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How Equine Insurance Has Stabilized and Continues to Thrive

Galloping back from the coronavirus pandemic’s negative impacts, the equine insurance industry has benefited from factors including greater risk awareness and demand for outdoor activities.
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how equine insurance has stabilized and continues to thrive

Like almost every industry over the past year and a half, the equine industry has been impacted by the coronavirus pandemic. With events such as show jumping competitions postponed or cancelled and racetrack events that allowed only reduced numbers of spectators, the industry has taken time to recover.

However, the equine industry—which contributes approximately $122 billion to the U.S. economy, with total employment in terms of owners, employees, service providers or volunteers estimated at 1.7 million, according to the American Horse Council Foundation—seems to be riding out the storm and is ready to gallop ahead this year.

“The equine industry is strong right now partly due to the nature of the activity," says Jade Stanbrook, equine insurance broker, equine division, Foy Insurance. “Horseback riding was something that has become available much sooner than other activities during the coronavirus pandemic. People were able to socially distance and be outside, which helped tremendously to get stable doors back open." 

Additionally, “the economy has seen a boost in the purchase of new horses—their values have increased as well as the desire to insure them," says Tara Trout, director of farm and equine, AHT Insurance, a Baldwin Risk Partner. Echoing that sentiment, Stanbrook says “horse sales and horse prices are up and equine properties are selling for more, at least in the northeast markets." 

“The need for equine insurance has become more apparent to those whose financial stability was negatively impacted by the pandemic—this has had positive effects on the market as a whole," Stanbrook says. 

These changes have led to “the equine insurance markets seeing an increase in the volume of new business and with that a significant increase in claims," Trout says. “I think it is a healthy impact for the market, as long as underwriting and agents remain diligent and thorough in underwriting a client and the horse." 

Moving forward, the equine market continues its transition. While in 2014 many equine insurers balked at major medical and mortality coverage, today, “many equine insurers are offering not only mortality and medical coverages but also options for covering tack equipment and liability coverage for loss exposures that may arise from horse ownership," says Jeff Cruey, divisional president agribusiness and equine mortality, Great American Insurance Group. “These optional coverages are being offered at the point of sale and often as a package-type product, simplifying access to a broader range of products." 

“There also seems to be an increase in the number of equine boarding facilities being built," says Tom Rohrer, agribusiness underwriter, Westfield. “As rural housing developments get established, the need for equine facilities grows." 

Additionally, “large equine show facilities are also being built, because more people own and are showing horses," Rohrer continues. “Years ago, 4-H was the main outlet for kids to compete but now you can choose to go to a horseshow almost every weekend and you have multiple options based on location and the time of year." 

Yet, “similar to the property-casualty market, the equine insurance market is also going through a hard market due to the increased costs of veterinary care, catastrophic weather and wildfire risk, equine communicable diseases and the increased general claim activity during the coronavirus pandemic economy," Trout says. “Underwriting is conservative, and a review of the client's claims history for all horses, payment history and loyalty is a key factor in placing coverage and appropriate exclusions."

Without question, some sectors of the equine industry took more of an upfront hit than others during the pandemic, particularly the high-value sector of the market. “We expect rates to remain very competitive for the show horse segment into the near future," Cruey says. “Agents and policyholders will continue to face tighter capacity on limits offered by an insurer on higher valued animals in the racing, breeding segment, as well as an environment of higher pricing." 

Olivia Overman is IA content editor.