Table of Contents
Executive Summary
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- Impact of COVID-19 on pet insurance
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- Figure 1: Expected impact of COVID-19 on pet insurance, short, medium and long term, [17 July 2020]
- The market
- Pet insurance market contracts for the first time in 2019
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- Figure 2: Forecast of pet insurance gross written premiums, 2015-25
- Number of subscribers falls for second year in a row
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- Figure 3: Number of pet insurance policy subscribers, by type of pet, 2015-19
- Average claim value reaches new high
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- Figure 4: Number of claims notified and average claim value, 2013-19
- Companies and brands
- Allianz cements its position in the market …
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- Figure 5: Estimated market share of pet insurance, by GWP, 2019
- Aviva partners with Animal Friends
- Bought By Many continues to disrupt and expand
- Consumers likely to take more notice of 24/7 video consultations post-COVID-19
- Advertising expenditure falls
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- Figure 6: Total above-the-line, online display and direct mail advertising expenditure on pet insurance products, 2015/16-2019/20
- Petplan enjoys highest levels of awareness among pet specialists
- Key brand metrics
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- Figure 7: Key metrics for selected brands, June 2020
- The consumer
- 54% of people own a pet
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- Figure 8: ownership of pets, May 2020
- 47% of pet owners have insurance
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- Figure 9: Pet insurance penetration, by type of pet owned, May 2020
- Mid-level policies are the most common
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- Figure 10: Level of cover held, May 2020
- Quality is the most important purchase driver
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- Figure 11: Purchase drivers of pet insurance, May 2020
- Retailers could have an advantage during a difficult economic climate
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- Figure 12: Correspondence analysis of pet insurance providers, May 2020
- Majority of policyholders find the purchase and research journey easy
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- Figure 13: Perceptions of pet insurance research and purchase journey, May 2020
- Most policyholders found it easy to arrange cover
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- Figure 14: Overall simplicity of pet insurance research and purchase journey, May 2020
- Despite COVID-19, people are not looking to cancel
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- Figure 15: Pet insurance intentions, May 2020
- What we think
Impact of COVID-19 on Pet Insurance
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- How COVID-19 will reshape the market
- Pet insurance remains a discretionary product
- COVID-19 arrived at a difficult time for the pet insurance sector
- The impact of COVID-19 on consumers
- Mass cancellations are unlikely …
- … but policyholders will be very price- and value-driven …
- Basic policies have a role to play during economic slowdown
- How brands can respond to COVID-19
- A proactive approach to renewals
- Product development and brand awareness can help capitalise on a renewed interest in switching
- Extras and partnerships can help with differentiation
- Remaining committed to supporting customers
Issues and Insights
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- Consumers will be extremely value-driven
- The facts
- The implications
- A long-term vision is needed for the market to return to growth
- The facts
- The implications
The Market – What You Need to Know
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- Pet insurance market contracts for the first time in 2019
- … but a recovery is expected from 2021
- Number of subscribers falls for second year in a row
- Household expenditure on vet services continues to rise
- Average claim value reaches new high
Market Size and Forecast
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- Impact of COVID-19 on pet insurance
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- Figure 16: Expected impact of COVID-19 on pet insurance, short, medium and long term, [17 July 2020]
- Short term
- Medium term
- Long term
- Pet insurance market contracts for the first time in 2019
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- Figure 17: Value of pet insurance gross written premiums, 2015-20*
- Number of subscribers falls by 4% in 2019
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- Figure 18: Size of the pet insurance market, by exposure, subscribers and gross written premiums, 2015-19
- The market will contract again in 2020, but growth will return from 2021
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- Figure 19: Forecast of pet insurance gross written premiums, 2015-25
- Figure 20: Forecast of pet insurance gross written premiums, 2020-25
- How a COVID-19 economic slowdown will reshape the market
- Rising unemployment will hit confidence and discretionary spending
- What can we learn from previous slowdowns?
