Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- The market
- Pet insurance market set to keep on growing
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- Figure 1: Forecast for value of the pet insurance market, by GWP, 2008-18
- Channels to market
- Market factors
- Cost of veterinary treatment continues to increase
- Veterinary fees make up a third of all money spent on pets
- The value of vet-related pet insurance claims on the rise
- Companies, brands and innovation
- Market share
- Brand promotion
- Who’s innovating?
- The consumer
- Pet ownership
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- Figure 2: Pet ownership, July 2013
- Pet insurance ownership
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- Figure 3: Pet insurance ownership, July 2013
- Pet insurance providers
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- Figure 4: Pet insurance brand share, July 2013
- Considerations when arranging pet insurance
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- Figure 5: Considerations when arranging pet insurance, July 2013
- Reasons for not buying pet insurance
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- Figure 6: Reasons for not owning pet insurance, July 2013
- What we think
Issues in the Market
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- How can the value of having pet insurance be better communicated?
- Can anything be done to get vet-related claims costs under control?
- How can policies be made easier to understand?
- Do product preferences have an influence on buying behaviour?
Trend Application
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- Improving the pet insurance value proposition
- Disease and accident-specific pet insurance coverage
- A pet insurance brand with a personal touch
Market Drivers
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- Key points
- Dog and cat population each stand at about 8 million individually
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- Figure 7: Top pets in the UK, 2010-12
- Veterinary and other services account for a third of money spent on pets
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- Figure 8: Proportional annual household spend on pets, 2011
- £1.8 billion spent on veterinary and other services in 2011
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- Figure 9: Annual household spend on pets, 2002/03-2011
- Rising veterinary treatment costs a double-edged sword
- The value of vet-related pet insurance claims up 58% since 2007
- Higher claims costs lead to the controversial exit of big name providers
- A rise in fraudulent claims further adding to insurer costs
- Pet insurance consumer complaints up by 50%
- More can be done to make policies easier to understand
- Squeezed household incomes a hindrance to further growth
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- Figure 10: Monthly change in RPI and average weekly earnings, January 2010-June 2013
- Charities and self-insurance the main alternatives to pet insurance
SWOT Analysis
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- Figure 11: Pet insurance market SWOT analysis, 2013
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Who’s Innovating?
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- Key points
- Direct Line launches ‘Pet Step’ promotional campaign
- Confused.com creates Facebook app to promote pet insurance
- MORE TH>N expands to four levels of cover and introduces ‘Multi Pet’
- Dog’s Trust Lets with Pets scheme
Market Size and Forecast
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- Key points
- Pet insurance gross written premiums rise by just 2.6% in 2012
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- Figure 12: Value of the pet insurance market, by GWP, 2008-13
- Market forecast
- Still plenty of room for growth in new premiums
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- Figure 13: Forecast for value of the pet insurance market, by GWP, 2008-18
- Figure 14: Forecast for total value of pet insurance market, at current and constant prices, by GWP, 2008-18
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- Allianz and RSA underwrite three quarters of pet insurance policies
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- Figure 15: Pet insurance underwriter market share, based on GWP, 2012
- AXA no longer offering pet insurance to new customers
- RSA’s rapid market share growth reflects an aggressive strategy
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- Figure 16: Overview of proportional market share for pet insurance providers, 2009-12
Companies and Products
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- Agria Pet Insurance
- Company description
- Product range
- Key data
- Allianz Insurance Plc
- Company description
- Product range
- Key data
- Marketing and promotion
- AXA Insurance
- Company description
- Product range
- Key data
- Direct Line Group
- Company description
- Product range
- Key data
- Marketing and promotion
- Equine and Livestock Insurance
- Company description
- Product range
- Key data
- Royal & Sun Alliance
- Company description
- Product range
- Key data
- Marketing and promotion
Brand Communication and Promotion
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- Key points
- £10.1 million spent advertising pet insurance in the year to May 2013
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- Figure 17: Topline advertising expenditure in the pet insurance market, 2009/10-2012/13*
- Tesco Bank the leading advertiser of pet insurance
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- Figure 18: Top 20 advertisers of pet insurance, 2010/11-2012/13
- More than half of advertising budgets used on TV ad campaigns
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- Figure 19: Pet insurance adspend, by media type, 2010/11-2012/13
- A note about adspend
Channels to Market
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- Key points
