Rising Vetnary Cost a Challenge for PET Insurers in the UK: Ken Research


In 2016, it was estimated that around 40% of the households in UK have pets and the total pet population stands at around 57 million of which the dog population is 8.5 million and cat population is 7.5 million. Now-a-days, more and more pet owners are opting for insurance. This is mainly due to increase in vet bills. Pet insurance is designed to cover medical expenses if the insured pet falls ill or is injured in an accident. Most products cater for cats and dogs, although there are policies available for rabbits, horses/ponies and more exotic pets also. The pet insurance market is currently experiencing strong growth as there is huge untapped market potential but at the same time it is also facing difficulties due to medical inflation and accelerating premiums.

UK has nearly as many pets as people so unexpected visits to the vet is very common. In fact, the veterinary costs are almost one third of the total household spending on pets. This is also accompanied by advances in veterinary care which in turn increase the cost of treatments. Due to this, more number of pet owners is taking insurance. Also, improved awareness amongst people about the benefits of insurance has further assisted the growth of this market. According to a report announced by Ken Research titled “UK Pet Insurance: Market Dynamics and Opportunities 2016”, there has been a rise in the product penetration with an increase in the number of policy subscribers. The dog insurance market is three times the size of the cat market and about one third of cats and half of dogs are insured. Still around 56% of the pet owners are uninsured creating huge market potential for new and existing player.

The market also faces certain challenges. Medical inflation and increase in veterinary costs have made it difficult for the insurers to maintain a margin due to increase in the cost of claims. This increased pressure on the insurers is being passed on to the pet owners in terms of higher premiums. It has also raised questions on the quality of insurance provided. Some pet owners also find the different levels of cover confusing.

Despite the challenges, the pet insurers have well-established distribution networks. Though many pet owners prefer to get in touch with the insurer directly but there are a significant number of people who value convenience, are seeking alternative channels to obtain their policies. Moreover, the retail providers are the second most popular channel of distribution for pet insurance. This can be attributed to increase spending in marketing and advertising. The insurers are trying to boost product take up by making their product available on different propositions and price comparison sites. Use of online platforms to spread awareness and better reach their target segment has helped them in making their products easily available and offer simple online purchasing solutions.  Due to the growth of online media, there has been an increase in the number of small players leading to increased competition. Although it has been observed that pet insurance are not well served on price comparison sites as it is not seen by the customers as a commodity. Due to this reason, major players are still refraining from using these price comparison sites as a means of product distribution.

Pet insurance appears as an attractive market with lot of opportunities but they also struggle in terms of increasing premiums and complexity of their products. Hence, the insurers need to focus on providing simpler and more attractive packages which also ensures quality at a reasonable price. They need to educate the customers about the different cover levels and maintain transparency in terms of pricing and terms and conditions of the policy. They need to provide value to the customers. This will help the customer in making an informed decision which will definitely lead to better satisfaction. Also, the insurers need to work closely with the vet practices to have better control of costs. If taken care of, the above mentioned points can help new entrants and existing players benefit for a long period of time. Some of the players in the pet insurance market are Tesco Bank, M&S Bank, Aviva, Pinnacle, Pet Plan, John Lewis Finance Pet Insurance, Sainsbury’s Bank etc.

Key Topics Covered in the Report:

Non-Life Insurance Industry Denmark

UK Insurance Sector Outlook

UK Non- Life Insurance Market Research

Non-Life Insurance Sector Trends UK

UK General Insurance Regulations

UK Pet Insurance Market Size

UK Pet Insurance Market Research

UK Pet Insurance Sector

UK Pet Insurance Industry

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Ankur Gupta, Head Marketing & Communications




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