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This idea was triggered by:


-recent direct and indirect anecdotal experience suggesting a significant growth opportunity going forward with a not so discretionary component

-reviewing prospects of different books of underwriting businesses at Fairfax and relevant competitors


The following remarks apply to the US market but I think similar conclusions can be reached for Canada, Europe etc.


Pet ownership is on the rise and correlates with rising pet expenditures, well above inflation. A large part of expenditures is related to veterinary care and services. I understand that pet insurance market history and penetration are variable. For instance, I understand that, in Sweden, policies were written way back and some report that 50% (!) of pets are insured. In the US, the "story" is more recent with, apparently, the first policy written in 1982 to cover the dog (dogs?) playing Lassie on television. In the US, market penetration has slowly risen from 1% to now about 3 to 5%.


IMO, Fairfax is very well positioned with their Crum & Forster Pet Insurance Group (including Hartville) and their PetHealth Inc. subsidiary.


I assume that there is resistance or at least passive assistance from veterinarians related to inertia to change and I wonder if growth now is mostly impeded due to a lack of awareness or lack of available options. Given the strong bond that pet owners develop, I wonder how much a pet owner would be ready to pay to obtain satisfactory coverage. I suspect a lot.


Anyboby holding a pet insurance policy?

It seems many people who hold such policies are not satisfied with coverage issues that are "discovered" along the way.


Entitlements bring mixed feelings but sometimes, it just may be better to not fight the trend.



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I have a couple of pets, one of which recently joined the family. 


Looking at this from a bottom up point of view, I suspect that a lot of smart people are going to wrong about the industry.  It's just going to be a lot smaller than people think because the TAM isn't the entire pet market - it's only really the people who are concerned about managing expenses, since pet insurance isn't required by law.  Predictability is important for that segment.  For the rest of us, the economics of pet insurance are pretty terrible. 

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I invested in Trupanion myself. It's the only company I've invested in that is not yet making a profit. This kind of company is normally too speculative for me, but this was very compelling.


Good shareholder letters.


Same! Writing this while on a Trupanion Ride-along today

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