Pet insurance premiums unleashed, profit margins surging as private equity expands its grip
Most states do nothing to control pet insurance premiums; the others don't do much
A reader wrote to us the other day, saying she had received a letter from the New Jersey insurance regulators telling her about a pending 17% increase in her pet insurance premium.
A little research led us to the rather startling finding that 17% is actually pretty good in New Jersey, where some companies have applied unsuccessfully for rate hikes as high as 65%. Even more startling is that New Jersey is the only state that requires pet insurers to apply for rate changes. Most states do next to nothing.
Maybe that’s why American pet owners paid $4.74 billion in pet insurance premiums in 2024 while their insurers paid out $3.07 billion in claims.
That means pet insurers as a group retained roughly 28–35 cents of every premium dollar for expenses and profit, with no legal obligation to return a single cent to policyholders even if they kept 60% of what they collected.
The New Jersey reader’s rate shock is widespread. A sampling of what consumers are reporting in other states:
California: Policyholders with Embrace reported 43% hikes for 2025 renewals; some Nationwide customers saw premiums double from $1,700 to $3,400 annually; one Healthy Paws customer reported a 73% increase. California approved Embrace’s 23.12% base rate filing, but actual individual increases exceeded that, according to a sampling of Reddit comments.
Most states: Unlike New Jersey, The Zebra notes, in most states “insurers can set and raise premiums without prior approval, leading to wide price variations.”
Maine saw a 24% increase in vet care costs in a single year (2023–2024) that flowed directly into premiums.
Industrywide trend
The pet insurance market has grown more than 20% annually for five straight years, according to industry reports. Gross written premiums hit $4.27 billion in 2023 and surpassed $4.7 billion in 2024.
That growth reflects both more policies being sold and higher premiums per policy — the average monthly cost now runs about $52 for dogs and $28 for cats nationally, per MetLife.
Private equity is a factor
If you’re thinking private equity might be to blame, your instinct is well-founded, and it runs even deeper than the vet side.
A single company — JAB Holding Company — now controls both a massive network of veterinary clinics and a dominant share of the pet insurance market. JAB owns National Veterinary Associates (1,000+ hospitals) and, through its Independence Pet Group, owns more than 20 pet insurance brands including ASPCA Pet Insurance, Figo, Spot, Pumpkin, AKC Pet Insurance, Pets Best, and PetPartners. Business Wire reported that JAB’s pet insurance portfolio is expected to generate over $3 billion in global revenue in 2024.
Separately, Warburg Pincus owns both Fetch Pet Insurance and Bond Vet. The Atlantic reported that Mars Inc. (yes, the candy company) owns over 2,000 vet practices under Banfield, VCA, and BluePearl brands. About 25% of general vet practices are now corporate-owned, up from roughly 5% a decade ago; for specialty/emergency practices, that figure is around 75%.
The conflict of interest concern is legitimate: a single private equity entity setting both veterinary service prices and the insurance premiums meant to cover those services faces no market pressure to keep either in check. As The Atlantic’s analysis noted, vet services rose 9.6% year-over-year in early 2024, compared to 3.5% overall CPI — and veterinary care costs are up roughly 60% over the last decade overall.
Other commonly cited causes
Beyond the PE consolidation issue, insurers and industry analysts point to:
Advanced treatments: Procedures once exclusive to human medicine (cancer treatment, orthopedic surgery, advanced imaging) are now routine in veterinary care and extremely expensive.
Pandemic-era pet adoption surge: Millions of new pets entered the insured pool, many with breeds prone to hereditary conditions.
Actuarial undercutting: Some insurers priced policies too cheaply to gain market share and are now correcting with large one-time jumps.
Claims utilization: More people are actually using their policies as awareness grows, raising loss ratios for insurers.
Is regulation the answer?
At this point, you may be ready to mount a crusade for tougher pet insurance rules in your state. But, hold on — do we know for sure that regulation is the answer to holding down costs?
An Insurify analysis found that the 14 states with pet-specific legislation have a combined average annual premium of $395, virtually identical to the national average of $396. NAPHIA, a trade group, reported that comprehensive accident-and-illness premiums rose 11% for dogs and 0.9% for cats industry-wide from 2023 to 2024 regardless of state regulatory environment.
Meanwhile, back in New Jersey, we told our reader that she was living in the best state for pet insurance. Her response: “If New Jersey really is the best state, that’s unfortunate because it’s damned expensive here.”