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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 and how fast are its rates of growth? 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. 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 (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 – 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 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.

Expert analysis from a specialist in the field

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

The fall in subscriber growth in 2016 shows there are challenges to overcome in pet insurance. However, most pet owners don’t have insurance, so there are plenty of opportunities to expand the market. As long as premiums can be kept at a reasonable level, and the benefits of policies are effectively marketed, pet owners’ fondness for their animals will mean pet insurance continues to grow into the future. Richard Shepherd
Senior 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 topped £1 billion in 2016 and is forecast for further growth
              • Figure 1: Forecast of pet insurance gross written premiums – Fan chart, 2012-22
            • Sharp rise in average premiums counteracts slow subscriber growth
              • Figure 2: Average pet insurance premium (based on exposure), by type of pet, 2012-16
            • The average pet claim is over £750
              • Figure 3: Value of gross pet insurance claims incurred and average pet insurance claims, 2013-16
            • Companies and brands
              • Petplan is the UK’s largest pet insurer
                • Figure 4: Pet insurance providers currently used by consumers, May 2017
                • Figure 5: Type of pet insurance provider used by consumers, May 2017
              • Subscriptions and monitoring kits open new opportunities
                • Above-the-line advertising spend increased to £6.7 million in 2016/17
                  • Figure 6: Total above-the line, online display and direct mail advertising expenditure on pet insurance, 2012/13-2016/17
                • The consumer
                  • Half of households have a cat or dog
                    • Figure 7: Ownership of pets, May 2017
                  • Growth of pet insurance penetration has stalled
                    • Figure 8: Pet insurance ownership, 2014-17
                  • 72% of policyholders have a lifetime policy
                    • Figure 9: Type of pet insurance policy held, May 2017
                  • Pet policyholders look for value, not just the cheapest option
                    • Figure 10: Factors considered when choosing a pet insurance policy, May 2017
                  • Policyholders are generally confident that their insurance is sufficient
                    • Figure 11: Attitudes towards pet insurance, May 2017
                  • What we think
                  • Issues and Insights

                    • Growth in pet insurance has slipped
                      • The facts
                        • The implications
                          • Price will come under greater scrutiny as household finances are squeezed
                            • The facts
                              • The implications
                                • Monitoring kits set for growth
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • GWP topped £1 billion in 2016 and is forecast for further growth
                                        • Sharp rise in average premiums counteracted slow subscriber growth
                                          • There are over 16 million cats and dogs in the UK
                                            • The average pet claim is over £750
                                            • Market Size and Forecast

                                              • Pet insurance was valued at over £1 billion for the first time in 2016
                                                • Policyholders face pressure from rising average premiums and inflation
                                                  • Figure 12: Size of the pet insurance market, by gross written premiums, 2013-17
                                                  • Figure 13: Size of the pet insurance market, by exposure years, number of subscribers and gross written premiums, 2012-16
                                                • Premiums forecast for further growth
                                                  • Figure 14: Forecast of pet insurance gross written premiums – Fan chart, 2012-22
                                                  • Figure 15: Forecast of pet insurance gross written premiums, at current and constant prices, 2012-22
                                                • Forecast methodology
                                                • Market Segmentation

                                                  • Growth in the number of subscribers fell in 2016
                                                    • Figure 16: Number of pet insurance policy subscribers, by type of pet, 2012-16
                                                  • Multi-pet policies have fallen in popularity
                                                    • Figure 17: Exposure to subscriber ratio, by type of pet (cat and dog only), 2012-16
                                                  • Dog policies account for three quarters of pet insurance GWP
                                                    • Figure 18: Pet insurance gross written premiums, by type of pet, 2012-16
                                                  • Sharp rise in premiums
                                                    • Figure 19: Average pet insurance premium (based on exposure), by type of pet, 2012-16
                                                • Market Drivers

                                                  • There are over 16 million cats and dogs in the UK
                                                    • Figure 20: Size of UK pet population, 2016/17
                                                  • Spending on pets is increasing
                                                    • Figure 21: Average weekly household spending on pets – UK, by category, 2013-16
                                                  • The average pet claim is over £750
                                                    • Figure 22: Value and volume of pet insurance claims incurred, claims ratio and average claim value, 2012-16
                                                  • Tax rises put further pressure on premiums
                                                  • Companies and Brands – What You Need to Know

                                                    • Petplan is the UK’s largest pet insurer
                                                      • Subscriptions and monitoring kits open new opportunities
                                                        • Above-the-line advertising spend increased to £6.7 million in 2016/17
                                                        • Pet Insurance Providers

