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Pet Insurance - UK - January 2010

This report examines recent developments in the pet insurance market, includes analysis of market size and share, and also looks at distribution trends within the sector. Mintel’s exclusive consumer research examines trends in pet ownership, the penetration of pet insurance among pet owners, the channels used to buy pet insurance and attitudes towards the features and benefits of pet insurance.

  • Almost 40% of adults live in a household along with at least one pet. While almost 30% currently have a pet insurance policy, more than 70% do not.
  • Specialist pet insurance providers dominate the market, with 45% of the market. Retailers such as Tesco and Sainsbury’s account for a further quarter of the market.
  • Price comparison websites are not particularly well developed in the pet insurance sector: only 17% of pet insurance policyholders claim to have used a price comparison site to find the best deal.
  • Just three in ten pet insurance policyholders have made a claim on their pet insurance policy.
  • The two most importance factors in persuading existing pet insurance policyholders to take out cover are, firstly, concern about paying veterinary costs, followed by ensuring lifetime cover.
  • Cost is the key consideration putting off non-policy holders. The opportunity to buy a low cost policy would influence positively potential take-up of cover among non-holders.

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Table of contents

  1. Issues in the Market

      • Key issues in the market
        • Note on consumer research
          • Abbreviations
          • Future Opportunities

            • Claims transparency may provide an opportunity to build trust
              • Increasing policy take-up among pet-owning families
                • Scope to expand pet insurance ownership among cat owners
                  • Expanding the appeal of multi-pet insurance policies
                  • Market in Brief

                    • Pet insurance market continues to grow
                      • Figure 1: Estimated value of the pet insurance market, by GWP, 2000-08
                    • Nearly three in ten pet owners have insurance
                      • Figure 2: Proportion of pet owners who have insurance to cover the cost of treatment, November 2009
                    • Specialist providers account for 45% of policies
                      • Figure 3: Channels used to buy pet insurance, November 2007 and November 2009
                    • Other consumer findings
                      • Allianz remains the largest pet insurance underwriter
                        • Figure 4: Pet insurance underwriter market share, based on GWP from 2008
                      • Advertising expenditure increases sharply in 2008/09
                        • Figure 5: Topline advertising expenditure in the pet insurance market, 2006-07-2008-09
                    • Internal Market Environment

                      • Key points
                        • Dogs and cats are the most widely-owned pets
                          • Figure 6: Top pets in the UK, 2009
                        • Dog population has grown faster over the last five years
                          • Figure 7: Ownership of dogs and cats, 2005-09
                        • Veterinary and health costs account for a third of spending on pets
                          • Figure 8: Proportional annual household spending on pets, 2007
                        • Veterinary and health costs increase significantly
                          • Figure 9: Annual household spending on pets, 2001/02-2007
                        • Rising veterinary costs
                          • Fears that low-cost policies could damage the sector
                          • Broader Market Environment

                            • Key points
                              • Consumers adopt a more conservative approach to finances
                                • Figure 10: GDP, PDI, consumer expenditure and savings, at current prices, 2004-14
                              • Implications for the pet insurance market
                                • Population trends will have implications for pet ownership
                                  • Figure 11: UK population trends, 2004-14
                                • No growth in the main pet-owning lifestage groups
                                  • Figure 12: Adult population trends, by lifestage, 2003-14
                                • Trend for smaller households will affect pet ownership
                                  • Figure 13: UK households, by size, 2005-14
                              • Competitive Context

                                • Key points
                                  • Alternatives to pet insurance
                                    • Self-insurance
                                      • Animal charities
                                      • Strengths and Weaknesses in the Market

                                          • Figure 14: Strengths and weaknesses of the pet insurance market, January 2010
                                      • Who’s Innovating?

