Table of Contents
Introduction and Abbreviations
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- Aims of the report
- Consumer research
- ACORN
- Abbreviations
Executive Summary
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- Just under half of the population currently own a pet
- Veterinary inflation continues to rise
- There are now around 1.85 million pet insurance policies in force…
- …and the total market is worth around £245 million
- Petplan remains market leader, but Direct Line and RSA have gained share
- Over half of pet owners made unplanned visits to the vets in last two years
- Four in ten pet owners cannot easily afford their vets’ bills
- Nearly half of all pet owners think pet insurance is worth the money
- The research suggests penetration could rise to over a fifth of pet owners
Market Factors
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- Just under half of all households in the UK own a pet
- The dog population has been in decline for the last ten years…
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- Figure 1: Total population of household cats and dogs in the UK, 1992-2002
- …but the cat population has risen over the last decade
- Changing lifestyles are having a big impact on patterns of pet ownership
- The increase in one-person households has affected pet ownership
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- Figure 2: Marital status, England and Wales, by gender, 1971-2001
- Changes in employment patterns have also affected pet ownership
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- Figure 3: Female participation in the labour force, 1984-2003*
- A fall in the number of children could restrain the pet population
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- Figure 4: Number of children in the UK population, by age group, 1997-2007
- Economic backdrop should remain favourable for pet insurers
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- Figure 5: Households’ real disposable income, 1997-2007
- Households are spending around £3.5 billion a year on their pets
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- Figure 6: Household spending on pets, 2001-02
- More vets are spending a greater portion of time on small animals
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- Figure 7: Total number of vets and proportion of time spent on activities, 1998-2002
- Veterinary inflation has encouraged take-up of pet insurance
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- Figure 8: Veterinary fees for initial consultation, by region, 2000-03
- Further medical advances are likely to see vets’ fees rise even further
- Increasing consumer awareness could provide a boost to sales
- Consumers need to be aware of what cover they are buying
Market Size
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- There are now around 1.85 million pet insurance policies in force
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- Figure 9: Number of pet insurance policies in force, by type of pet, September 2003
- Around six in ten pet insurance policies cover dogs
- The pet insurance market is now worth around £245 million
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- Figure 10: Value of the pet insurance market, by gross premium income, 1997-2003
Key Players
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- The number of pet insurance providers has increased sharply
- The top four companies account for over 70% of the market
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- Figure 11: Pet insurance market share, by number of policies in force, 2003
- Petplan remains the clear market leader
- Direct Line and More Th>n are gaining market share
- Pet Protect’s market share has slipped in the last few years
- Other providers account for three in ten policies
Product and Pricing Developments
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- Most products cover a range of different benefits
- Lifelong cover versus fixed contract policies
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- Figure 12: Comparison of pet insurance premiums, November 2003
- The industry is likely to see a further shift to risk-based pricing
- Multiple pet discounts could become increasingly important
Distribution and Promotion
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- Pet insurers use a variety of partners to distribute their products
- Veterinary practices remain a key channel of distribution
- The supermarkets have also become important distributors
- The Internet has developed into an important access point
- Advertising will play a crucial role in future market growth
- Pet insurers spent over £5 million on advertising in last 12 months
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- Figure 13: Total adspend on pet insurance, by media type, October 2002-September 2003
- TV advertising accounted for almost 40% of total adspend
- Direct Line tops the pet insurance adspend table…
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- Figure 14: Major pet insurance advertisers, October 2002-September 2003
- …while More Th>n has also invested heavily in advertising
- Top six advertisers accounted for 93% of adspend in last 12 months
The Consumer
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- Almost one in 15 consumers own a pet insurance policy
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- Figure 15: Ownership rates for selected insurance products, September 2003
- Just under half of all households own at least one pet
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- Figure 16: Proportion of adults living in households with pets, September 2003
- Dogs and cats are the most common pets
