The news: Healthy Paws, a pet insurance company and a subsidiary of Chubb, and PetSmart announced a policy discount for PetSmart’s loyalty program members. The discount expands on their distribution partnership in which Healthy Paws policies are sold through PetSmart.

Trendspotting: Affinity partnerships have become a core model for pet insurance distribution. IInsurers market policies through pet stores and vet clinics, often at the point of need. Companies that retain detailed customer information, such as through rewards programs, can more effectively target customers. Chewy’s partnerships with Trupanion and Lemonade and PetSmart’s partnership with MetLife are examples of this model.

Zoom out: US gross written premiums for pet insurance climbed from $1.99 billion in 2020 to $4.74 billion in 2024, per the North American Pet Health Insurance Association. And in that same period, the number of insured pets rose from 3.1 million to 6.4 million. But just 5.5% of dogs and 2.0% of cats are insured nationwide, indicating significant room for expansion.

Implications for insurers: Pet policies, which are classified as P&C insurance, have lighter regulatory obligations compared to human health insurance. Affinity partners are core distribution channels that have frequent, high-intent interactions with customers, including day-to-day transactions, pet adoptions, and pet services. These partners often recommend specific insurers as part of the customer experience.

In effect, this reflects a shift toward an embedded insurance model spanning both physical retail and ecommerce.. Highly engaged, loyal shoppers are especially valuable because insurers can reach them at moments of need with targeted incentives, while also tapping into retailers’ direct marketing and digital channels.

Rather than prioritizing direct-to-consumer or broker-led distribution, insurers should treat these partner brands as primary sales channels. They meet customers where they are already spending, and where insurance feels like a natural add-on to concurrent purchases.