Nationwide May Drop 100K Pet Insurance Policies | Insurify

A Nationwide spokesperson declined to clarify to Insurify what the underwriting changes are and which states will see the effects. But insurance industry journal P&C Specialist reported the insurer will stop covering 100,000 pets.

The growing pet insurance market

The pet insurance industry grew by nearly 22% from 2022 to 2023, according to the North American Pet Health Insurance Association (NAPHIA). At the end of 2023, total premiums topped $3.9 billion, NAPHIA reported.

The number of pets covered by insurance also increased by 17.1% during the same period, with more than 5.6 million pets insured at the end of 2023. Premiums averaged $626 annually for cats and $1,263 for dogs in 2023, NAPHIA said.

Escalating claims costs

As the number of insured pets grew, so did claims costs. Nationwide isn’t alone in grappling with higher veterinary costs.

Pet insurer Embrace reported its average claim cost across all states was $449 in the first quarter of 2024 — a 17.5% increase since 2021. But the highest claim it paid during the quarter was $37,633. In 2023, the highest single claim NAPHIA reported was $51,133.

Two California pet insurers, Metropolitan General and American Modern Home, also cited high claims and losses in requesting double-digit rate increases — which the state approved. Those increases of 56% and 23%, respectively, will affect more than 84,000 California policies.

What’s next? Notifications starting soon

Nationwide said it will begin notifying affected policyholders in spring of 2024 and continue through summer of 2025. The measures Nationwide could take include possibly non-renewing some policies, changing its acceptability guidelines for insured pets, or making changes to available coverages. Typically, these types of changes only affect new or renewing policies, not those currently in effect.

“We are proud that we consistently pay for covered claims each and every day, amounting to billions of dollars over the past four decades,” Nationwide’s statement said. “We are making these tough decisions now so that we can continue to be here for even more pets in the future.”