How Pet Insurance Helps Drive Revenue and Client Retention in Veterinary Practices
Pet insurance is more than a financial safeguard for pet parents—it’s a strategic asset for veterinary practices. Recent studies have shown that insured pets not only visit their veterinarians more frequently but also generate higher revenue per patient. In an increasingly competitive landscape with rising costs of care, understanding the business impact of pet insurance is crucial for practice sustainability and growth.
Research indicates a clear correlation between pet insurance and increased spending on veterinary services. For example, studies sponsored by Nationwide have revealed that insured dogs visit the veterinarian approximately 4.17 times per year, compared to only 2.41 visits for their uninsured counterparts. In addition, revenue per insured patient is significantly higher, with some studies noting increases of up to 90% compared to uninsured pets.
For veterinary professionals, understanding pet insurance can not only help clients but also improve practice revenue and client retention.
Pet Insurance Industry Growth
The pet insurance industry has seen significant growth, with gross written premiums exceeding $4 billion in 2023. More pet owners recognize the value of insurance in covering unexpected veterinary expenses, leading to a steady rise in insured pets. Be aware though that, despite steady growth, pet insurance still covers only a single-digit percentage of pets in the U.S. and Canada, so veterinarians should remain realistic about its current market penetration.
How Pet Insurance Benefits Veterinary Practices
1. Increased Revenue Stability
Pet insurance reduces financial barriers, allowing clients to approve more comprehensive treatment plans. This leads to:
- Higher acceptance rates for diagnostics, surgeries, and specialist referrals.
- More predictable revenue streams, reducing reliance on financing options.
2. Improved Client Retention and Compliance
Insured clients are more likely to follow through with routine and urgent care because they are less worried about high out-of-pocket costs. Studies show that pet owners with insurance:
- Visit the vet more frequently.
- Adhere to recommended treatments.
- Remain long-term clients, boosting practice loyalty and retention.
3. Reduced Financial Stress for Veterinary Teams
Without insurance, cost discussions can be challenging for veterinarians and staff. Insurance coverage can help shift the focus from cost concerns to patient care, allowing teams to recommend optimal treatment plans with fewer financial concerns from pet owners.
Challenges and Considerations for Veterinary Practices
1. Understanding Policy Variations
Not all pet insurance policies cover the same conditions. Some have:
- Exclusions for pre-existing conditions.
- Reimbursement limits and waiting periods.
- Different deductible structures.
Veterinary teams should educate clients on insurance early in their pet’s life to maximize coverage benefits.
2. Managing Administrative Burdens
Direct billing is growing. Processing insurance claims can take time, and some practices hesitate to get involved. However, many providers now offer:
- Direct billing options for seamless payments.
- Dedicated support teams to assist veterinarians.
Practices should consider the pluses and minuses of working with reputable providers to ensure smooth interactions for both staff and clients.
3. Client Education is Key
Many pet owners don’t fully understand pet insurance. Veterinary teams should:
- Provide general guidance on how insurance works.
- Direct clients to comparison websites to find the right plan.
- Explain the benefits of enrolling pets while they are young.
See our companion articles in this blog section that give guidance and reference sources.
Final Thoughts
Pet insurance is an increasingly valuable tool for both pet owners and veterinary practices. While market penetration remains low, its growth trajectory suggests a greater role in the future of veterinary care. By educating clients, partnering with insurers, and streamlining claims processes, veterinarians can enhance patient care, improve client loyalty, and drive financial growth in their practice.
Sources
For further reading on the business impact of pet insurance, consider these valuable resources:
- How Offering Pet Insurance Can Help Drive Revenue at Your Veterinary Practice – ezyVet
- How Pet Insurance Affects Your Veterinary Practice – Zoetis
- The Impact of Pet Health Insurance on Dog Owners’ Spending for Veterinary Services – National Center for Biotechnology Information (NCBI)
- Pet Insurance: Do the Numbers Still Add Up? – Vet Times
- How to Discuss Pet Insurance With Clients – Today’s Veterinary Business
- 15 Benefits of Pet Insurance for Veterinary Teams – Pawlicy Advisor
- The Importance of Pet Insurance for Veterinarians – LifeLearn
- Is Pet Health Insurance Able to Improve Veterinary Care? Why Pet Owners Do Not Insure Their Pets – NCBI
- Simple Strategies to Retain Clients for Busy Veterinary Practices – Vetsource
- Has Veterinary Insurance Failed U.S. Pets? – Veterinary Practice News
- The Impact of Pet Insurance on Employee Engagement and Retention – Fetch by The Dodo
- Pet Insurance in the US: A ‘Failure’? – VIN News
- Improving Client Retention Through Exceptional Customer Service – Veterinary Hospitals Association
- How to Simplify Pet Insurance (and Make Life Easier for Your Admin Team) – ezyVet