                                        • Key points
                                          • Moving beyond the basics
                                            • Developments within niche pet insurance sectors
                                              • Pet insurance for tenants
                                                • Online channels help to improve claims handling
                                                • Trade Perspective

                                                    • Participating companies
                                                      • Recession leads to increased price sensitivity but sales remain strong
                                                        • Pet insurance market will continue to grow
                                                          • Evolution in distribution
                                                            • Claims inflation represents a major challenge for the future
                                                              • Future developments and innovations
                                                              • Market Size and Forecast

                                                                • Key points
                                                                  • Pet insurance market continues to show year-on-year growth
                                                                    • Figure 15: Estimated value of the pet insurance market, by GWP, 2000-09
                                                                  • Pet insurance ownership has increased annually
                                                                    • Figure 16: Have pet insurance, 2004-09
                                                                  • Forecast
                                                                    • Figure 17: Forecast of the value of the pet insurance market, by GWP, 2004-14
                                                                • Market Share

                                                                  • Key points
                                                                    • Allianz is top dog in UK pet insurance market
                                                                      • Figure 18: Pet insurance underwriter market share, based on GWP from 2008
                                                                    • RBS and RSA see market share increase
                                                                      • Figure 19: Overview of proportional market share for top pet insurance underwriters, 2006-08
                                                                  • Companies and Products

                                                                    • New entrants – a summary
                                                                      • About Thornside
                                                                        • Major players – company profiles
                                                                          • Agria Pet Insurance
                                                                            • Allianz Insurance plc
                                                                              • AXA Insurance
                                                                                • Equine and Livestock Insurance
                                                                                  • Royal Bank of Scotland Insurance
                                                                                    • Royal & Sun Alliance
                                                                                    • Brand Elements

                                                                                        • Key points
                                                                                          • Brand map
                                                                                              • Figure 20: Attitudes towards and usage of pet insurance brands, December 2009
                                                                                            • Brand qualities of pet insurance brands
                                                                                              • Competence crucial, but genuine care a serious issue
                                                                                                • Figure 21: Personalities of various pet insurance brands, December 2009
                                                                                              • Experience of pet insurance brands
                                                                                                • Petplan holds market leadership, but Tesco sees growth
                                                                                                  • Figure 22: Consumer usage of various pet insurance brands, December 2009
                                                                                                • Brand consideration for pet insurance brands
                                                                                                  • Petplan and Tesco most considered
                                                                                                    • Figure 23: Consideration of various pet insurance brands, December 2009
                                                                                                  • Brand satisfaction for pet insurance brands
                                                                                                    • Tesco best all-rounder
                                                                                                      • Figure 24: Satisfaction with various pet insurance brands, December 2009
                                                                                                    • Brand commitment to pet insurance brands
                                                                                                      • Tesco heading for dominance
                                                                                                        • Figure 25: Commitment to various pet insurance brands, December 2009
                                                                                                      • Brand intentions for pet insurance brands
                                                                                                        • Tesco has top loyalty
                                                                                                          • Figure 26: Future usage intentions for various pet insurance brands, December 2009
                                                                                                        • Brand recommendation for pet insurance brands
                                                                                                          • Tesco most recommended, MORE TH>N much less than
                                                                                                            • Figure 27: Recommendation of various pet insurance brands, December 2009
                                                                                                          • Tesco
                                                                                                            • What the consumer thinks
                                                                                                              • Figure 28: Attitudes towards the Tesco brand, December 2009
                                                                                                            • Halifax
                                                                                                              • What the consumer thinks
                                                                                                                • Figure 29: Attitudes towards the Halifax brand, December 2009
                                                                                                              • Direct Line
                                                                                                                • What the consumer thinks
                                                                                                                  • Figure 30: Attitudes towards the Direct Line brand, December 2009
                                                                                                                • Sainsbury’s
                                                                                                                  • What the consumer thinks
                                                                                                                    • Figure 31: Attitudes towards the Sainsbury’s brand, December 2009
                                                                                                                  • Petplan
                                                                                                                    • What the consumer thinks
                                                                                                                      • Figure 32: Attitudes towards the Petplan brand, December 2009
                                                                                                                  • Brand Communication and Promotion

                                                                                                                    • Key points
                                                                                                                      • Adspend on pet insurance increases by 67% over the last three years
                                                                                                                        • Figure 33: Topline advertising expenditure in the pet insurance market, 2006-07-2008-09
                                                                                                                      • Sainsbury’s was the top pet insurance advertiser in 2008/09
                                                                                                                        • Figure 34: Spend by company (top 20) in the pet insurance market from September 2006-August 2009
                                                                                                                      • TV and Direct Mail advertising dominates pet insurance advertising
                                                                                                                        • Figure 35: Spend by media type in the pet insurance market from September 2006-August 2009
                                                                                                                    • Channels to Market

