Nationwide is shedding about 100,000 pet policies, saying it needed to change underwriting and plan availability in some states to ensure a “financially sustainable future” for its pet insurance book.
The company said it currently insures more than 1.2 million pets. Nonrenewal notices are starting and will continue through summer next year, Nationwide said in a statement.
Inflation in the cost of veterinary care and other factors are behind the reduction in policies, Nationwide said.
According to the Bureau of Labor Statistics, the unadjusted cost of veterinary services for all urban consumers rose 7.1% in April from the prior-year month and 0.8% from the prior month.
Given the current environment, Nationwide said rates will remain “fair and appropriately priced for the plan, pet and breed.” The company issues one policy per pet. Plans start at $16 monthly.
The mutual said it will build its pet business by expanding its distribution network, forming new partnerships and deepening existing ones with Walmart, Petco and Unum.
Unum Pet Insurance was announced last month as a voluntary group benefit through Nationwide. Unum said pet insurance is becoming “one of the most desired benefit offerings for today’s workforce” as the costs of pet ownership rise.
Nationwide Pet is also available direct.
Nationwide, as Veterinary Pet Insurance, issued the first U.S. pet health insurance policy in 1982 for screen star Lassie.
Since then, Nationwide said it has paid billions of dollars in pet claims.
“We are making these tough decisions now so that we can continue to be here for even more pets in the future,” Nationwide said.
According to the North American Pet Health Association’s annual state of the industry report, enrollment, by about 30 companies offering the line, rose 16.7% last year to nearly 6.25 million pets in the United States and Canada at the end of 2023.
In the United States, more than three-quarters of 5.7 million insured pets are dogs. In-force gross written premium increased 21.6% to $3.91 billion in 2023.
NAPHA said policies in California accounted for 18.3% of insured pets, accounting for 20.1% of GWP in the United States in 2023. New York was next, with 7.5% of insured pets and 8.7% of GWP. Florida was third, with 6.2% of insured pets and 6.6% of premium.
Nationwide recently promoted Joel Carnes as chief pet officer. He succeeded Heidi Sirota. He was previously vice president of Nationwide’s pet operational excellence team.
Most operating entities of Nationwide Mutual Insurance Co. currently have a Best’s Financial Strength Rating of A+ (Superior) and A (Excellent).