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Keeping Up With the Expanding Equine Market

Understanding the reasons behind the significant growth in the equine industry can present numerous opportunities for agents.
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keeping up with the expanding equine market

In February, the American Horse Council (AHC) released its “2023 National Equine Economic Impact Study" highlighting the contributions the equine industry makes to the U.S. economy. It found that the equine industry's total economic value increased significantly to $177 billion in 2023, up from $122 billion in 2017. Over 2.2 million jobs are linked to the equine industry, including breeders, trainers, veterinarians and farriers, as well as truck drivers, nutritionists, chemists, police officers and journalists, according to the report.

In certain states, the economic benefit from the equine industry is substantial. While there are over 9 million horses in the U.S., 307,000 are in Ohio, bringing real benefits to the state. Annually, the state holds the All American Quarter Horse Congress (AAQHC)—the largest single-breed horse show in the world—with 26,000 entries and attracting more than 650,000 spectators to the Columbus area.

“The show generates over $400 million for the central Ohio economy with $4.25 million given away in cash prizes to exhibitors and opportunities for college teams, 4-H and the National Future Farmers of America (FFA) Organization," says Lindsey Kerr, commercial lines senior market underwriter, agribusiness, Westfield.

In other parts of the country, events such as the Kentucky Derby, the Grand National, Churchill Downs, as well as the Olympics, continue to attract millions of spectators and generate substantial revenue.

Understanding the reasons behind the significant growth in the industry can present opportunities for agents. While some of the newest trends relate to lifestyle changes because of the COVID-19 pandemic, others are impacted by increasing affluence.

“During COVID-19, we saw a huge increase in both the cost of horses and horse sales and, at the height of the coronavirus pandemic boom, there just were not enough horses to meet the demand," says Jade Stanbrook, equine insurance broker, equine division, Foy Insurance. “We also found that breeding horses increased during that time."

Additionally, the continued expansion of the sports segment, which includes horse racing, show jumping, dressage and rodeo, has become a significant driver of demand for horse insurance. These owners have become more aware of the need to protect their investment through insurance coverage.

“There's been a big rise in the equine sports realm—there's a new frontier for the Western genre with pop media and pop culture, so this has brought quite a few reasons for the increase in the market," Kerr says.

Further, “we're seeing more affluence in certain demographic areas leading to the rise of urban equestrianism where people are seeking connection with leisure activities and basically using the horses as companions," Kerr says. This is leading to more horse owners seeking insurance coverage for their animals.

“COVID-19 brought a lot of new people and money into our equine arena and fortunately, since then, few have left," Stanbrook explains.

Yet, as the newer style of horse ownership expands, liability claims—bodily injury and property damage claims—are increasing. “These claims are not necessarily increasing for private boarding facilities or a private training facility, but rather more so for a lot of the 'open to the public facilities,' simply because a horse and rider were not a good match or people who have never ridden a horse before are injured," Kerr says. “I think that that's a big exposure that insurance companies are aware of and are trying to stay ahead of the curve on."

Further, “we're seeing a huge rise in the equine insurance market for property & casualty equine mortality coverages," Kerr says. “Coverage provided for training and boarding facilities has been booming."

This niche insurance market is continuing to gain prominence due to the substantial financial investments associated with horse ownership and the need to protect this investment.

“We [agents] are the key to keeping our clients current with the changing landscape of equine insurance," Stanbrook says. “Knowing your insurance space inside and out gives you a competitive edge."

Olivia Overman is IA content editor. 

Monday, July 8, 2024
Big I Markets