Table of Contents
Executive Summary
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- The market
- Standard model predicts solid growth in premium income
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- Figure 1: Forecast of pet insurance premiums, at current prices – fan chart, 2009-19
- Stable exposure despite dip in subscriber numbers
- Market segmentation
- Market factors
- Size of the UK pet population
- Average cat and dog lifespans
- Counting the cost of caring for pets
- Claims ratio
- Incidence of fraud
- Company, brands and innovation
- Two brands dominate
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- Figure 2: Market shares of the top four underwriters, based on GWP, 2013
- Online distribution focus
- Product innovation
- Brand reinforcement
- The consumer
- Pet ownership
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- Figure 3: Number of pets in household, by type of pet, June 2014
- Insurance take-up
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- Figure 4: Ownership of common household pets and penetration of pet insurance, June 2014
- Product choice – determining factors
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- Figure 5: Factors influencing choice of policy (top five only), June 2014
- Frequency of visits to vets for non-routine treatment
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- Figure 6: Number of unexpected visits to vets within past two years, June 2014
- Attitudes among the non-insured
- Future consideration of pet insurance
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- Figure 7: Likelihood of renewing or taking out new pet insurance policy within the coming year, June 2014
- What we think
Issues and Insights
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- There remains good potential to expand the market
- The facts
- The implications
- Providers need to attract new customers to reduce the risk of an ageing portfolio
- The facts
- The implications
- The secret to sustainable premiums is effectively managing claims costs
- The facts
- The implications
Trend Application
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- Trend: Play Ethic
- Trend: Return to the Experts
- Trend: Creature Comfort
Market Drivers
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- Key points
- There are as many pets as people in the UK
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- Figure 8: Size of UK pet population, 2014
- After food, veterinary costs account for the largest proportion of household spending on pets
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- Figure 9: Average weekly household spending on pets – UK, by category, 2008, 2011 and 2012
- Rise in veterinary fees continues to outpace inflation…
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- Figure 10: Total annual household spending on pets, by category, 2008-12
- …and drive up the cost of claims incurred…
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- Figure 11: Value and incidence of pet insurance claims incurred, claims ratio and average claim value, 2009-13
- …impacting on premiums
- Fraudulent claims amounted to £1.4 million in 2012
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- Figure 12: Fraud repudiation rates, 2010-12
Market SWOT Analysis
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- Figure 13: The pet insurance market– SWOT analysis, 2014
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Who’s Innovating?
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- Key points
- New providers launch in partnership with third-party specialists
- Healthy Pets and Sterling Pet Solutions launch new white-label propositions
- Existing providers modify their pet policy ranges to target a wider range of needs and budgets
Market Size and Forecast
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- Key points
- Growth in premium income from pet insurance policies slowed in 2013
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- Figure 14: Size of the pet insurance market, by exposure years, number of subscribers and gross written premiums, 2009-13
- Growth in multi-pet policies
- Solid market growth forecast
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- Figure 15: Forecast of pet insurance premiums – fan chart, 2009-19
- Figure 16: Forecast of pet insurance gross written premiums, at current and constant prices, 2009-19
- Forecast methodology
- Fan chart explanation
Market Segmentation
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- Key points
- Number of dog policy subscribers declined 6% in 2013
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- Figure 17: Number of pet insurance policy subscribers, by type of pet, 2010-13
- Cat exposure grew 7% in 2013, driven by greater take-up of multi-pet policies
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- Figure 18: Pet insurance exposure, by number of years, 2010-13
- Premium income relating to cat policies was up 25% in 2013…
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- Figure 19: Pet insurance gross written premiums, by type of pet, 2010-13
- …reflecting a significant increase in the average cat premium
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- Figure 20: Average pet insurance premium (based on exposure), by type of pet, 2010-13
Market Share
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- Key points
- Allianz and RSA dominate the underwriting of UK pet policies
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- Figure 21: Leading pet insurance underwriters – UK, by gross written premium, 2012-13
- Pet insurance providers and their underwriters
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- Figure 22: Selected providers of pet insurance and their underwriting partners, June 2014
Companies and Products
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- Allianz Insurance
- RSA
- Direct Line Group
Brand Communication and Promotion
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- Key points
- Providers cut back on adspend