- Most dog and cat owners have more than one pet in their household
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- Figure 17: Pet cross-holdings, September 2003
- 35-54-year-olds are the most likely to own a pet
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- Figure 18: Proportion of adults living in households with pets, by gender, age and socio-economic group, September 2003
- The presence of children has a major impact on pet ownership
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- Figure 19: Proportion of adults living in households with pets, by lifestage, presence of children, marital status and working status, September 2003
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- Figure 20: Proportion of adults living in households with pets, by TV region and ACORN categories, September 2003
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- Figure 21: Proportion of adults living in households with pets, by technology usage and newspaper readership, September 2003
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- Figure 22: Proportion of adults living in households with pets, by commercial TV viewing and supermarket usage, September 2003
- One in seven pet owners hold a pet insurance policy
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- Figure 23: Penetration of pet insurance, by type of pet, September 2003
- Dog owners are the most likely to take out pet insurance
- A fifth of ABC1 pet owners hold insurance cover
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- Figure 24: Penetration of pet insurance, by gender, age, socio-economic group and TV region, September 2003
- Ownership of pet insurance lowest among heavy television viewers
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- Figure 25: Penetration of pet insurance, by supermarket usage and commercial TV viewing, September 2003
- Over half of pet owners made unplanned visits to the vets in last two years
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- Figure 26: Frequency of unexpected visits to the vets, by gender, age and socio-economic group, September 2003
- AB pet owners are more likely to make unforeseen trips to the vets
- Pet insurance policyholders visit their vets more often
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- Figure 27: Frequency of unexpected visits to the vets, by ownership of pet insurance, September 2003
- Dog owners are the most frequent visitors to the vets
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- Figure 28: Frequency of unexpected visits to the vets, by type of pet, September 2003
- Four in ten pet owners cannot easily afford their vets’ bills
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- Figure 29: Perceived affordability of vets’ bills, by gender, age, socio-economic group and lifestage, September 2003
- Almost half of 35-44-year-old pet owners struggle to pay vets’ bills
- Marks & Spencer’s shoppers most likely to be able to afford vets’ bills
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- Figure 30: Perceived affordability of vets’ bills, by supermarket usage and commercial TV viewing, September 2003
- Pet insurance holders are less likely to be able to afford vets’ bills
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- Figure 31: Perceived affordability of vets’ bills, by ownership of pet insurance, September 2003
- Nearly half of all pet owners think pet insurance is worth the money
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- Figure 32: Perceived value for money of pet insurance, by gender, age, socio-economic group and lifestage, September 2003
- 18-34-year-olds are more likely to feel pet insurance is worth the money
- Heavy television viewers see pet insurance as good value
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- Figure 33: Perceived value for money of pet insurance, by supermarket usage and commercial TV viewing, September 2003
- More than eight in ten policyholders feel pet insurance is good value
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- Figure 34: Perceived value for money of pet insurance, by ownership of pet insurance, September 2003
- More than three quarters of policyholders expect to renew their cover
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- Figure 35: Proportion considering arranging or renewing pet insurance, September 2003
- Overall penetration could rise to more than one in five pet owners
- Over a quarter of 35-54-year-old pet owners intend to take out cover
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- Figure 36: Proportion considering arranging/renewing pet insurance, by gender, age, socio-economic group and TV region, September 2003
- Medium television viewers most likely to be considering taking out pet insurance
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- Figure 37: Proportion considering arranging/renewing pet insurance, by supermarket usage and commercial TV viewing, September 2003
The Future
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- Considerable potential to increase ownership of pet insurance
- Pet insurance could develop into a mainstream product offering
- The impact of veterinary inflation could hinder market growth
- The shift to risk-based pricing is expected to gather pace
- The next few years should see a substantial growth in Internet sales
Forecast
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- A healthy future for the pet insurance sector
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- Figure 38: Forecast of the UK pet insurance market, by value, 2003-07
- An innovative market
- More pets mean more policy sales
- Internet sales will continue to grow
- Factors incorporated
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