                                                                                                                      • Key points
                                                                                                                        • Specialist providers account for 45% of all pet insurance policies
                                                                                                                          • Figure 36: Channels used to buy pet insurance, November 2009
                                                                                                                        • Aggregators are preferred channel for general insurance products
                                                                                                                          • Figure 37: Methods used to arrange main general insurance products (buildings, contents, car and annial travel cover), September 2009
                                                                                                                        • Aggregators move into pet insurance market
                                                                                                                        • The Consumer – Pet Ownership

                                                                                                                          • Key points
                                                                                                                            • Two fifths of adults live in a household with at least one pet
                                                                                                                                • Figure 38: Pets in household, November 2009
                                                                                                                              • Children are a catalyst for pet ownership
                                                                                                                                • Figure 39: Pet ownership, by gender, age, lifestage group, marital status and children in household, November 2009
                                                                                                                              • Pet insurance services for the over 65s
                                                                                                                                • Pet ownership varies by socio-economic group
                                                                                                                                  • Figure 40: Pet ownership, by socio-economic group, housheold income, working status and household tenure, November 2009
                                                                                                                                • Regional differences in pet ownership
                                                                                                                                  • Figure 41: Pet ownership by newspaper readership, internet access, internet frequency, education, region and supermarket used, November 2009
                                                                                                                                • More than a third of pet owners have more than one cat or dog
                                                                                                                                  • Figure 42: Pets ownership, by the number of dogs and cats in household, November 2009
                                                                                                                              • The Consumer – Pet Insurance Ownership and Channels Used

                                                                                                                                • Key points
                                                                                                                                  • Almost 30% of pet owners have pet insurance
                                                                                                                                      • Figure 43: Pet insurance ownership, November 2009
                                                                                                                                    • More than two fifths of dog owners have pet insurance cover
                                                                                                                                      • Figure 44: Pet insurance ownership, by most popular pets in household, November 2009
                                                                                                                                    • Pet insurance ownership increases sharply among those with more than one pet
                                                                                                                                      • Figure 45: Pet insurance ownership, by the number of dogs and cats in household, November 2009
                                                                                                                                    • Third agers are more likely to have pet insurance
                                                                                                                                      • Figure 46: Pet insurance ownership, by gender, age, lifestage, marital status and children in household, November 2009
                                                                                                                                    • Ownership is lower among less affluent pet owners
                                                                                                                                      • Figure 47: Pet insurance ownership, by socio-economic group, household income, working status and household tenure, November 2009
                                                                                                                                    • Broadsheet readers buying into pet insurance
                                                                                                                                      • Figure 48: Pet insurance ownership, by newspaper readership, internet access, intenet frequency, education, region and sumpemarket used, November 2009
                                                                                                                                    • Scope to expand pet insurance among young families
                                                                                                                                      • Figure 49: Pet owners without pet insurance, by gender, age, lifestage, marital status and children in household, November 2009
                                                                                                                                    • The rental market may offer opportunities
                                                                                                                                      • Figure 50: Pet owners without pet insurance, by socio-economic group, household income, working status and household tenure, November 2009
                                                                                                                                    • Low-cost policies should be marketed through offline channels
                                                                                                                                      • Figure 51: Pet owners without pet insurance, by newspaper readership, internet access, intenet frequency, education, region and supermarket used, November 2009
                                                                                                                                  • The Consumer – Attitudes Towards Pet Insurance and Targeting Opportunities

