The purchase of Indiana-based PetFirst, for an undisclosed sum, is the latest sign of life insurers’ efforts to rev up revenue amid sluggish sales of individual life-insurance policies. Pet insurance—which bears some similarities to health coverage for people—has been one of the fastest-growing insurance products in recent years.
Founded in 2004, PetFirst is small and markets primarily through animal shelters and humane societies, the companies said. MetLife, which will add the policies to its menu for employers’ group-benefits programs, expects “enormous scale in no time,” said Ramy Tadros, president of U.S. business for MetLife, the second-largest U.S. life insurer by assets.
Pet insurance premium volume more than doubled in the U.S. to $1.28 billion in 2018 from $588 million in 2014, according to trade group North American Pet Health Insurance Association. A total of 2.15 million pets—mostly dogs—are insured.
Yet just 2.3% of U.S. pets are covered, the pet association’s figures show, making some industry executives bullish about growth prospects. In contrast, almost a quarter of pets are insured in the U.K., where the product took off decades ago, according to other industry figures.
Much like pet owners’ health insurance policies, pet insurance bears annual premiums, deductibles and copayments tied to claims stemming from accidents and illnesses, according to trade group Insurance Information Institute. Nationwide Mutual Insurance, Trupanion and Healthy Paws are among the leaders in U.S. market share.
In the U.S., industrywide individual life-insurance policy sales have fallen about 45% since the mid-1980s, flattening out at about 9.6 million policies annually in recent years, according to Limra, an industry-funded research firm.
Thursday’s acquisition comes despite the fact that MetLife ditched its well-recognized Snoopy logo in 2016 as it was spinning off most of its historic core business selling policies to American households through agents.
The company regrouped in the U.S. selling life, dental, vision, disability income and other insurance through employers’ group-benefits programs, among other operations. The New York company also is considering potential acquisitions to expand the group-benefits business, people familiar with the matter said.
Other insurers have also moved to attract more business. Prudential Financial Inc., the biggest U.S. life insurer by assets, in October closed on a $2.35 billion acquisition of online startup Assurance IQ Inc., aiming to better reach digital-savvy consumers. Manulife Financial Corp.'s John Hancock unit recently launched life-insurance policies that include a behavior-change program and virtual medical clinic as part of marketing to people with diabetes.