Pet Insurance - UK - August 2019

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Pet insurance market stalls in 2018…
Figure 1: Value of pet insurance gross written premiums, 2014-19
… but is forecast to reach £1.6 billion by 2024
Figure 2: Forecast of pet insurance gross written premiums, 2014-24
Ownership of multi-pet policies increases in 2018
Pet ownership is becoming increasingly expensive
Figure 3: Average UK weekly household expenditure on pets, by component, 2014-18
Claims ratio rises in 2018
Figure 4: Gross claims incurred and claims ratio, 2013-18
Companies and brands
Allianz continues to dominate the market
Figure 5: Estimated Market Share of pet insurance by GWP, 2018
New technology is improving the claims process
Petplan and MORETH>N drive advertising expenditure to its highest level for five years
Figure 6: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, 2014/15-2018/19
The consumer
60% of people own a pet
Figure 7: Ownership of pets, May 2019
77% own high-level or mid-level cover
Figure 8: Type of policy held, May 2019
Accident and injury cover most appeals to pet insurance holders
Figure 9: Interest in basic accident and injury cover, by pet insurance ownership, May 2019
Price comparison sites are the preferred source of information
Figure 10: Most influential sources used when choosing most recent pet insurance policy, May 2019
Discounts and rewards can play a major role
Figure 11: Interest in pet insurance features and incentives, May 2019
Pet health plans of most interest to the insured
Figure 12: Interest in pet health plan features, May 2019
What we think
ISSUES AND INSIGHTS
New technology will encourage younger pet owners to take out cover
The facts
The implications
Bespoke policies and benefits for multi-pet owners can help boost sales
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Pet insurance market stalls in 2018…
…but is forecast to reach £1.6 billion by 2024
Ownership of multi-pet policies increases in 2018
Pet ownership is becoming increasingly expensive
Claims ratio rises in 2018
MARKET SIZE AND FORECAST
Little growth in pet insurance premiums in 2018
Figure 13: Value of pet insurance gross written premiums, 2014-19
More pets are insured despite a fall in the number of subscribers
Figure 14: Size of the pet insurance market, by exposure, subscribers and gross written premiums, 2014-18
Pet insurance premiums forecast to reach £1.6 billion by 2024
Figure 15: Forecast of pet insurance gross written premiums, 2014-24
Figure 16: Forecast of pet insurance gross written premiums, at current and constant prices, 2014-24
Forecast methodology
MARKET SEGMENTATION
Number of subscribers falls across the market
Figure 17: Number of pet insurance policy subscribers, by type of pet, 2014-18
More pet owners are holding multi-pet policies
Figure 18: Exposure* and exposure to subscriber ratio**, 2014-18
Dog policy premiums fall…
Figure 19: Pet insurance gross written premiums, by type of pet, 2014-18
…as well as the average premium paid
Figure 20: Average pet insurance premium (based on exposure), by type of pet, 2014-18
MARKET DRIVERS
Household expenditure on pets continues to rise
Figure 21: Average UK weekly household expenditure on pets, by component, 2014-18
Average claim value increases while the number of claims fall
Figure 22: Number of claims notified and average claim value, 2013-18
Claims ratio rises in 2018
Figure 23: Gross written premiums, claims incurred and claims ratio, 2013-18
Pet insurance complaints reach an all-time high
Figure 24: Number of pet insurance complaint enquiries, new cases and the percentage of cases upheld, 2015/15-2017/18
FCA proposes greater transparency on claims data and complaints process
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Allianz continues to dominate the market
New technology is improving the claims process
Petplan and MORETH>N drive advertising expenditure to its highest level for five years
MARKET SHARE
Allianz remains the major player in the market…
…while RSA, Animal Friends and Direct Line together account for over 30% of the pet market
Figure 25: Estimated market share of pet insurance by GWP, 2018
COMPETITIVE STRATEGIES AND INNOVATION
Significant developments in online claim solutions…
From major players
And new challengers
…as well as online veterinary consultations
New telehealth services enter the market
While pet health app Joii is hoping to shake up the pet health market
Developments in pet activity trackers
Through fitness trackers
And new collaborations
New technology can help treat pre-existing conditions
ADVERTISING AND MARKETING ACTIVITY
Advertising expenditure at its highest level for five years…
Figure 26: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, 2014/15-2018/19
…driven by Petplan and MORETH>N
Figure 27: Top 10 pet insurance advertisers using above-the-line, online display and direct mail channels, 2016/17-2018/19
TV expenditure accounts for the vast majority of advertising expenditure
Figure 28: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, by media type, 2018/19
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
60% of people own a pet
77% own high-level or mid-level cover
Accident and injury cover most appeals to pet insurance holders
PCWS are top source of information
Discounts and rewards can play a major role
Pet health plans of most interest to the insured
PET OWNERSHIP
Dog ownership is rising
Figure 29: Ownership of pets, May 2019
Multi-cat owners are more common
Figure 30: Number of dogs or cats owned, May 2019
PET INSURANCE PENETRATION
Over 40% say they have pet insurance
Figure 31: Penetration of pet insurance, by type of pet, May 2019
Over 55% of multi-cat owners do not own insurance
Figure 32: Penetration of pet insurance among multi-pet owners, May 2019
LEVEL OF COVER HELD
Ownership of high-level and mid-level cover is equally split
Figure 33: Type of policy held, May 2019
Multi-pet owners need flexible options
Figure 34: Type of policy held, by repertoire of number of different types of pets insurance is owned for, May 2019
INTEREST IN ACCIDENT AND INJURY COVER
Accident and Injury cover most appeals to pet insurance holders
Figure 35: Interest in basic accident and injury cover, by pet insurance ownership, May 2019
Millennials and owners of younger pets are most interested
Figure 36: Interest in basic accident and injury cover, by pet life stage, May 2019
INFLUENTIAL SOURCES WHEN CHOOSING A PET INSURANCE 
PCWs are the most influential source
Vets play a limited role in influencing choice of insurer
Figure 37: Most influential sources used when choosing most recent pet insurance policy, May 2019
Social media channels more likely to influence those with high-level cover
Figure 38: Most influential sources used when choosing most recent pet insurance policy, by level of cover held, May 2019
INTEREST IN PET INSURANCE FEATURES AND INCENTIVES
Discounts on pet medication hold wide appeal
Millennials are most likely to find pet fitness trackers appealing…
Figure 39: Interest in Pet Insurance Features and Incentives, May 2019
…and those interested in accident and injury cover
Figure 40: Interest in Pet Insurance Features and Incentives, by interest in basic accident and injury cover, May 2019
Rewards and discounts are most appealing to older pet owners with cover
Figure 41: Pet Insurance – CHAID – Tree output, May 2019
Discounts on pet medication and 24/7 online pet consultations appeal to multi-pet owners
Figure 42: Interest in pet insurance features and incentives, by single pet and multi-pet owners, May 2019
INTEREST IN PET HEALTH PLAN FEATURES
Pet health plans are of most interest to those with pet insurance
Significant interest in emergency pet health services
Figure 43: Interest in pet health plan features, May 2019
Opportunity for providers to build pet specific plans
Figure 44: Interest in pet health plan features, by pet life stage, May 2019
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Product definitions
Abbreviations
Consumer research methodology
CHAID analysis methodology
Figure 45: Pet Insurance – CHAID – Table output, May 2019
APPENDIX – MARKET SIZE AND FORECAST
Figure 46: Forecast of the value of pet insurance gross written premiums, 2019-14
Forecast methodology