                                                                                                                                    • Key points
                                                                                                                                      • Almost one in three pet insurance policyholders have made a claim
                                                                                                                                          • Figure 52: Attitudes towards and statements about pet insurance, November 2009
                                                                                                                                        • Aggregator usage is likely to increase further
                                                                                                                                          • Opportunities to develop multi-pet policies
                                                                                                                                            • Figure 53: Attitudes towards and statements about pet insurance, by number of dogs and cats in households, November 2009
                                                                                                                                          • Improving awareness of policy benefits among non-policyholders
                                                                                                                                              • Figure 54: Factors most likely to persuade or have persuaded pet owners to take out pet insurance by pet insurance to cover the cost of treatment, November 2009
                                                                                                                                            • Different pets bring a different perspective
                                                                                                                                              • Figure 55: Factors most likely to persuade or have persuaded pet owners to take out pet insurance, by most popular pets in household, November 2009
                                                                                                                                            • Key demographic factors in persuading people to take out pet insurance
                                                                                                                                              • Figure 56: Key demographics relating to the factors most likely to persuade or have persuaded pet owners to take out pet insurance, November 2009
                                                                                                                                            • Lifetime cover is only really appreciated by the most engaged pet owners
                                                                                                                                              • Figure 57: Factors most likely to persuade or have persuaded pet owners to take out pet insurance, by repertoire of factors most persuaded to take pet insurance, November 2009
                                                                                                                                            • An appetite for multi-pet discounts
                                                                                                                                              • Figure 58: Factors most likely to persuade or have persuaded pet owners to take out pet insurance, by number of dogs and cats in household, November 2009
                                                                                                                                            • Target group analysis
                                                                                                                                              • Figure 59: Pet insurance target groups, November 2009
                                                                                                                                            • Pet insurance advocates
                                                                                                                                              • Cost-conscious pet owners
                                                                                                                                                • Disengaged pet owners
                                                                                                                                                • Appendix – The Consumer – Pet Ownership

                                                                                                                                                    • Figure 60: Pet owners, by gender, age, lifestage, marital status and children in household, November 2009
                                                                                                                                                    • Figure 61: Pet owners, by socio-economic group, housheold income, working status and household tenure, November 2009
                                                                                                                                                    • Figure 62: Pet owners, by newspaper readership, internet access, internet frequency, education, region and supermarket used, November 2009
                                                                                                                                                • Appendix – The Consumer – Attitudes Towards Pet Insurance and Targeting Opportunities

                                                                                                                                                    • Figure 63: Pet insurance ownership, by target groups, November 2009
                                                                                                                                                    • Figure 64: Factors most likely to persuade or have persuaded pet owners to take out pet insurance, by target groups, November 2009
                                                                                                                                                    • Figure 65: Pets in household by target groups, November 2009
                                                                                                                                                    • Figure 66: Pet insurance target groups, by demographics, November 2009

                                                                                                                                                Companies Covered

                                                                                                                                                • Animal Friends Insurance
                                                                                                                                                • Association of British Insurers
                                                                                                                                                • Aviva Plc
                                                                                                                                                • British Market Research Bureau (BMRB)
                                                                                                                                                • Capita Insurance Services
                                                                                                                                                • Co-operative Group
                                                                                                                                                • ComparetheMarket.com
                                                                                                                                                • Countryside Alliance
                                                                                                                                                • Dogs Trust
                                                                                                                                                • E&L Insurance Services
                                                                                                                                                • Financial Ombudsman Service
                                                                                                                                                • Financial Services Authority (The)
                                                                                                                                                • Government Actuary's Department (GAD)
                                                                                                                                                • HBOS plc (Halifax Bank of Scotland)
                                                                                                                                                • Home Retail Group
                                                                                                                                                • Homebase Ltd
                                                                                                                                                • InsureAndGo
                                                                                                                                                • J. Sainsbury
                                                                                                                                                • Lloyds Banking Group
                                                                                                                                                • Lloyds TSB Insurance
                                                                                                                                                • Marks & Spencer
                                                                                                                                                • NFU Mutual
                                                                                                                                                • Outdoor Advertising Association of Great Britain
                                                                                                                                                • Pet Plan Ltd. (Petplan)
                                                                                                                                                • QBE Insurance (Europe)
                                                                                                                                                • Red Sands Insurance
                                                                                                                                                • Royal Bank of Scotland Group plc
                                                                                                                                                • Royal Society for the Prevention of Cruelty to Animals (RSPCA)
                                                                                                                                                • RSA
                                                                                                                                                • Saga Services (finance)
                                                                                                                                                • Tesco Personal Finance Limited
                                                                                                                                                • The Kennel Club
                                                                                                                                                • Virgin Money
                                                                                                                                                • Waitrose
                                                                                                                                                • Zoological Society of London

                                                                                                                                                Pet Insurance - UK - January 2010

                                                                                                                                                US $2,583.33 (Excl.Tax)