decision not to have children at all, with petsending up taking their place.

“A lot of couples who do decide to have children may also waitlonger to have them,” adds Jackson. “In the meantime, they may getpets.”  Still another reason is that a lot ofempty-nesters maintain their need to nurture after the kids leavehome. “So, when the kids leave home, they want a pet,” notesJackson.

But empty-nesters have been around forever. What's differentnow? The number of empty-nesters is growing because of the babyboomer generation. “They are a huge group these days,” heexplains.

2. Stronger bonds: According to Middleton, theway people feel about, and interact with, their pets is changing.“The dedicated pet owner is growing as a percentage of all petowners,” he states.

Jackson agrees, “Pets are becoming so much more a part of ourfamilies. In the past, a pet was a nice thing to have in thefamily, but it wasn't regarded as part of the family. These days, alot of people who call us can tell us their pet's date of birthimmediately. As such, the last thing they want is for economics tostand in the way of being able to provide medical care for theirpets.”

Jackson says there's also been a trend in recent years forpeople to want to do something meaningful in their lives, and onething they realize they can do is save the lives of pets that arehomeless. “There is a much greater awareness of the animal rescuemovement these days,” he says. “Statistics show that, each year, 8million dogs and cats go into shelters, but only half come out.

In fact, rescue is almost the 'green' movement of animalacquisition.” Years ago, he points out, the only people who gotrescued pets were those who couldn't afford purebreeds. “Thesedays, even very well-to-do people are choosing rescued pets,” hesays.

3. Increased awareness: The general awarenessof the availability of pet insurance is growing, according toMiddleton. “People are realizing that it is a valuable product.They also realize it is valid, in that a lot of well-known nameshave become involved in the industry.”

According to Geromy Bertrand, a client consultant with GallagherBenefit Services in Bellevue, Wash., which is affiliated with PetsBest Insurance, one challenge has been a lack of familiarity ingeneral among the public, who may not realize that it does offersome value.

However, this is slowly changing. When Bertrand sets up atbenefits fairs, he generally encounters three different groups ofpeople. “Some people will be really interested, and they jump onit,” he says. There are others who have no pets and pay noattention. “There is also a third group that may chuckle and walkoff,” he adds. “However, sooner or later, a lot of these peoplecome back, start asking questions, and then sign up.”

4. Increased vet costs: Veterinary costs arerising substantially faster than inflation, so people are realizingthat paying for pet healthcare can be very expensive, Middletonsays. And, according to Hartville's Novak, citing data from theAmerican Pet Products Association, $13 billion was spent on vetcare in 2010.  “Pet owners are starting to realize that amajor procedure for their pet can be $3,000 to $4,000,” saysJackson. “If they haven't experienced this directly, they usuallyknow someone who has had the experience.”

Costs can be even higher, according to Ashton. “Vet bills canreach $10,000 these days,” he says. “One reason is that there aretreatments and procedures available today that weren't availableeven 10 years ago, including cancer treatment, hip replacementsurgery, and even kidney transplants.”

5. Better reputation: While a lot of people arebecoming familiar with pet insurance for the first time, a lot ofothers who have been familiar with it and were driven away in theearly days are coming back because of an improved reputation.

Bob Isacsen, Managing Director, Risk and Insurance Services, forUNFCU Financial Services in New York, who is affiliated withPetplan, traces this history. “When pet insurance was firstcreated, they had little experience with underwriting, and ended upwith some very onerous exclusions,” he says. “One related topre-existing conditions.

For example, if a pet ended up with a condition near the end ofa policy's year, the policy would be renewed with that conditionbeing considered a pre-existing condition.” Another problem was thedefinition of “reasonable and customary.” “What a plan would paymight be half of what a veterinarian would charge,” he states. “Asa result of these types of problem, a lot of people got excitedabout pet insurance in the early days but ended up becominginfuriated and figured that it was just a gimmick.

That gave pet insurance a bad name for quite awhile.” Accordingto Isacsen, some of these companies and their old practices arestill in existence. However, there are other companies around thesedays that have a better reputation.

6. More employer interest: Another reason forthe increasing popularity of pet insurance is that employers aremore open to making it available to employees.

“One reason for this relates to the traditional human healthcare insurance challenges,” explains VPI's Lycett. “Employers arelooking for ways to add benefits that don't cost the companyanything, but meets the needs of employees.”  Ashtonagrees. “A lot of employers are looking for low-cost and no-costbenefits to offer their employees while they potentially cut backsome of the more expensive benefits,” he states.

“And since it is such a 'warm and fuzzy' benefit, it shows theemployees that the employer does care about them.” “Purchasing it as a workplace benefit allows employees tosave on premiums, in addition to the savings they can get by havingthe policy itself,” Novak adds.

Strategies
So what are the best ways to make pet insurance available to groupsand individuals? The first step is to select the best plan. “Themarket is crowded, and some of the plans can be confusing,” notesMiddleton. “Being able to offer a simple plan is important.”

“You need a plan that is comprehensive with very few exclusions,but also very simple to understand with no fine print,” addsJackson. “In the past, pet insurance in general suffered, becausemany of the plans had a lot of fine print and restrictivelanguage.”

This circles back to the earlier comments of Bob Isacsen: Besure to offer a plan with which people will ultimately be happy —one without a lot of hidden exclusions. When discussing the planwith employers, Novak recommends emphasizing that it is a goodmorale booster. “It provides a lot of goodwill,” she says. “We haveeven found that employees who don't have pets appreciate that theemployer offers it.”

And when discussing the plan with employees, the most importantstep is simply to make them aware of the product, just as you wouldany other insurance, according to Bertrand. “I just focus oncommunication and education,” he says. “If they don't know what itis and what it does, they won't sign up.” And a finalrecommendation: “Because so many people are so passionate abouttheir pets, one of the best door openers is simply to get employeestalking about their pets,” Lycett concludes.