Table of Contents
Introduction and Abbreviations
-
- The pet insurance market grows more sophisticated
- Report contents
- Global information and research
- Consumer research
- ACORN
- Abbreviations
Premier Insight
-
- Control treatment costs through a ‘preferred network' scheme
- Partnerships are the catalyst for market growth
- UK know-how is in demand
- The cost of liability for dog accidents is an emerging issue
Executive Summary
-
- Lifelong versus 12-month capped versus per condition
- A fusion of benefits support pet insurance sales
- The pet insurance market is valued at £265 million in 2005
-
- Figure 1: Value of the pet insurance market, 2000-05
- Insurers and distributors focus on regulation
- Key players
-
- Figure 2: Pet insurance market share, 2005
- Achieving sophistication in an increasingly competitive market
- Consumer insight
- Children influence pet ownership
- Veterinary costs will continue to rise
Market Factors
-
- Pet insurance product overview
- Market review
- Psychology of pet insurance
- 14 years is the average life-span for common pets
-
- Figure 3: Life-span of common and exotic pets, December 2005
- The market for cat insurance has enlarged rapidly
-
- Figure 4: Cat and dog owning households in the UK, 1994-2003
- Life experience may encourage ownership
- Consumer fondness for the single life favours the cat
-
- Figure 5: Marital condition, England and Wales, by gender, 1971-2003
- Changes in tradition do not bode well for high maintenance pets
-
- Figure 6: Women in employment, 1994-2004
- Children drive demand for pets
-
- Figure 7: Trends in the UK child population, 1999-2008
- A quarter of pet-related household expenditure is given to the health of the animal
-
- Figure 8: Average household expenditure on pets, 2003/04
- Consumer expenditure has risen by 29% since 2000
-
- Figure 9: PDI and consumer expenditure, at current prices, 2000-10
- Time spent by vets on treating small animals rose by 7.5% between 1998 and 2002
-
- Figure 10: Number of vets in practice and proportion of time spent on activities, 1998-2002
- Trends in veterinary fees
- Fees will rise in view of Veterinary Medicines Regulations
- Veterinary staff must stick to the rules or be regulated
Market Size
-
- Pet insurance premium income has risen by 64% since 2001
-
- Figure 11: Estimated value of the pet insurance market, by GPI, 1997-2005
- Market growth will be achieved through new customer acquisition
- Dogs make up the majority of business
-
- Figure 12: Proportion of small animal policies, by type of pet, November 2005
- Lack of knowledge can prevent sales
- Overseas opportunities
- Retailers are key to growing the market
- Nurture steady growth
- White-label full services
Underwriters and Distributors
-
- Allianz Cornhill is the largest pet insurance underwriter
-
- Figure 13: Pet insurance market share, by number of policies in force, 2005
- UKI Partnerships
- Market share increases for AXA Insurance
- Domestic & General now underwrites Pet Protect
- Industry activity
Product Development and Pricing
-
- Premium components
- The quality of benefits is a key selling factor
-
- Figure 14: Indicative list of premiums and selected benefits, dog insurance, October 2005
- Cover can be hard to obtain for older animals
-
- Figure 15: Common benefits of pet insurance policies, October 2005
- Pets benefit from advances in human healthcare
- Factors which increase premiums
- Premiums review
- Enhance pharmaceuticals distribution in order to reduce claim costs
Distribution and Promotion Issues
-
- Pet insurers form new relationships with retailers
-
- Figure 16: Distribution channels for pet insurance, December 2005
- Direct mail accounts for 35% of pet insurance advertising expenditure
-
- Figure 17: Pet insurance and livestock advertising expenditure, major advertising outlets, 2004
- More Th>n was the largest advertiser in 2004
-
- Figure 18: Individual distributor advertising expenditure (indicative), 2004
- The Internet has a growing presence in pet insurance distribution
- Telephone conversion rate is high
- White-labelling will grow the market
Consumer Financial Activity
-
- Consumer confidence is reduced
- Relationship with the main financial services providers
- Among banks and building societies there is feverish activity around general insurance products
- Uncertainty will impact levels of borrowing
-
- Figure 19: Savings, investment, borrowing and debt repayment – consumers’ expected activity, June 2004-September 2005
- Younger and less affluent consumers to be more active
-
- Figure 20: Expected financial activity, by socio-demographic and income groups, September 2005 and average for the last 15 quarters
- Debt repayment remains high on the agenda
-
- Figure 21: Leading financial activities planned in the next six months, September 2004-September 2005
- Real promise in the property market
-
- Figure 22: Intended mortgage and property purchase activity, September 2003-September 2005
- Little change year on year in MFSP share
-
- Figure 23: Leading main financial services providers: market shares, September 2004-September 2005
- RBS should benefit from increased life and pensions business
-
- Figure 24: Saving, investment and lending market sizes, by expected customer demand and brand leaders (overall % intending to undertake activity in brackets), September 2005
- The Scottish banks will have the most active customer base
-
- Figure 25: Activity levels of main financial providers’ customer bases, September 2005
- HSBC and RBS can expect deposits to be built up
-
- Figure 26: Activity intentions and current household financial situation, by MFSP, September 2005
The Consumer and Frequency of Unexpected Consultations
-
- Single dog ownership is the most popular choice for consumers
-
- Figure 27: Pet ownership, October 2005
- Ds were most likely to reside with one dog
-