- Large majority of policies being arranged online
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- Figure 20: How pet insurance policy was arranged, July 2013
Pet Ownership
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- Key points
- Three fifths of internet users have a pet in the household
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- Figure 21: Pet ownership, July 2013
- Most pet owners have just one pet
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- Figure 22: Repertoire of pet ownership, July 2013
- Figure 23: Repertoire of pet ownership, by type of pet, July 2013
- Pet ownership is a family affair
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- Figure 24: Pet ownership, by marital status, presence of own children and household size, July 2013
- Pet ownership trends vary by region and housing tenure
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- Figure 25: Pet ownership, by region and housing situation, July 2013
Pet Insurance Ownership
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- Key points
- More than half of the pet population is uninsured
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- Figure 26: Pet insurance ownership, by type of pet, July 2013
- Over-45s are less likely than average to own pet insurance
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- Figure 27: Pet insurance ownership, by gender, age and presence of own children, July 2013
- Pet insurance ownership is strongly linked to affluence
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- Figure 28: Pet insurance ownership, by socio-economic group, gross annual household income and financial situation, July 2013
Pet Insurance Providers
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- Key points
- Specialist and mainstream providers are neck and neck
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- Figure 29: Pet insurance brand share, July 2013
- One in five hold a policy with Petplan, the overall market leader
- Dog owners tend to lean towards mainstream brands
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- Figure 30: Pet insurance brand share, by pet insurance ownership, July 2013
- Mainstream providers are upgrading to better compete with specialists
- Mainstream and specialist insurers active on price comparison sites
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- Figure 31: Pet insurance brand share, by how pet insurance policy was arranged, July 2013
- Retail brands mostly relying on direct sales
Considerations when Arranging Pet Insurance
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- Key points
- Pet owners are after quality at the best possible price
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- Figure 32: Considerations when arranging pet insurance, July 2013
- Those seeking comprehensive or lifetime cover are going to specialists
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- Figure 33: Type of pet insurance provider, by considerations when arranging pet insurance, July 2013
- Competing with the strong brand image of specialist providers
- Considerations can influence what channel is being used for purchase
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- Figure 34: How pet insurance policy was arranged, by considerations when arranging pet insurance, July 2013
Reasons for Not Buying Pet Insurance
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- Key points
- Three in ten think pet insurance does not offer value for money
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- Figure 35: Reasons for not owning pet insurance, July 2013
- Making the pet insurance value proposition more apparent
- One in five distrust insurers will honour claims
- More consistency can help improve the industry’s image
- Providers that underwrite their own policies have an upper hand
- Reasons for not owning differ slightly between cat and dog owners
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- Figure 36: Reasons for not owning pet insurance, by type of pet, July 2013
Appendix – Market Size and Forecast
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- Figure 37: Best- and worst-case forecast for total value of the pet insurance market, by GWP, 2013-18
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Appendix – Pet Ownership
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- Figure 38: Pet ownership, by demographics, July 2013
- Figure 39: Repertoire of number of pets owned, by demographics, July 2013
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Appendix – Pet Insurance Ownership
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- Figure 40: Any pet insurance ownership, by demographics, July 2013
- Figure 41: Pet insurance ownership – Dog(s), by demographics, July 2013
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- Figure 42: Pet insurance ownership – Cat(s), by demographics, July 2013
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Appendix – Pet Insurance Providers
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- Figure 43: Most popular pet insurance brand share, by demographics, July 2013
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Appendix – Considerations when Arranging Pet Insurance
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- Figure 44: Considerations when arranging pet insurance, by pet insurance ownership, July 2013
- Figure 45: Considerations when arranging pet insurance, by demographics, July 2013
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- Figure 46: Considerations when arranging pet insurance, by demographics, July 2013 (continued)
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Appendix – Reasons for Not Buying Pet Insurance
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- Figure 47: Reasons for not owning pet insurance, by demographics, July 2013
- Figure 48: Reasons for not owning pet insurance, by demographics, July 2013 (continued)
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