• Scope of Report
• Report Methodology

Market Size and Composition

• Total Pet Insurance Market Revenues Up 342% Since 1998
• What’s Wrong with This Picture?
• Great Expectations
• Market to Reach $667 Million by 2007

The Competitive Situation

• VPI Out Front
• Figure 1-1: Share of U.S. Pet Insurance Market Revenues by Company, 2002 (percent)
• Targeting Pet Owners—Directly
• Banfield the One to Watch

The Consumer

• The Quintessential Purchaser
• Pet Owners Online
• Household Ownership Rates at 32% for Dogs, 25% for Cats
• Table 1-1: Household Penetration Rates for Selected Pet-Owning and Pet Care Product Classifications, 2000 vs. 2002 (U.S. adults)

Looking Ahead: Trends and Opportunities

• The PETsMART/PETCO Probability
• Entrants from Retail, Financial, and Foreign Camps
• Increased Competition Will Mandate Change

Chapter 2: The Market
Introduction

• Market Definition
• Range of Coverage
• Typical Restrictions
• Other Services
• Equine Insurance Excluded
• Figure 2-1: U.S. Pet Insurance Market Revenues, 1998-2002 (in millions of dollars)

Market Size and Composition

• Total Pet Insurance Market Revenues Up 342% Since 1998
• Table 2-1: U.S. Pet Insurance Market Revenues, 1998-2002 (in millions of dollars)
• Policies for Dogs Account for Lion’s Share of Market
• Figure 2-2: Share of U.S. Pet Insurance Market Revenues by Animal Type, 2003 (percent)

Market Drivers

• Overview
• Table 2-2: Average U.S. Household Expenditures on Pet Care Products and Services, 1994-2001 (in dollars)
• Table 2-3: Average U.S. Household Expenditures on Insurance, 1994-2001 (in dollars)
• What’s Wrong with This Picture?
• Sharp Increases in Spending on Veterinary Services
• Table 2-4: Aggregate Expenditures on Veterinary Services by U.S. Pet-Owning Households, 1996, 2001, 2002 (in millions)
• Table 2-5: Average Expenditures on Veterinary Services by U.S. Pet-Owning Households, 1991, 1996, 2001 (in dollars)
• Table 2-6: Total Number of Visits to the Veterinarian by U.S. Pet-Owning Households, 1996 vs. 2001 (in millions) Humanization of Pets a Key Trend
• Table 2-7: Pets as Family Members, 2002 (percent)
• The Growing Pet Population
• Table 2-8: U.S. Population of Cats and Dogs, 1981-2002 (in millions)
• Table 2-9: Number of Cat and Dog Owners by U.S. Households and Share of Population, 1981-2002 (in millions)
• Table 2-10: Percentage of U.S. Households That Own at Least One Pet, 2001 (percent)
• The Aging Pet Population
• Figure 2-3: Share of U.S. Dog Population by Age of Pet, 1996 vs. 2001 (percent)
• Figure 2-4: Share of U.S. Cat Population by Age of Pet, 2001 (percent)
• Most Growth Will Be Marketer Driven
• Procter & Gamble’s Iams Unit Teams Up with VPI
• Veterinarian Channel Prospects a Mixed Bag
• Increased Demand from Company Benefits Programs
• Consumer Reports Article Not Good News
• Human Marketers Will Birth “New Demographic”
• Figure 2-5: Projected U.S. Pet Insurance Market Revenues, 2002-2007 (in millions of dollars)

Market Projection

• Market to Reach $667 Million by 2007
• Table 2-11: Projected U.S. Pet Insurance Market Revenues, 2002-2007 (in millions of dollars)

Chapter 3: The Competitive Situation
Competitive Overview

• VPI Out Front
• Table 3-1: U.S. Marketers of Pet Insurance, 2002
• Figure 3-1: Share of U.S. Pet Insurance Market Revenues by Company, 2002 (percent)
• Figure 3-2: Share of U.S. Pet Insurance Market by Number of Active Policies, 2002 (percent)
• Cross-Market Strategies
• Targeting Pet Owners—Directly
• Figure 3-3: Total National Consumer Advertising Expenditures by Veterinary Pet Insurance by Month, 2002 vs. 2003 (in thousands)
• Table 3-2: Total National Consumer Advertising Expenditures on Pet Insurance, 2000-2003 (in thousands)
• The Managed Care Contingent
• Banfield the One to Watch
• The BluePaws Story
• PetAssure and AmeriPlan
• The Canada Contingent
• The U.K. Contingent

Competitive Profile: Hartville Group, Inc.
(Petsmarketing Insurance.com Agency, Inc.)

