What a pet insurer’s IPO tells us about America’s dog and cat obsession

US pet medical insurer Trupanion is expected to list its shares on the New York Stock Exchange this morning in an offering that is raising about $70 million for the Seattle company.

Trupanion is unprofitable, and has significant debt. Is this listing a sign of a stock market bubble?

That’s a question you have to decide for yourself. But pet health insurance seemingly taps into some macro trends, including Americans’ obsession with their pets. Americans are having fewer babies and buying more dogs, and are forecast to spend $58.5 billion on their pets this year compared to $34.4 billion a decade ago. Veterinary care will be $15.3 billion of that, according to the American Pet Products Association trade group.

Here are some takeaways from Trupanion’s filing with US regulators:

• There are 193 million pet cats and dogs in the US and Canada. One percent of them had insurance in 2013.
• In the UK, 25% of pets are insured and in Sweden 40% are.
• Trupanion insured over 181,634 cats and dogs this year in the US, Canada, and Puerto Rico, compared to 31,207 in 2010.
• Trupanion charges an average monthly premium of $26 per cat and $40 per dog.
• It cost Trupanion an average of $111 to acquire each new customer during the first quarter. The lifetime value once acquired was $610.
• Trupanion ended 2011, 2012 and 2013 with net losses of $3.9 million, $6.4 million and $8.2 million respectively. It had outstanding indebtedness of $47 million as of its July 7 filing.
• Company risk factors include “a pandemic that spreads through the pet population, tainted pet food or supplies, or an unusually high number of serious injuries.”