Toops Scoops: Of Pets and Premiums

Everybody loves pets — at least I do, and I have plenty of company. But can an independent agent make money from them? Based on demographics, it seems like a definite “yes.”

Consider these facts:

• According to the American Pet Products Assn.'s 2009/2010 National Pet Owners Survey, 62% of U.S. households (71.4 million homes) own a pet, which equates to 71.4 millions homes. In 1988, the first year the survey was conducted, only 56% of U.S. households owned a pet. While dogs lead the pack at 45.6%, other pets include  horses, fish, reptiles and “small animals” (probably nasty varmints like ferrets).
• While pet spending may not be recession proof, it is “recession resistant”: Americans are actually spending more money on all these pets: the survey above estimated the 2010 number at $47.7 billion — more than the GDP of countries including Tunisia, Croatia and Ecuador!
• According to Small Business Trends, the U.S. pet insurance market has gone “mainstream,” at about $332 million in premium in 2009, up from approximately $272 million in 2009 (a 22% increase) an expected to reach $400 million in 2010.
• Pet medical care has become almost as sophisticated as that of humans. According to MSN Money, the average cost of medical care over the lifetime of a pet can run between $2,000 and $6,000 (oh hell no…I'm here to tell you that's a drop in the bucket — check out my earlier blog post on dog surgery).

Program administrator NIP Group is betting on pets. Its new PetPro program covers the entire gamut of pet-related services — not just the typical professional liability and business risks of vets, but all the ancillary services as well: hospitals, labs, dog walkers and groomers, doggie day care, even not-for-profit animal shelters and rescue organizations.

The program, which launched this month and is currently being written in 46 states, was designed with input from NIP agents, who saw the need for a one-stop program for pet-related exposures, said Kelly Spencer, PetPro program manager. ”We built this from the ground up for this industry because we wanted to be the place to look for pet care professionals; from small businesses like one-person dog walkers through multistate animal hospital associations with hundreds of employees.”

Besides the undeniable growth of the business segment, NIP CEO Richard Augustyn was also instrumental in developing the program. He is involved in pet rescue organizations, and believes in the need for such a product. Kelly was brought into the picture because of her background as a veterinary technician, among other pet-related job descriptions.

NIP turned to its agents as the experts in the area, Kelly said. “A number of them specialize in insuring vets for professional liability coverage, but they saw more smaller businesses cropping up that no one would have thought of.” Dogsitters, for instance: “Many of them don't recognize that they need coverage, but there are plenty of exposures in the field that they need coverage for.”

And although a single dogwalker or two doesn't make for big business, the fact that PetPro bundles all related pet coverages makes it less labor intensive and more profitable for the agent. And because many pet businesses are combinations — many doggie day care businesses also do grooming, training and boarding — using the NIP program eliminates the need for the agent to get several different insurance policies with different ex dates. “Brokers are excited about fact that complex businesses can be handled in one place,” Kelly said.

Best of all to animal lovers, PetPro also mains the PetPro Charitable Fund (check it out on Facebook), in which a portion of the program's proceeds go to fund animal welfare causes.

So can an agent make money on pets? What do you think?