• Company Overview
• Figure 3-4: Hartville Group Pet Insurance Revenues, 2000-2002 (in thousands of dollars)
• Corporate Culture a Financial/Veterinary Hybrid
• Marketing Venues and the AKC Coup
• On the Web
• Public Relations

Competitive Profile: Midwest Pet Insurance Alliance

• Company Overview
• Corporate Culture and Marketing Approach
• Public Relations

Competitive Profile: Pethealth Inc. (Canada)

• Company Overview
• Figure 3-5: Share of Pethealth Pet Insurance Policies* by Type, 2002 (percent)
• Corporate Culture Based in Financial Markets
• Marketing Strategy Based on Direct-to-Consumer Distribution Model
• The Petfinder/ShelterCare Push
• Big New Alliances
• Goodbye Reader’s Digest; PETCO Next?
• On the Web
• Public Relations

Competitive Profile: Veterinary Pet Insurance Co. (VPI)

• Company Overview
• Figure 3-6: Veterinary Pet Insurance Revenues, 1998-2002 (in millions of dollars)
• Corporate Culture and Marketing Based in Veterinary Medicine
• Shifting Distribution
• Table 3-3: National Consumer Advertising Expenditures by Veterinary Pet Insurance, 2000-2003 (in thousands)
• Rallying Capital
• Affinity Marketing
• On the Web
• Public Relations Target Consumers and Veterinary Professionals

Chapter 4: The Consumer
Introduction
The Pet Insurance Consumer

• The Quintessential Purchaser
• Table 4-1: Demographic Characteristics Favoring Purchasing of Pet Insurance, 2003 (U.S. adults)
• Females Calling the Pet Care Shots
• Top Veterinary Services and Products
• Human Medical/Hospital Insurance Holder Demographics
• Table 4-2: Demographic Characteristics Favoring Ownership of Human Medical/Hospital Insurance, 2002 (U.S. adults)
• 65% of U.S. Consumers Obtain Medical/Hospital Insurance from Place of Work
• Figure 4-1: Share of U.S. Medical/Hospital Insurance Policy Owners by Source of Policy, 2002 (U.S. adults)
• Pet Owners Online
• Table 4-3: Use/Influence of Internet: Cat and Dog Owners vs. All U.S. Adults (percent)

Consumer Focus: Pet Owners and Pet Care Product Purchasers

• Household Ownership Rates at 32% for Dogs, 25% for Cats
• Table 4-4: Household Penetration Rates for Selected Pet-Owning and Pet Care Product Classifications, 2000 vs. 2002 (U.S. adults)
• Table 4-5: Household Populations for Selected Pet-Owning and Pet Care Product Classifications, 2000 vs. 2002 (U.S. adults)
• AVMA Places Pet Ownership Rates Higher
• Figure 4-2: Share of U.S. Households That Own at Least One Pet (percent)
• Baby Boomers Out Front
• Table 4-6a: Cat and Dog Ownership Indices: By Adult Age Bracket, 2002 (U.S. households)
• Table 4-6b: Cat and Dog Ownership Indices: By Adult Age Bracket, 2002 (U.S. households)
• Table 4-7a: Purchasing Indices for Selected Pet Care Product Classifications: By Adult Age Bracket, 2002 (U.S. households)
• Table 4-7b: Purchasing Indices for Selected Pet Care Product Classifications: By Adult Age Bracket, 2002 (U.S. households)
• Table 4-8: Cat and Dog Ownership Indices: By Household Size, 2002 (U.S. households)
• Table 4-9: Purchasing Indices for Selected Pet Care Product Classifications: By Household Size, 2002 (U.S. households)
• Pet-Owning Singles and Couples on the Ups
• Table 4-10: Percentage of U.S. Households that Own Pets by Life Stage, 1991, 1996, 2001
• The Aging U.S. Population
• Table 4-11: Projected U.S. Population by Age Bracket, 2000-2010 (in thousands)
• Table 4-12: U.S. Population Age 55 and Over, 2000-2010 (in thousands)
• Health Attitudes and Concerns of U.S. Pet Owners
• Table 4-13: Health Beliefs and Concerns: Cat and Dog Owners vs. All U.S. Adults (percent)
• Table 4-14: Humans and Pet Well-Being, 2002 (percent)
• South Is Top Region for Pet Ownership
• Table 4-15: Cat and Dog Ownership Indices: By Region, 2002 (U.S. households)
• Table 4-16: Purchasing Indices for Selected Pet Care Product Classifications: By Region, 2002 (U.S. households)
• Minorities Underrepresented Among Pet Owners
• Table 4-17: Cat and Dog Ownership Indices: By Race/Ethnicity, 2002 (U.S. households)
• Table 4-18: Purchasing Indices for Selected Pet Care Product Classifications: By Race/Ethnicity, 2002 (U.S. households)
• A High-Income Household Skew
• Table 4-19a: Cat and Dog Ownership Indices: By Household Income Bracket, 2002 (U.S. households)
• Table 4-19b: Cat and Dog Ownership Indices: By Household Income Bracket, 2002 (U.S. households)
• Table 4-20a: Purchasing Indices for Selected Pet Care Product Classifications: By Household Income Bracket, 2002 (U.S. households)
• Table 4-20b: Purchasing Indices for Selected Pet Care Product Classifications: By Household Income Bracket, 2002 (U.S. households)