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- Figure 21: Forecast of pet insurance gross written premiums, 2007-17
- A different starting point for consumers and pet insurers
Market Segmentation
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- Number of subscribers falls for second year in a row
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- Figure 22: Number of pet insurance policy subscribers, by type of pet, 2015-19
- Multi-pet policies on the rise
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- Figure 23: Exposure to subscriber ratio, 2015-19
- GWP for cat policies continue to grow …
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- Figure 24: Pet insurance gross written premiums, by type of pet, 2015-19
- … while the average cat insurance premium paid remains unchanged
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- Figure 25: Average pet insurance premium (based on exposure), by type of pet, 2015-19
Market Drivers
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- Household expenditure on vet services continues to rise
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- Figure 26: Average UK weekly household expenditure on pets, by component, 2014/15-2018/19
- Average claim value reaches new high
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- Figure 27: Number of claims notified and average claim value, 2013-19
- Claims incurred continue to grow
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- Figure 28: Gross claims incurred and claims ratio, 2013-19
- Pet insurance complaints fall but a higher share are upheld
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- Figure 29: Number of pet insurance complaint enquiries, new cases and percentage of cases upheld, 2014/15-2019/20
Market Environment
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- Confidence picks up as lockdown eases …
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- Figure 30: The financial confidence index, January 2015-June 2020
- … and households feel upbeat about their finances
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- Figure 31: The financial wellbeing index, January 2015-June 2020
- COVID-19: FCA introduces temporary guidelines to support customers
Companies and Brands – What You Need to Know
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- Allianz cements its position in the market
- Aviva partners with Animal Friends
- Bought By Many continues to disrupt and expand
- Consumers likely to take more notice of 24/7 video consultations post-COVID-19
- Advertising expenditure falls
- Petplan enjoys highest levels of awareness among pet specialists
Market Share
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- Allianz cements its position in the market
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- Figure 32: Estimated market share of pet insurance by GWP, 2019
- The market remains concentrated
Competitive Strategies
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- COVID-19: insurers’ commitment to support pet insurance customers
- Aviva partners with Animal Friends
- Allianz completes acquisitions of LV= and Legal & General’s general insurance businesses
- Pinnacle underwrites new Argos and Sainsbury’s Bank products
- Bought By Many removes 14-day waiting period for switchers …
- … and continues to expand even during lockdown
Launch Activity and Innovation
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- Consumers likely to take more notice of free 24/7 video consultations post-COVID-19
- Animal Friends partners with Joii app
- FirstVet continues to expand
- Opportunities for innovative partnerships
Advertising and Marketing Activity
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- Advertising expenditure falls
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- Figure 33: Total above-the-line, online display and direct mail advertising expenditure on pet insurance products, 2015/16-2019/20
- How COVID-19 can impact promotion and advertising
- Top 10 advertisers account for vast majority of spending
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- Figure 34: Top 10 above-the-line, online display and direct mail advertisers of pet insurance products 2019/20
- TV is the dominant channel for ATL advertising …
- … but digital and social media are likely to grow post-COVID-19
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- Figure 35: Total above-the-line, online display and direct mail advertising expenditure on pet insurance products, by media type, 2019/20
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 36: Attitudes towards and usage of selected brands, June 2020
- Key brand metrics
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- Figure 37: Key metrics for selected brands, June 2020
- Brand attitudes: Tesco Bank more likely to be associated with rewarding loyalty
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- Figure 38: Attitudes, by brand, June 2020
- Brand personality: Pet specialists more likely to be seen as fun …
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- Figure 39: Brand personality – macro image, June 2020
- … and as reassuring
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- Figure 40: Brand personality – micro image, June 2020
- Brand analysis
- Petplan enjoys highest levels of awareness among pet specialists
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- Figure 41: User profile of Petplan, June 2020
- Tesco Bank benefits from association with Clubcard
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- Figure 42: User profile of Tesco Bank, June 2020
- MORE TH>N lacks differentiation
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- Figure 43: User profile of MORE TH>N, June 2020
- Direct Line capitalises on brand recognition
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- Figure 44: User profile of Direct Line, June 2020
- Animal Friends associated with most positive attributes
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- Figure 45: User profile of Animal Friends, June 2020
- Bought by Many lacks awareness
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- Figure 46: User profile of Bought by Many, June 2020
The Consumer – What You Need to Know
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- 54% of people own a pet
- 47% of pet owners have insurance
- Mid-level policies are the most common
- Quality is the most important purchase driver
- Retailers could have an advantage during a difficult economic climate
- Majority of policyholders find the purchase and research journey easy
- Despite COVID-19, people are not looking to cancel
Pet Ownership
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- 54% of people own a pet
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- Figure 47: Ownership of pets, May 2020
- Lockdown has increased interest in owning a pet
- 32% of cat owners have more than one animal
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- Figure 48: Number of dogs or cats owned, May 2020
Pet Insurance Penetration
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- 47% of pet owners have insurance
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- Figure 49: Pet insurance penetration, by age, May 2020
- Dog policies are the most common
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- Figure 50: Pet insurance penetration, by type of pet owned, May 2020
Level of Cover Held
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- Mid-level policies are the most common …
- … with high-level a close second
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- Figure 51: Level of cover held, May 2020
- Basic policies have a role to play during economic slowdown
- Pet health plans can help struggling households with budgeting
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- Figure 52: Level of cover held, by socio-economic group, May 2020
Purchase Drivers of Pet Insurance
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- Quality is the most important aspect …
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- Figure 53: Purchase drivers of pet insurance, May 2020
- … but COVID-19 to put more emphasis on pricing and value
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- Figure 54: Purchase drivers of pet insurance, by level of cover held, May 2020
- Innovation as a means to an end
Perceptions of Types of Pet Insurance Providers
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- The appeal of pet specialists
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- Figure 55: Correspondence analysis of pet insurance providers, May 2020
- Retailers could have an advantage during a difficult economic climate
- General insurers fail to stand out from the crowd
- Opportunities for charities to leverage trust in their brands
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- Figure 56: Correspondence analysis of pet insurance providers, table output, May 2020
Perceptions of Research and Purchase Journey
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- Getting a quote more likely to be seen as very easy …
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- Figure 57: Perceptions of pet insurance research and purchase journey, May 2020
- … but comparing policies is more complicated
- More work to do when it comes to terminology and wording
- … but majority of policyholders ultimately think the process is easy
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- Figure 58: Overall simplicity of pet insurance research and purchase journey, May 2020
Pet Insurance Intentions
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- Despite COVID-19, people are not looking to cancel …
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- Figure 59: Pet insurance intentions, May 2020
- … but policyholders will be very price- and value-driven …
- … which may lead to a renewed interest in switching
- Competition expected to be higher in the mid-level segment
- People with higher cover more open to accepting higher excess
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- Figure 60: Pet insurance intentions, by level of cover held, May 2020
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Product definitions
- Consumer research methodology
- Correspondence analysis methodology
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