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UK Pet Insurance market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Pet Insurance market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

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. Most products cater for cats and dogs, although there are policies available for horses and ponies, rabbits, fish 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 (i.e. the premiums keep being paid). As a result, lifetime policies are often the most expensive option. Moreover, premiums rise with the age of the pet, and as a result of any claims made.
  • Mid-level/‘per condition no time limit’ policies cover 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 required 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.

In the case of dogs, third-party liability will be included in the majority of policies in all three types of cover mentioned above. Under the law, cat owners are not legally accountable for their cat’s actions.

Insurance policies will not normally cover periodic visits to the vet or events that could have been anticipated, such as routine vaccinations and neutering. However, an increasing number of providers are offering health cash plans, which offer to spread the cost of preventative care with monthly payments covering regular treatments and consultations at discounted prices. These products are offered in addition rather than as an alternative for insurance, but are closely linked as failure to keep up to date with routine jabs and treatments, or claiming for a condition that could have been prevented by them, could invalidate insurance.

What you need to know

The market for pet insurance has shown continuous expansion over the last decade, and despite slower growth in 2016, the sector surged ahead again in 2017. Gross written premiums grew by 14% to reach £1.2 billion, while the number of subscribers rose by 11% to 3.6 million.

55% of pet owners say they have pet insurance, rising to 66% of dog owners. Penetration of policies has been increasing in recent years, despite average premiums being the highest on record. In part, this is down to the rising cost of veterinary treatments, driving consumers to choose insurance to protect themselves from unexpected costs.

This Report examines the UK pet insurance market, including an assessment of the size of the sector and a forecast for the next five years, the main market drivers and developments and innovations in competitive strategies. Mintel’s exclusive consumer research looks at the proportion of consumers who have pets, and the penetration of pet insurance among pet owners. The research also covers the type of cover held, the insurer used and the switching activity. General attitudes and behaviours towards pet insurance are explored, including reasons for not having pet insurance.

Expert analysis from a specialist in the field

Written by Irene Salazar, a leading analyst in the Financial Services sector, her extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The pet insurance market is enjoying another positive year, with growth projected to continue in the medium term. Pet owners are keen to ensure they have enough cover to take care of their animals, while the rising cost of vet bills makes insurance increasingly attractive. Innovative insurers have an opportunity to strengthen and redefine their relationship with owners, going well beyond what is expected of them to become active in every aspect of pet ownership. Irene Salazar
Financial Services Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • GWP increased by 14% in 2017, reaching £1.2 billion and set for further growth
              • Figure 1: Forecast of pet insurance gross written premiums – Fan chart, 2013-23
            • Dog and cat policies’ premiums continue to rise
              • Figure 2: Average pet insurance premium (based on exposure), by type of pet, 2013-17
            • UK pet population continues to grow
              • Gross written premiums growing faster than claims incurred
                • Figure 3: Gross claims incurred, written premiums and claims ratio, 2013-17
              • Average pet claim unchanged but remains at its highest
                • Figure 4: Number of claims notified and average claim value, 2013-17
              • Companies and brands
                • Petplan remains the largest pet insurer in the UK
                  • Figure 5: Pet insurance provider, May 2018
                • Market developments pointed at increasing convenience
                  • Above-the-line advertising: Animal Friends accounts for 40%
                    • Figure 6: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, 2013/14-2017/18
                  • TV is the dominant advertising channel, but radio bounces back
                    • Figure 7: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, by media type, 2017/18
                  • The consumer
                    • 55% of pet owners have pet insurance
                      • Figure 8: Penetration of pet insurance, by type of pet, May 2018
                    • 70% of policyholders have lifetime cover
                      • Figure 9: Type of pet policy held, May 2018
                    • 18% of policyholders have switched provider in the last 12 months
                      • Figure 10: Pet insurance switching activity, May 2018
                    • Personalisation in payment options could prove popular
                      • Figure 11: Attitudes towards pet insurance, May 2018
                    • Value is the biggest reason not to buy insurance
                      • Figure 12: Reasons for not having pet insurance, May 2018
                    • What we think
                    • Issues and Insights

