Pet Insurance and the New Veterinary Client

Did you know that over 5,000 companies, including Microsoft, Yahoo, Xerox and Hewlett-Packard, offer pet health insurance as an employee benefit? These companies think it will help them attract talented workers because of the strong emotional bonds people have with their pets.

So, who are these talented employees the companies hope to attract? Mostly millennials, who also happen to be the largest pet-owning group in the United States, the most sought-after new veterinary client, and coincidentally, the largest purchasers of pet insurance, according to a 2015 Harris Poll.

Clearly, times are changing. Maybe it is time to rethink the role pet insurance plays in veterinary practice. Could it be a new recruitment tool to attract and keep talented staff members? Equally important, could it be used to attract and keep new clients?

Here are more eye-opening facts to consider:

• Today, according to the 2016 State of the Industry Report from the North American Pet Health Insurance Association, close to 2 million pets are insured.
• Pet insurance revenue is growing at an impressive 12 percent a year. In fact, it has seen double-digit growth for the past several years.
• The trend suggests an increasing market awareness of pet insurance as well as a growing market demand for pet coverage, especially by younger pet-owning groups.

A Changing Market

Pet health insurance was introduced in the United States over 25 years ago. Today, about a dozen insurance companies are competing, and the market is growing for all.

What’s going on? The numbers suggest that the popularity of pet insurance may be part of a bigger economic picture and a new consumer focus on price and value. Money matters, and many consumers have limited disposable income. They are fussy about what they purchase, and they comparison shop online for almost everything.

These changes are not unique to younger customers, but rather a reflection of lessons learned during the last recession and the subsequent slow, multiyear recovery that followed. Today, consumers want to feel that they are making good choices and getting good value on the money they spend. These attitudes are likely to continue until people feel more confident and comfortable about the future and are willing and able to incur more debt in anticipation of having the means to pay it off.

While there are exceptions, especially in certain geographic areas, consider the big-picture financial circumstances of two of the largest groups of veterinary clients:

• Millennials, born between 1981 and 1997, are the largest pet-owning demographic group, representing 35 percent of all pet owners today, according to a 2017 American Pet Products Association (APPA) report. They are in the early stages of their careers, some collect entry-level salaries, and many are burdened with heavy school debt.
• Baby boomers, born between 1946 and 1964, are veterinarians’ second-largest customer group, representing 32 percent of pet owners. They are retiring at a rate of 10,000 a day and learning to live on limited incomes. In fact, median income across all demographic groups was $59,039 in 2016, according to the U.S. Census Bureau.

Let Pet Insurance Work for the Practice

Pet health insurance makes veterinary care affordable because cash-strapped owners can pay for it in bite-sized, monthly payments. It also gives veterinary practices a way to help pets whose owners may not otherwise be able to afford treatment. It’s a solution that fits the times and the veterinary client’s pocketbook. It may even help practices attract new clients and good employees.

Here are 10 easy things that hospital owners can do to harness the power of pet insurance for the good of the practice:

1. Post signs to alert clients that you accept pet insurance. Try wording like this: “We accept pet insurance … and we hope you never have to use it!”
2. When clients check in, ask if they have pet insurance. Note the insurance company and policy number in the patient’s record.
3. When insured clients check out, ask if they’d like an extra copy of the invoice to send to their insurance company.
4. If a client has pet insurance and you need to recommend diagnostics or treatment for a new condition, explain that the services might be covered by her insurance plan and that she should check with her provider. (Or offer to check for her.) This makes for an easier “yes” to necessary care, and it shows that you’re trying to help.
5. When clients have insurance claims, consider submitting the forms for them. NAPHIA’s survey of U.S. and Canadian pet owners found that 85 percent would be more likely to purchase pet insurance if their veterinarian submitted claims directly.
6. Share stories with the veterinary team about pets that did or didn’t have insurance so that your employees, in turn, can educate clients. The NAPHIA study showed that pet owners buy pet health insurance more for emotional rather than economic reasons. Sharing stories about pets like theirs helps clients connect emotionally with their desire to take good care of their cat or dog and motivates them to act.
7. Identify the one or two insurance companies you are most comfortable working with. Share this information with your team and recommend the companies to clients, who otherwise may be overwhelmed by the number of choices and policies. Giving two names allows clients to compare and choose but with the assurance that you think either one would be good.
8. If you don’t offer wellness plans, suggest to owners of certain cat or dog breeds that it might be smart to purchase an insurance policy offering an embedded wellness plan. For instance, the owners of Chihuahuas or Chihuahua mixes might benefit from a plan that includes dental cleanings, and they will appreciate you for recommending it.
9. Put pet insurance brochures into new puppy and new kitten kits and in the kits of clients with newly adopted pets. NAPHIA figures show that 67 percent of clients enroll their pets in insurance plans within the first six months of adoption. Limit the brochures to the one or two companies you prefer to work with, and insert a web link to these companies on your website.
10. Consider offering pet insurance as an employee benefit to attract and keep good employees. Offering pet insurance as a benefit helps you avoid the tax complications of providing discounted care to employees. It can be a controlled budget item — for example, $10 a month per full-time staff member — and it allows you to charge full price for procedures when an employee’s pet requires care.