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- Figure 23: Top 12 advertisers of pet insurance, 2011/12-2013/14
- TV and press account for the largest proportion of spend
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- Figure 24: Proportional distribution of advertising expenditure, by media type, 2011/12-2013/14
- A note on adspend
Channels to Market
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- Key points
- Most pet insurance policies are sold online
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- Figure 25: Method of arranging (most recent) pet insurance policy, July 2013
Pet Ownership
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- Key points
- Survey background
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- Figure 26: Proportion of sample with pets in household, June 2014
- Just over half of all adult internet users have at least one pet in their household
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- Figure 27: Number of pets in household, by type of pet, June 2014
- C2 families represent a key target group
Penetration of Pet Insurance
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- Key points
- Most pet owners do not have insurance
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- Figure 28: Proportion of all pet owners who have pet insurance, June 2014
- Take-up is highest among dog and equine owners
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- Figure 29: Ownership of common household pets and penetration of pet insurance, June 2014
- Most policyholders have non-lifetime cover
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- Figure 30: Type of pet insurance policy held, June 2014
- Dog owners are slightly more likely than cat owners to go for lifetime cover
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- Figure 31: Type of pet insurance policy held, by type of pet, June 2014
Factors Influencing Policy Selection
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- Key points
- Many pet policyholders made their product selection based on a personal recommendation
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- Figure 32: Factors influencing choice of policy, June 2014
Frequency of Non-routine Visits to Vets
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- Key points
- Half of all pet owners have made unexpected visits to the vets in the past two years
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- Figure 33: Number of unexpected visits to vets within past two years, June 2014
- Insured pet owners are more likely to take their ill or injured pet to a vet
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- Figure 34: Number of unexpected visits to vets within past two years, by ownership of pet insurance and type of pet(s) owned, June 2014
Attitudes Among Non-insured Pet Owners
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- Key points
- Cost concerns both inhibit and drive pet insurance sales
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- Figure 35: Agreement with statements about pet insurance and veterinary fees, by type of pet, June 2014
Future Consideration of Pet Insurance
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- Key points
- Stable market penetration…
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- Figure 36: Likelihood of renewing or taking out new pet insurance policy within the coming year, June 2014
- … with policy lapses likely to be offset by new first-time customers
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- Figure 37: Likelihood of renewing or taking out a new pet insurance policy within the coming year, by existing policyholders and non-policyholders, June 2014
Appendix – Market Size and Forecast
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- Total market forecast – best- and worst-case scenarios
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- Figure 38: Forecast of pet insurance gross written premiums – best- and worst-case scenarios, at current prices, 2014-19
- Forecast methodology
- Fan chart explanation
Appendix – Pet Ownership
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- Figure 39: Presence of pets in household, by type of pet and demographics, June 2014
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Appendix – Penetration of Pet Insurance
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- Figure 40: Any pet owners who have insurance, by demographics, June 2014
- Figure 41: Dog owners who have insurance, by demographics, June 2014
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- Figure 42: Cat owners who have insurance, by demographics, June 2014
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- Figure 43: Type of policy held, by demographics, June 2014
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Appendix – Factors Influencing Policy Selection
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- Figure 44: Factors influencing choice of policy (top five), by demographics, June 2014
- Figure 45: Factors influencing choice of policy (next five), by demographics, June 2014
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Appendix – Frequency of Non-routine Visits to Vets
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- Figure 46: Number of unexpected visits to vets within past two years, by demographics, June 2014
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Appendix – Attitudes Among Non-insured Pet Owners
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- Figure 47: Agreement with statements about pet insurance and veterinary fees (top five responses), by demographics, June 2014
- Figure 48: Agreement with statements about pet insurance and veterinary fees (next four responses), by demographics, June 2014
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Appendix – Future Consideration of Pet Insurance
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- Figure 49: Likelihood of renewing or taking out a new pet insurance policy within the coming year, by demographics, June 2014
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