                      • Realising the market’s full potential: beware of the dog
                        • The facts
                          • The implications
                            • From expanding to enhancing
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • GWP reach £1.2 billion, a growth of 14% in 2017
                                    • Dog and cat policies’ premiums continue to rise
                                      • Dog and cat populations rise, while spending on pets continues to grow
                                        • Gross written premiums growing faster than claims incurred
                                        • Market Size and Forecast

                                          • Pet insurance premiums grew to £1.2 billion in 2017…
                                            • Figure 13: Value of pet insurance gross written premiums, 2013-18
                                          • …driven by an 11% increase in the number of subscribers
                                            • Figure 14: Size of the pet insurance market, by exposure, subscribers and gross written premiums, 2013-17
                                          • Pet insurance premiums forecast to continue showing strong growth
                                            • Figure 15: Forecast of pet insurance gross written premiums – Fan chart, 2013-23
                                            • Figure 16: Forecast of pet insurance gross written premiums, at current and constant prices, 2013-23
                                          • Forecast methodology
                                          • Market Segmentation

                                            • The number of policyholders returned to double-digit growth in 2017
                                              • Figure 17: Number of pet insurance policy subscribers, by type of pet, 2013-17
                                            • Exposure growing more slowly than number of subscribers
                                              • Figure 18: Exposure* and exposure to subscriber ratios**, 2013-17
                                            • Dog policies account for 76% of pet insurance GWP
                                              • Figure 19: Pet insurance gross written premiums, by type of pet, 2013-17
                                            • Dog and cat policies’ premiums continue to rise
                                              • Figure 20: Average pet insurance premium (based on exposure), by type of pet, 2013-17
                                          • Market Drivers

                                            • Dog and cat population continues to grow
                                              • Figure 21: Size of UK pet population, average of 2017 and 2018
                                            • Households with children more likely to have pets
                                              • Figure 22: Proportion of households with children that have pets, 2017 and 2018
                                            • Households now spend £5.40 per week on pets
                                              • Figure 23: Average UK weekly household expenditure on pets, by component, 2013-17
                                            • Gross written premiums growing faster than claims incurred
                                              • Figure 24: Gross claims incurred, written premiums and claims ratio, 2013-17
                                            • Average pet claim unchanged but remains at its highest
                                              • Figure 25: Number of claims notified and average claim value, 2013-17
                                          • Companies and Brands – What You Need to Know

                                            • Petplan remains the largest pet insurer in the UK
                                              • Market developments pointed at increasing convenience
                                                • Above-the-line advertising: Animal Friends accounts for 40%
                                                • Pet Insurance Providers

                                                  • Petplan remains the largest pet insurer in the UK
                                                    • Figure 26: Pet insurance provider, May 2018
                                                  • Pet specialists’ appeal is clear
                                                    • Figure 27: Type of pet insurance provider, May 2018
                                                  • Retailers could be shaking things up
                                                    • Opportunities for insurers and charities to work together
                                                    • Competitive Strategies

                                                      • Bought By Many introduces Snap Claims tool for a speedy claims process
                                                        • Figure 28: Bought By Many’s Snap Claims Tool
                                                      • 24/7 vet nurse chat as a valuable extra for policyholders
                                                        • Figure 29: PawSquad 24/7 advice line via chat and video chat
                                                      • Direct Line and Pet Drugs Online launch new medicine delivery service
                                                        • Pets at Home phases down its insurance products, directing new customers to Petplan
                                                          • Homebase stops offering pet insurance
                                                            • Compare Cover adds pet insurance to its site
                                                              • Health subscription box Protect My Pet to partner with insurance providers
                                                                • Figure 30: Protect My Pet Plus Health subscription box
                                                              • Pet insurance as an increasingly attractive employee benefit
                                                                • Opportunities for insurance to cover travelling pets in times of uncertainty
                                                                • Product Case Study: Pet Health Cash Plans

