Worth £115 million in 1999, the pet insurance market has the potential to be worth over £1 billion assuming 100% penetration among pet owners. With rising consumer awareness of the product, the sector has expanded significantly in recent years, although fairly low penetration of pet healthcare insurance among pet owners would seem to indicate that there is significant room for development. Around 40 new providers have entered the market since 1996, as pet insurance proves to be a niche market most popular new personal line to promote. Key to the market potential of pet insurance is the number of domestic cats and dogs. The pet population has been rising in the UK, with a increase in ownership of more than one cat or dog per household, and a large rise in people keeping two or more cats. This would provide opportunities for pet insurers to offer discounts for multiple policies on more than one animal.

· Only 7% of cats and 12% dogs are insured, yet the steady rise in veterinary fees is seen as a key driver in the push for product penetration.

Specialist pet insurers have dominated the market since 1976 by marketing themselves through veterinary surgeries and pet food manufacturers, yet the three largest pet healthcare insurers have all been bought by general insurers since 1996. Pet Insurance analyses the main market drivers behind the growth of the pet healthcare insurance industry, including the changing pattern of pet ownership, and the increase in cost and scope of veterinary treatment. With the introduction of pet passports providing further scope to promote a hybrid pet/travel product, this report predicts the growth and development of the industry over the next five years, as more companies enter the sector and providers attempt to gain advantage by developing a standard product.