Strengthening Your Clients’ Benefits Packages with Pet Insurance

Quick look: More than two-thirds of U.S. households own a pet, and a 2025 Wagmo survey found that 75% of working pet parents say their pet’s health directly affects their stress levels at work. For brokers, that makes employer-sponsored pet insurance a high-impact, low-cost benefit worth adding to your client conversations.

If you’re looking for the next benefit to add to your broker toolkit, pet insurance deserves a closer look. Forbes reports that 66% of Americans own a pet and 97% consider their pets family members. As veterinary costs climb, offering this benefit isn’t just a nice-to-have, it’s a smart business move for your small and midsized business (SMB) clients.

Let’s examine how pet insurance works, what’s driving demand, and three ways offering coverage can benefit businesses.

How does pet insurance work?

Pet insurance policies vary by plan, but most comprehensive options cover wellness exams, vaccinations, chronic conditions, and acute injuries or illnesses. More robust plans also address accidents, severe illness, hereditary conditions, and everyday preventive care like flea prevention.

The North American Pet Health Insurance Association (NAPHIA) estimates that 7 million American pets are currently insured (a 12% year-over-year increase), with total premiums totaling $5.2 billion (up over 20% from the prior year).

The most common dog insurance claims include:

• Gastrointestinal issues
• Ear infections
• Allergies
• Skin conditions (infections, allergies, dermatitis, etc.)
• Growths or masses

For cats, the top claims involve:

• Gastrointestinal issues
• Urinary tract, kidney, and bladder problems
• Ear infections
• Respiratory concerns
• Dental disease

The need and rise of employer-sponsored pet insurance

Despite widespread pet ownership, coverage rates remain low. NAPHIA data shows that just 5% of dogs and 2% of cats currently have insurance, which means the market opportunity for brokers to differentiate their benefits offerings is significant.

Veterinary costs are rising fast. According to a recent Wagmo survey of more than 1,000 full-time U.S. employees who own pets, the share of working pet parents facing bills of $1,000 or more jumped from 57% to 73% in just one year. Additionally, nearly one-third spent over $5,000 on pet healthcare, up from 15% the year prior. When all pet-related expenses are factored in, 84% spent at least $1,000 annually, and 21% exceeded $10,000.

Employers are taking notice. The Society for Human Resource Management (SHRM) reports that pet insurance as an employee benefit is growing in popularity, with 22% of organizations now offering it, up from just 14% in 2022. For brokers seeking voluntary benefits that are easy to pitch and genuinely valued, this is a trend worth noting.

3 benefits of pet insurance for employers

While pet insurance keeps animals healthier and helps employees manage costs, it can also deliver measurable business value to the organizations that offer it. Here’s how:

1. Enhances talent acquisition and retention

Pet insurance has become a notable differentiator in a competitive hiring landscape. According to Forbes research, 40% of employers believe their staff might leave for better benefits elsewhere, and Wagmo found that over half of working pet parents have considered changing jobs for better pet benefits.

2. Supports employee well-being and productivity

Pet health can have a substantial impact on the health and efficiency of a workforce. The Wagmo research mentioned above found that 75% of working pet parents say their pet’s health directly affects their stress and productivity at work. Further, approximately 70% report reduced output when their pet is sick or injured, and employees take an average of 7.3 days off per year to manage pet health issues.

Financial stress compounds the problem, with 30% of working pet parents stating they are significantly stressed about their pets’ healthcare expenses.

Pet insurance can help keep employees happy and focused at work by offering the ability to more easily manage any vet bills that might pop up.

3. Reinforces a culture of care

Pet insurance allows employers to acknowledge an important part of employees’ lives. For many, pets are family, and benefits that reflect that can strengthen engagement and connection.

Businesses can build on that by creating pet owner communities, hosting pet-friendly events, offering pet-related company perks, or matching employee donations to local animal rescue organizations. These programs develop a people-first culture that employees notice and remember.

Helping your clients fetch better benefits with a PEO

As interest in pet insurance grows, brokers who can incorporate it into a broader benefits strategy are well-positioned to stand out.

By working with a professional employer organization (PEO) like ExtensisHR, you can offer clients affordable access to top-rated pet insurance plans alongside a full suite of voluntary benefits, including:

• Supplemental health insurance, including accident, life, critical illness, and hospital indemnity coverage
• Financial and legal advisement programs
• Identity theft protection
• Commuter benefit programs
• Family-forming support
• Cancer care resources
• Discount programs
• And more

ExtensisHR’s employee benefits experts also simplify the HR side of the equation, handling planning, administration, and management for your clients while enhancing the overall employee experience.

And when employees need support, they can count on a customer service team that delivers what most PEOs can’t: a human response in 15 seconds or less, with a 90% same-day resolution rate.

Interested in exploring how pet insurance can fit into your clients’ benefits strategy? Contact ExtensisHR today to learn more about a partnership.