Dec 5 (Reuters) - U.S. life insurer MetLife Inc said on Thursday it would acquire privately-held pet health insurance company PetFirst, in a bid to diversify its product offerings and capitalize on a growing market opportunity.
The companies did not disclose financial terms of the deal, but said it was expected to close in the first quarter of next year.
MetLife said in a statement that the pet insurance market is "under-penetrated and fast-growing", noting that the annual growth rate for the industry has been more than 20% since 2014.
Petowners in the United States are becoming more willing to splurge on their pets, often opting to pay for expensive and cutting edge medicines to treat illnesses, such as cancer.
This has resulted in an increasing number of consumers opting for pet insurance. Research firm Global Market Insights estimates the market to be valued at about $10 billion by 2025.
MetLife's deal for PetFirst is also an example of how group life insurers are stepping up efforts to compete in a marketplace that offers financial wellness products and services to employees of their customers.
MetLife plans to offer pet insurance to employers through its group benefits programs, starting in the summer of 2020.
Indiana-based PetFirst, which was started in 2004, a year after the company's co-founder had to put his dog down, now covers health costs for about 40,000 pets.
Following the acquisition, it will continue to market its insurance through animal welfare societies and directly to consumers.
Guggenheim Securities acted as financial adviser and Mayer Brown served as legal counsel to MetLife. (Reporting by Tamara Mathias and Manas Mishra in Bengaluru; Editing by Rashmi Aich)