Consumer Focus: Dog Owners

• Sharper Demographics for Dog Ownership
• Southern Skew for Dog Ownership
• Older Slant for Dog Households
• Figure 4-3: Household Penetration Rates for Selected Dog-Owning Classifications, 2002 (U.S. adults)
• Table 4-21: Selected High Consumer Indices for Households with Pet Dogs, 2002 (U.S. adults)
• Table 4-22: Demographic Characteristics Favoring Ownership of One Dog, 2002 (U.S. adults)
• Table 4-23: Demographic Characteristics Favoring Ownership of Two Dogs, 2002 (U.S. adults)
• Table 4-24: Demographic Characteristics Favoring Ownership of Three Dogs, 2002 (U.S. adults)
• Table 4-25: Demographic Characteristics Favoring Ownership of Four or More Dogs, 2002 (U.S. adults)

Consumer Focus: Cat Owners

• Leading Indicators for Cat Ownership
• 45-54 Is Top Bracket for Multiple-Cat Households
• Moderate Incomes for Multiple-Cat Households
• Figure 4-4: Household Penetration Rates for Selected Cat-Owning Classifications, 2002 (U.S. adults)
• Table 4-26: Selected High Consumer Indices for Households with Pet Cats, 2002 (U.S. adults)
• Table 4-27: Demographic Characteristics Favoring Ownership of One Cat, 2002 (U.S. adults)
• Table 4-28: Demographic Characteristics Favoring Ownership of Two Cats, 2002 (U.S. adults)
• Table 4-29: Demographic Characteristics Favoring Ownership of Three Cats, 2002 (U.S. adults)
• Table 4-30: Demographic Characteristics Favoring Ownership of Four or More Cats, 2002 (U.S. adults)

Consumer Focus: Health Products for Cats and Dogs

• 30% of Households Use Flea and Tick Care Products
• Flea/Tick-Control Products: Veterinarian-Dispensed vs. Retail Brands
• Heartworm-Control Products: Cats vs. Dogs
• Minority Skew to Pet Supplements
• Figure 4-5: Household Penetration Rates for Selected Treatment Products for Cats and Dogs, 2000 vs. 2002 (U.S. adults)
• Table 4-31: Demographic Characteristics Favoring Purchase of Flea and Tick Care Products, 2002 (U.S. adults)
• Table 4-32: Demographic Characteristics Favoring Purchase of Flea and Tick Care Products: For Preventative Use, 2002 (U.S. adults)
• Table 4-33: Demographic Characteristics Favoring Purchase of Flea and Tick Care Products: For Treatment Use, 2002 (U.S. adults)
• Table 4-34: Demographic Characteristics Favoring Purchase of Hartz Flea and Tick Care Products, 2002 (U.S. adults)
• Table 4-35: Demographic Characteristics Favoring Purchase of Advantage Flea and Tick Care Products, 2002 (U.S. adults)
• Table 4-36: Demographic Characteristics Favoring Purchase of Frontline Flea and Tick Care Products, 2002 (U.S. adults)
• Table 4-37: Demographic Characteristics Favoring Purchase of Sergeant’s Flea and Tick Care Products, 2002 (U.S. adults)
• Table 4-38: Demographic Characteristics Favoring Purchase of Heartworm-Control Products for Cats, 2002 (U.S. adults)
• Table 4-39: Demographic Characteristics Favoring Purchase of Heartworm-Control Products for Dogs, 2002 (U.S. adults)
• Table 4-40: Demographic Characteristics Favoring Purchase of Pet Food Supplements/Vitamins for Cats or Dogs, 2002 (U.S. adults)
• Figure 4-6: Purchasing of Pet Food Supplements/Vitamins for Cats or Dogs: By Adult Age Bracket, 2002 (U.S. Adults)
• Figure 4-7: Purchasing of Pet Food Supplements/Vitamins for Cats or Dogs: By Household Income Bracket, 2002 (U.S. Adults)

Chapter 5: Looking Ahead
Trends and Opportunities

• The PETsMART/PETCO Probability
• Entrants from Retail, Financial, and Foreign Camps
• Increased Competition Will Mandate Product Differentiation
• Table 5-1: Pets and Travel, 2002 (percent)
• Dollars, Sense, and Affinity Alliances
• Incentives and Agents
• Getting Serious Online
• Equine Insurance Market Cross Over

Appendix: Addresses of Selected Marketers