- Figure 28: Pet ownership, by gender, age, socio-economic group, lifestage and working status, October 2005
- Implications
- 45% of consumers reside with a pet
-
- Figure 29: Proportion of adults living in households with pets, by gender, age, socio-economic group, marital status and lifestage, October 2005
- Implications
- Respondents with a higher gross annual household income favour pets
-
- Figure 30: Proportion of adults living in households with pets, by working status, age/socio-economic group, gross annual household income and TV region, October 2005
- Implications
- Households with older children were most likely to have a pet
-
- Figure 31: Proportion of adults living in households with pets, by presence of children in household, October 2005
- Implications
- Tesco has become a key distributor of pet insurance by offering low premium rates and leveraging existing relationships
-
- Figure 32: Proportion of adults living in households with pets, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2005
- Implications
- Pet insurance penetration
-
- Figure 33: Penetration of pet insurance, by type of pet, October 2005
- Unforeseen veterinary bills
-
- Figure 34: Frequency of unexpected visits to the veterinary practice, October 2005
- Aged pet owners are the most frequent unexpected visitors at the vet
-
- Figure 35: Frequency of unexpected visits to the veterinary practice, by gender, age, socio-economic group, lifestage and TV region, October 2005
- Implications
- Dog owners most likely to make multiple visits to the vet
-
- Figure 36: Frequency of unexpected visits, by type of pet, October 2005
- Findings highlight an issue close to the heart of the industry
-
- Figure 37: Frequency of unexpected visits to the vet, by insurance status, October 2005
Consumer Attitudes and Targeting Opportunities
-
- 23% of pet owners invest in pet insurance
-
- Figure 38: Attitudes towards pet insurance, October 2005
- Treatment costs are high compared with essential household expenses
-
- Figure 39: Attitudes towards pet insurance, by gender, age, socio-economic group and marital status, October 2005
- Implications and opportunities
- Certain consumers favour a charity element with their pet insurance
-
- Figure 40: Attitudes towards pet insurance, by lifestage, age/socio-economic group, working status, gross annual household income and tenure, October 2005
- Implications and opportunities
- Selling opportunities exist via certain supermarkets
-
- Figure 41: Attitudes towards pet insurance, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2005
- Implications and opportunities
- Five in ten pet owners cannot easily afford veterinary bills
-
- Figure 42: Affordability of veterinary bills, by gender, age, socio-economic group and lifestage, October 2005
- Implications and opportunities
- Sainsbury's Bank has developed to offer pet insurance
-
- Figure 43: Affordability of veterinary bills, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2005
- Implications and opportunities
- Half of pet owners agreed that pet insurance is well worth the money
-
- Figure 44: Perception of value for money, by gender, age, socio-economic group and lifestage, October 2005
- Implications and opportunities
- Insurers can do more to take the product to pet owners
-
- Figure 45: Perception of value for money, by age/socio-economic group, working status, gross annual household income and TV region, October 2005
- Implications and opportunities
- Television advertising may be used to sway those with no opinion on the worth of cover
-
- Figure 46: Perception of value for money, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2005
- Implications and opportunities
- Consumer data indicate that demand for pet insurance may increase
-
- Figure 47: Proportion considering or arranging pet insurance, by gender, age, socio-economic group and marital status, October 2005
- Implications and opportunities
- Purchasing activity will be higher among supermarket shoppers
-
- Figure 48: Proportion considering or arranging pet insurance, by new technology users, newspaper readership, commercial TV viewing and supermarket usage, October 2005
- Implications and opportunities
- Pet insurance owners seem fairly content
-
- Figure 49: Attitudinal statements, by purchasing intent, October 2005
- Unexpected vet visits encourage consideration of cover
-
- Figure 50: Frequency of unexpected visits to the vet, by purchasing intent, October 2005
- Consumer typologies
- Iceland shoppers are Pet Insurance Inclined
- Group 1: Uninterested – 47% of respondents
- Group 2: Pet Insurance Inclined – 29% of respondents
- Group 3: Not Needed – 25% of respondents
-
- Figure 51: Consumer typoligies, by age, socio-economic group, lifestage, gross annual household income and supermarket usage, October 2005
- Implications and opportunities
- Further targeting opportunities
- CHAID analysis indicates that Ds are decent targets for insurers
-
- Figure 52: Main target groups, by animal type, October 2005
- Full-time workers in the pre-/no family lifestage are some of the best targets
-
- Figure 53: Main target groups, by agreement with certain statements, October 2005
Industry Views
-
- Regulatory issues
- Market development
- Advertising and promotion
- Distribution
- Product and pricing
The Future
-
- Veterinary costs will continue to rise, but rather slowly
- Insurers will leverage relationships
- The market for white-labelled products will continue to grow
- Product development
- Economic considerations could impact the purchasing decision
- Perceived selling complications may cause a slight decline in sales
- The market might become saturated but rebound
- Older pets take cover
Forecast
-
-
- Figure 54: Forecast of the pet insurance market, by value (GPI), 2005-10
- Societal trends will dampen down the market
- The onus is on the industry to drive market growth
- Factors incorporated in the forecast
-
Back to top