                                                                  • What are they?
                                                                    • Advantages
                                                                      • Prospects for expansion
                                                                        • Health Cash Plans and Insurance
                                                                          • Connection with insurers
                                                                            • Examples
                                                                            • Advertising and Marketing Activity

                                                                              • Above-the-line advertising expenditure decreased in the last year
                                                                                • Figure 31: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, 2013/14-2017/18
                                                                              • Animal Friends accounts for 40% of adspend
                                                                                • Figure 32: Top 10 pet insurance advertisers using above-the-line, online display and direct mail channels, 2015/16-2017/18
                                                                              • TV is the dominant advertising channel
                                                                                • Figure 33: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, by media type, 2017/18
                                                                              • Sponsorships and partnerships
                                                                                • Cashback sites
                                                                                  • Nielsen Ad Intel coverage
                                                                                  • The Consumer – What You Need to Know

                                                                                    • 55% of pet owners have pet insurance
                                                                                      • 70% of policyholders have lifetime cover
                                                                                        • 18% of policyholders have switched provider in the last 12 months
                                                                                          • Personalisation in payment options could prove popular
                                                                                            • Value is the biggest reason not to buy insurance
                                                                                            • Penetration of Pet Insurance

                                                                                              • Pet ownership continues to increase
                                                                                                • Figure 34: Ownership of pets, May 2018
                                                                                              • 55% of pet owners have at least one of their animals insured
                                                                                                • Figure 35: Penetration of pet insurance, by type of pet, May 2018
                                                                                              • Millennials are significantly more likely to buy insurance
                                                                                                • Figure 36: Penetration of pet insurance, by generation, May 2018
                                                                                            • Level of Cover Held

                                                                                              • 70% of policyholders have lifetime cover
                                                                                                • Figure 37: Type of pet policy held, May 2018
                                                                                              • Pet specialists preferred for higher-cover policies and retailers for cheaper alternatives
                                                                                                • Figure 38: Type of policy held, by type of pet insurance provider, May 2018
                                                                                              • Accident-only and third-party liability covers could find a niche in the sharing economy
                                                                                              • Switching Activity

                                                                                                • 18% of policyholders have switched provider in the last 12 months
                                                                                                  • Figure 39: Pet insurance switching activity, May 2018
                                                                                                • Policyholders more likely to be loyal to pet specialists
                                                                                                  • Figure 40: Switching activity, by type of pet insurance provider, May 2018
                                                                                                • Price comparison sites have a role to play
                                                                                                • Attitudes towards Pet Insurance

                                                                                                  • Owners are confident that they understand what their policy covers
                                                                                                    • Figure 41: Attitudes towards pet insurance, May 2018
                                                                                                  • Personalisation in payment options could prove popular
                                                                                                    • Health-monitoring kits have huge potential but providers need to integrate them into fairer pricing
                                                                                                      • Figure 42: Link AKC smart collar and app
                                                                                                    • Increasing costs as pets get older are an opportunity to reassure owners
                                                                                                      • Age of owner related to concerns over age of pet
                                                                                                        • Figure 43: Agreement with the statement “I am concerned about the cost of pet insurance increasing as my pet ages” – CHAID – Tree output, May 2018
                                                                                                    • Reasons for Not Having Pet Insurance

                                                                                                      • Value is the biggest reason not to buy insurance
                                                                                                          • Figure 44: Reasons for not having pet insurance, May 2018
                                                                                                        • Uninsured owners tend to have one main reason for not buying a policy
                                                                                                          • Figure 45: Reasons for not having pet insurance, by number of reasons given, May 2018
                                                                                                      • Appendix – Distributor/Underwriter Relationships

                                                                                                          • Figure 46: Selected providers of pet insurance and their underwriting partners, August 2018
                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                          • Abbreviations
                                                                                                            • Consumer research methodology
                                                                                                            • Appendix – Market Size and Forecast

                                                                                                                • Figure 47: Forecast of value of gross written pet insurance premiums, 2018-23
                                                                                                              • Forecast methodology