                                                          • Petplan is the UK’s largest pet insurer
                                                            • Figure 23: Pet insurance provider, May 2017
                                                          • Consumers prefer to use pet specialists
                                                            • Figure 24: Type of pet insurer, May 2017
                                                          • A congested market
                                                          • Competitive Strategies

                                                            • MORE TH>N’s DOGGYSSENTI>LS brings insurance and pet care together
                                                              • Monitoring kits to hit the mainstream
                                                                • Price is key but brand retains a huge influence
                                                                  • Lower value policies could be set for growth
                                                                    • Bought By Many enters the market with cover for pre-existing conditions
                                                                      • John Lewis chooses not to apply penalty fee for vet referrals
                                                                      • Advertising and Marketing Activity

                                                                        • Above-the-line advertising expenditure increased in the last year
                                                                          • Figure 25: Total above-the line, online display and direct mail advertising expenditure on pet insurance, 2012/13-2016/17
                                                                        • Petplan accounts for almost half of adspend
                                                                          • Figure 26: Top 10 pet insurance advertisers using above-the-line, online display and direct mail channels, 2016/17
                                                                        • TV is the dominant advertising channel
                                                                          • Figure 27: Total above-the line, online display and direct mail advertising expenditure on pet insurance, by media type, 2016/17
                                                                        • Nielsen Ad Intel coverage
                                                                        • The Consumer – What You Need to Know

                                                                          • Half of households have a cat or dog
                                                                            • Growth of pet insurance penetration has stalled
                                                                              • 72% of policyholders have a lifetime policy
                                                                                • Pet policyholders look for value, not just the cheapest option
                                                                                  • Policyholders are generally confident that their insurance is sufficient
                                                                                  • Pet Ownership

                                                                                    • Half of households have a cat or dog
                                                                                      • Figure 28: Ownership of pets, May 2017
                                                                                    • Families are more likely to have pets
                                                                                      • Figure 29: Ownership of pets, by whether respondent has children aged under-18, May 2017
                                                                                  • Penetration of Pet Insurance

                                                                                    • Growth of pet insurance penetration has stalled
                                                                                      • Figure 30: Pet insurance ownership, 2014-17
                                                                                    • Dog owners are most likely to have insurance
                                                                                      • Figure 31: Penetration of pet insurance, by type of pet, May 2017
                                                                                    • Cost is a major barrier to ownership
                                                                                      • Figure 32: Penetration of cat and dog insurance, by annual household income, May 2017
                                                                                  • Level of Cover Held

                                                                                    • Mid-level cover is the most popular policy type
                                                                                      • Figure 33: Type of pet policy held, May 2017
                                                                                    • Low-cover policies are unpopular
                                                                                      • Retailers are used for cheaper cover
                                                                                        • Figure 34: Type of policy held, by type of pet insurance provider, May 2017
                                                                                    • Important Factors in Choosing a Policy

                                                                                      • Value is key
                                                                                        • Figure 35: Factors considered when choosing a pet insurance policy, May 2017
                                                                                      • Prior relationships with providers have limited influence
                                                                                        • …but general insurance customers are more open to cross-selling
                                                                                          • Figure 36: Choice of “Previous experience of using the provider for another type of insurance”, by type of pet insurer, May 2017
                                                                                        • Choice of vet is important to high-level policyholders
                                                                                          • Figure 37: Choice of “Being able to choose which vet to use for treatment”, by type of pet policy held, May 2017
                                                                                      • Attitudes towards Pet Insurance

                                                                                        • Policyholders are generally confident that their insurance is sufficient
                                                                                          • Figure 38: Attitudes towards pet insurance, May 2017
                                                                                        • Pet experts hold authority over other insurers
                                                                                          • Monitoring kits appeal to younger pet owners and those with high-level cover
                                                                                            • Figure 39: Response to the statement “I would like to use an activity monitoring kit to help track my pet’s level of exercise (eg a step counter)”, by age, May 2017
                                                                                          • Most would pay more for higher cover, including pre-existing conditions
                                                                                            • Figure 40: Response to the statement “I would be willing to pay more to switch to a provider that offers cover for pre-existing conditions”, by type of pet policy held, May 2016
                                                                                        • Appendix – Distributor/Underwriter Relationships

                                                                                            • Figure 41: Selected providers of pet insurance and their underwriting partners, July 2017
                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                  • Figure 42: Forecast of value of gross written pet insurance premiums, 2017-22
                                                                                                • Forecast methodology