More startups, which are trying to hire in-demand talent in a hurry, are adding pet insurance to an ever-growing menu of perks that includes catered lunches, unlimited vacation and discounts on gym memberships, commuting costs and legal and identity-theft insurance. Among the fast-growing tech companies that offer it are Sprout Social, Tempus Labs, Trunk Club and ActiveCampaign.
"For us, it's one aspect of what we think of as a benefits offering," says Maureen Calabrese, chief people officer at Sprout, which makes social-media management software for companies. Sprout's headcount roughly doubled in the past two years to about 500. "I'm not sure that's ever been the deciding factor for a candidate. But it is something that when people get here, it has been a popular thing."
Other employee benefits geared to the concerns of millennials have hit the market in recent years. Chicago-based Peanut Butter helps companies offer matching contributions to employees paying off student loans. Vacation Fund, a Toronto-based startup that was part of the most recent Techstars Chicago class, offers similar programs for vacation savings. For companies, another advantage of these new benefits is a less distracted workforce. With day-to-day worries like pet care taken care of, "you can just focus on your profession," says Denise Bindelglass, vice president of people at ActiveCampaign, a marketing-software maker that more than doubled headcount last year to 340. Only a handful of employees chose the coverage at ActiveCampaign. (Full reimbursement for Metra, CTA and Divvy is more popular.) "It has a low adoption rate," Bindelglass says. "The people who have it really appreciate it."
FETCHING GROWTH
The number of consumers with pet insurance grew 17 percent in 2017, and premium volumes jumped 23 percent, according to the North American Pet Health Insurance Association. There are about a dozen major companies in the $774 million industry, including Figo and Healthy Paws, which is owned by Aon. The biggest is Nationwide, which estimates that nearly half of Fortune 500 companies offer pet insurance as a benefit. Walgreens Boots Alliance of Deerfield is among them, and Chicago-based Boeing says it will begin offering the benefit next year. Jellyvision, a Chicago company that makes employee-benefits software, estimates about 10 percent of its customers offer pet insurance.
Most offer the insurance to their employees directly through providers at a discounted rate but don't pay or subsidize premiums as they would for employee health insurance. Coverage skews overwhelmingly toward dogs, and costs—which are largely based on breed, age and ZIP code—vary widely. But the average premium is about $600 a year, insurers say. Treatment costs are rising with advances in both medical care and expectations, as well as more reluctance by owners to euthanize aging pets.
"There's nothing you can't do for pets we can do in human health care," says Sproat. "The most common claim is a cruciate (knee) tear, which costs $2,500 to $6,000. A couple months ago, we paid a $22,000 claim for cancer treatment that saved a 4-year-old pet."