Table of Contents
Overview
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- What you need to know
- Products covered in this report
Executive Summary
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- The market
- GWP topped £1 billion in 2016 and is forecast for further growth
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- Figure 1: Forecast of pet insurance gross written premiums – Fan chart, 2012-22
- Sharp rise in average premiums counteracts slow subscriber growth
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- Figure 2: Average pet insurance premium (based on exposure), by type of pet, 2012-16
- The average pet claim is over £750
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- Figure 3: Value of gross pet insurance claims incurred and average pet insurance claims, 2013-16
- Companies and brands
- Petplan is the UK’s largest pet insurer
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- Figure 4: Pet insurance providers currently used by consumers, May 2017
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- Figure 5: Type of pet insurance provider used by consumers, May 2017
- Subscriptions and monitoring kits open new opportunities
- Above-the-line advertising spend increased to £6.7 million in 2016/17
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- Figure 6: Total above-the line, online display and direct mail advertising expenditure on pet insurance, 2012/13-2016/17
- The consumer
- Half of households have a cat or dog
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- Figure 7: Ownership of pets, May 2017
- Growth of pet insurance penetration has stalled
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- Figure 8: Pet insurance ownership, 2014-17
- 72% of policyholders have a lifetime policy
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- Figure 9: Type of pet insurance policy held, May 2017
- Pet policyholders look for value, not just the cheapest option
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- Figure 10: Factors considered when choosing a pet insurance policy, May 2017
- Policyholders are generally confident that their insurance is sufficient
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- Figure 11: Attitudes towards pet insurance, May 2017
- What we think
Issues and Insights
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- Growth in pet insurance has slipped
- The facts
- The implications
- Price will come under greater scrutiny as household finances are squeezed
- The facts
- The implications
- Monitoring kits set for growth
- The facts
- The implications
The Market – What You Need to Know
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- GWP topped £1 billion in 2016 and is forecast for further growth
- Sharp rise in average premiums counteracted slow subscriber growth
- There are over 16 million cats and dogs in the UK
- The average pet claim is over £750
Market Size and Forecast
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- Pet insurance was valued at over £1 billion for the first time in 2016
- Policyholders face pressure from rising average premiums and inflation
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- Figure 12: Size of the pet insurance market, by gross written premiums, 2013-17
- Figure 13: Size of the pet insurance market, by exposure years, number of subscribers and gross written premiums, 2012-16
- Premiums forecast for further growth
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- Figure 14: Forecast of pet insurance gross written premiums – Fan chart, 2012-22
- Figure 15: Forecast of pet insurance gross written premiums, at current and constant prices, 2012-22
- Forecast methodology
Market Segmentation
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- Growth in the number of subscribers fell in 2016
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- Figure 16: Number of pet insurance policy subscribers, by type of pet, 2012-16
- Multi-pet policies have fallen in popularity
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- Figure 17: Exposure to subscriber ratio, by type of pet (cat and dog only), 2012-16
- Dog policies account for three quarters of pet insurance GWP
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- Figure 18: Pet insurance gross written premiums, by type of pet, 2012-16
- Sharp rise in premiums
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- Figure 19: Average pet insurance premium (based on exposure), by type of pet, 2012-16
Market Drivers
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- There are over 16 million cats and dogs in the UK
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- Figure 20: Size of UK pet population, 2016/17
- Spending on pets is increasing
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- Figure 21: Average weekly household spending on pets – UK, by category, 2013-16
- The average pet claim is over £750
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- Figure 22: Value and volume of pet insurance claims incurred, claims ratio and average claim value, 2012-16
- Tax rises put further pressure on premiums
Companies and Brands – What You Need to Know
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- Petplan is the UK’s largest pet insurer
- Subscriptions and monitoring kits open new opportunities
- Above-the-line advertising spend increased to £6.7 million in 2016/17
Pet Insurance Providers
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- Petplan is the UK’s largest pet insurer
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- Figure 23: Pet insurance provider, May 2017
- Consumers prefer to use pet specialists
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- Figure 24: Type of pet insurer, May 2017
- A congested market
Competitive Strategies
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- MORE TH>N’s DOGGYSSENTI>LS brings insurance and pet care together
- Monitoring kits to hit the mainstream
- Price is key but brand retains a huge influence
- Lower value policies could be set for growth
- Bought By Many enters the market with cover for pre-existing conditions
- John Lewis chooses not to apply penalty fee for vet referrals
Advertising and Marketing Activity
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- Above-the-line advertising expenditure increased in the last year
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- Figure 25: Total above-the line, online display and direct mail advertising expenditure on pet insurance, 2012/13-2016/17
- Petplan accounts for almost half of adspend
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- Figure 26: Top 10 pet insurance advertisers using above-the-line, online display and direct mail channels, 2016/17
- TV is the dominant advertising channel
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- Figure 27: Total above-the line, online display and direct mail advertising expenditure on pet insurance, by media type, 2016/17
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Half of households have a cat or dog
- Growth of pet insurance penetration has stalled
- 72% of policyholders have a lifetime policy
- Pet policyholders look for value, not just the cheapest option
- Policyholders are generally confident that their insurance is sufficient
Pet Ownership
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- