Pet Insurance - UK - August 2016
“The pet insurance market is currently experiencing strong growth, as more owners choose to take out cover. While Mintel expects this to prevail over the next few years, providers must continue to seek efficiencies, in order to contain costs and remain competitive. They must also find a balance between offering multiple products and cover levels – to appeal to a broad consumer base – and simplifying their propositions, so they are as easy to understand as possible.”
– Sarah Hitchcock, Senior Analyst – Financial Services
This report discusses the following key topics:
- Target parents with family-friendly policies and attractive packaged solutions
- Quality is as important as price
Despite the challenges, pet insurers are not short of distribution partners. There are numerous companies selling policies in the UK, most of which are from the general insurance, veterinary and retail sectors. They compete for business in a fairly crowded marketplace, but also benefit from having a large target audience. Mintel’s online survey shows that 59% of UK adults have at least one pet in their household, most commonly a cat or a dog.
Mintel’s consumer research also reveals what proportion of pet owners have insurance and what type of policy they have taken out. It identifies the main concerns shared by pet owners, and assesses policyholder attitudes and buying behaviour. Lastly, it explores the level of interest in certain policy features and benefits, including preferred referral networks, and assesses future buying and switching intentions.
Products covered in this Report
Pet insurance is designed to cover medical expenses if the insured pet becomes ill or is injured in an accident. Policies will not normally cover routine visits to the vet or events that could have been anticipated, such as routine vaccinations and neutering. Most products cater for cats and dogs, although there are policies available for rabbits, horses/ponies and more exotic pets.
Policies fall into three main categories:
- High-level/lifetime policies – provide the most comprehensive cover, paying out a set amount for veterinary treatment (which may be a total amount per year or a set amount per condition), which renews each year in line with the renewal of the policy. They cover ongoing and recurring illnesses for the lifetime of the pet, providing the policy remains active (ie the premiums keep being paid). As a result, lifetime policies are often the most expensive option. Moreover, premiums will rise with the age of the pet, and as a result of any claims made.
- Mid-level/‘per condition no time limit’ policies – provide cover for conditions up to a set amount but there is no time limit placed on how long the policyholder can claim for. Once the amount has been reached the condition is then excluded from any future payouts.
- Basic-level/time-limited policies – provide cover up to a maximum amount per condition for a limited period of time (usually 12 months). After this time, the condition is excluded, even if the policy is renewed. Any further treatment needed after the 12-month period would need to be self-funded. These policies tend to be the cheapest, but offer the lowest level of cover of the three main types.
In addition, there are low-cost accident-only pet policies, which only provide cover for accidents and exclude cover for illnesses.
What you get
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