North American pet insurance premium grew 19.4% in 2025 while insured pets grew 8.5%, which puts average premium per insured pet up roughly 10% before any mix shift.
The enrollment number is the one most coverage leads with. The gap between the two is the pricing story, and Trupanion's Q1 2026 return to profit shows what the trade costs on the enrollment side.
Key Takeaways
- 19.4% premium growth against 8.5% exposure growth implies about 10% average premium growth per insured pet, before deductible or benefit-limit upgrades that would raise the true rate component.
- $6.2 billion of gross written premium across 7.6 million insured pets, up from 7.03 million, on data covering roughly 99% of North American pet health premium from about 30 carriers.
- Veterinary service prices rose 5.7% year over year against a 2.4% headline CPI reading, and have compounded to roughly 55% since 2019 while general prices rose about 40%.
- Trupanion's average monthly revenue per pet reached $85.79 from $77.53, a 10.6% increase that lands within a point of the market-implied figure.
- Total enrolled pets fell 2% to 1,637,665 while subscription pets grew 5%, and acquisition cost rose 18% to $315.
Premium Grew More Than Twice as Fast as the Pet Count
NAPHIA's 2026 State of the Industry release, published June 24, 2026, put enrollment at 7.6 million pets across the US and Canada, up from 7.03 million in 2024. Penetration remains low: 4.27% of US pets, 5.99% of dogs, 2.29% of cats, and 3.72% in Canada.
Gross written premium reached $6.2 billion in 2025, up 19.4%, more than double the pace of the pet count. The data covers roughly 99% of written pet health premium from about 30 carriers offering more than 20 branded products, so the gap is not a sampling artifact.
The arithmetic is direct. Dividing 1.194 by 1.085 and subtracting one gives roughly 10% growth in average premium per insured pet for the year, before any change in coverage mix, deductible selection or benefit-limit upgrades that would push the rate and trend component higher. That 10% is a market-wide blend across all 30-odd companies, netting carriers that moved faster against those that moved less.
The claim mix explains why. NAPHIA president Sammi-Jo Nevin framed the release around morbidity: "While headline-making emergencies occur, our data shows it's the common issues like ear infections and skin conditions that make coverage so essential." Gastrointestinal issues, ear infections, skin conditions, behavioral claims and allergies lead dog claims; GI issues, dental disease, urinary tract infections, behavioral claims and respiratory issues lead cat claims. None are catastrophic. All compound with veterinary fee inflation year over year.
A Clean Pricing Case, and Trupanion Is the Public One
Personal lines actuaries rarely get this clean a view of rate, trend and exposure interacting. Auto and homeowners blur geography, risk characteristics and multi-year filing lags together. Pet insurance strips most of that out: one animal is the exposure unit, frequency runs largely on species, breed and age, all known at underwriting, and severity runs through a single published external driver.
That driver has outrun general inflation for most of a decade. Veterinary service prices rose 5.7% year over year against a 2.4% headline CPI reading, and have compounded to roughly 55% since 2019 while general prices rose about 40%. Trend testing against one dated series is a materially easier defense than reconciling a dozen territory-specific development patterns. It is also easier for a regulator or a lapsing policyholder to read.
Trupanion is the only large pure-play reporting quarterly, which makes its Q1 the visible version. Net income was $4.9 million against a $1.5 million loss a year earlier, with adjusted operating income of $40.2 million, up 29%. Revenue grew 12% to $384.0 million and subscription revenue 16% to $269.5 million.
The figure that matters lines up with the market. Average monthly revenue per pet reached $85.79 from $77.53, a 10.6% increase, within a point of the 10% implied by the NAPHIA data, despite monthly rather than annual repricing and a book skewed toward accident-and-illness rather than wellness.
