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Synchrony (SYF) Unit Ties Up to Offer Enhanced Pet Coverage

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Synchrony Financial’s (SYF - Free Report) subsidiary, Pets Best Insurance Services, recently teamed up with PEMCO Mutual Insurance in a bid to extend pet insurance coverage to the latter’s customers.

Shares of Synchrony lost 2.1% on Sep 8, replicating declines in broader markets.

With the help of Pets Best Pet Insurance, PEMCO policyholders will be able to choose from an array of pet insurance plans and cover expenses stemming from accidents, illnesses and routine care. The plan is tailor-made to address the diversified needs of one’s pet, while being affordable.

Apart from this, policyholders will be able to choose veterinary professionals of their choice to get their pets treated. They will also be provided with a digital services portfolio aimed at addressing concerns regarding their pets. Additionally, the PEMCO customers will be able to seamlessly submit claims and track the process via a mobile app.

The recent move highlights Pets Best’s sincere efforts to strengthen its presence across the Northwest and the U.S. pet insurance market. The launch reflects the company’s commitment to offer enhanced pet care by addressing treatment expenses or other costs related to owning a pet, which often generates financial stress for the pet parents.

The latest collaboration seems to be a time-opportune one as well considering the financial uncertainties stemming from the ongoing COVID-19 pandemic and escalating healthcare expenses. The tie-up aims to address the scenario of rising pet care costs prevailing in the United States. As stated by the American Pet Products Association (“APPA”), expenses incurred on pets totaled $103.6 billion in 2020, up from $97.1 billion in 2019. The same is expected to attain $109.6 billion this year.

However, pandemic induced volatilities did not impact the households’ interest to adopt pets. Per a 2021-2022 survey conducted by APPA, 70% of U.S. households, which amounts to 90.5 million homes, own a pet. The same survey was first undertaken in 1988, wherein 56% of U.S. households owned a pet.

The U.S. pet insurance industry holds promising growth prospects driven by growing willingness to adopt dogs and cats, and rapid emergence of numerous personal insurance providers offering insurance policies backed by maximum coverage plans and minimal premium offers. Per Verified Market Research, U.S. Pet Insurance Market is anticipated to witness a CAGR of 11.1% over the 2021-2028 period.

Pets Best, being a leading U.S. pet insurance agency, was acquired by Synchrony in 2019 to boost the latter’s CareCredit platform and tap growing opportunities in the rapidly expanding pet insurance market. Pets Best offers a diverse range of affordable pricing and coverage options to address several of the vet expenses that may arise from time to time. Last year, The Progressive Corporation (PGR - Free Report) joined forces with Pets Best as a result of which the former’s employers can avail pet insurance as a voluntary employee benefit. Initiatives similar to the latest one might augment CareCredit’s business, which in turn, is likely to drive parent company Synchrony’s top-line growth. The company has made significant investments to boost its CareCredit platform in a bid to simplify consumer financing and enhance customer experiences.

Zacks Rank & Price Performance

Shares of Synchrony, which carries a Zacks Rank #3 (Hold), have surged 79.8% in a year compared with the industry’s rally of 12.9%.

Zacks Investment Research
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Stocks to Consider

Some better-ranked stocks in the same space include Columbia Financial, Inc. (CLBK - Free Report) and Equitable Holdings, Inc. (EQH - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Columbia Financial and Equitable Holdings have a trailing four-quarter earnings surprise of 29.06% and 15.86%, on average, respectively.

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