| Metric | 2024 | 2025 | Change | Source |
|---|---|---|---|---|
| North American insured pets | 7.03M | 7.6M | +8.5% | NAPHIA, June 2026 |
| North American gross written premium | ~$5.2B | $6.2B | +19.4% | NAPHIA, June 2026 |
| Implied average premium per pet | — | — | ~+10% | Derived from NAPHIA figures |
| Trupanion avg. monthly revenue/pet | $77.53 | $85.79 | +10.6% | Trupanion, Q1 2026 |
| Trupanion total enrolled pets | ~1.67M | 1.64M | -2% | Trupanion, Q1 2026 |
The loss-ratio backdrop supports reading this as catch-up rather than margin expansion. US statutory filings only began separating pet insurance from inland marine in 2024, and even then the top 10 writers hold roughly 90% of the market. AM Best's data through the first nine months of 2024 showed pet running above the rest of inland marine, which held in a post-pandemic 44% to 49% range. A segment above that band, where ten writers set the market, gives a 10% average rate move an actuarial basis.
Repricing Concentrates the Book, and Underwriting Friction Conceals It
Trupanion's enrollment shows the cost. Total enrolled pets fell 2% to 1,637,665 while subscription-only pets, the higher-margin core, grew 5% to 1,105,783. Average pet acquisition cost rose 18% to $315 from $267, and monthly retention held at 98.35%.
Together that describes a carrier repricing hard enough to shrink its lower-margin book, paying more per new subscription pet, and holding retention on the segment it wants.
The selection mechanism underneath is familiar. When base rates rise to track severity, the policyholders likeliest to lapse are the ones whose pets have generated few claims: the healthy young animal whose owner is paying a rising premium against a low realized loss ratio. The ones likeliest to stay have an older or chronically ill animal where coverage is paying claims.
What makes pet insurance different from auto is the switching cost. Moving carriers means a new pre-existing-condition exclusion, so the sickest animals are anchored by underwriting friction rather than by price competitiveness. Each repricing round therefore concentrates the retained book toward higher morbidity, and a 98.35% retention rate reports that concentration as strength. The question the figure does not answer is what the retained population's loss ratio looks like a year forward.
The auto cycle shows where the rest of it goes. That line ran the same sequence, a severity shock met by delayed rate action, and once enough rate earned through the combined ratio hit 91.9, best since 2006, after a direct loss ratio of 75.8 at the 2023 peak. Recovery that sharp drew regulators ordering rate decreases. Pet insurance has a 95%-plus protection gap to absorb increases against, which buys time rather than immunity, and a carrier that reads underwriting friction as price competitiveness finds the difference in its loss ratio a year or two after the rate action rather than in the same renewal.
Further Reading
- Seven Auto Insurers Clear $1 Billion in Q1 2026 as Rate Reduction Pressure Builds – the personal auto rate-catch-up cycle that pet insurance is now tracking with a lag.
- PwC's 2027 Medical Cost Trend Outlook – how a comparable severity-trend problem is playing out in group health rate filings.
- Stop-Loss Specific Claims Trend and Actuarial Adequacy – a specialty-line trend-selection problem with similar lag dynamics.
- WCRI's Medical Price Index and Workers' Comp Trend Selection – another line where an external fee-schedule or fee-inflation series drives the trend pick.
- BLS Data on Actuarial Employment Growth – broader labor-market context for specialty-line actuarial demand.
Sources
- NAPHIA, "North American Pet Insurance Adoption Continues to Grow as 7.6 Million Pet Parents Seek Peace of Mind," PR Newswire, June 24, 2026
- NAPHIA, 2026 State of the Industry Report, Industry Data section, naphia.org, June 2026
- Trupanion, Inc., Q1 2026 Earnings Release and Shareholder Letter, May 2026
- Trupanion, Inc., Q1 2026 Earnings Call Transcript, May 2026
- AM Best, "Best's Market Segment Report: Mixed Early Pet Insurance Results but Inland Marine Remains Strong," January 2025
- U.S. Bureau of Labor Statistics, Consumer Price Index, veterinary services and all-items series, February 2026 release
- S&P Global Market Intelligence via Insurance Journal, "US P/C Insurers Post Biggest Q1 Underwriting Profit in 25 Years," May 22, 2026
We are seeking feedback on how to improve the site and deliver high-quality content relevant to actuaries. Help us make it better.
Stay ahead with daily actuarial intelligence - news, analysis, and career insights delivered free.
Subscribe to Actuary Brew Browse All Insights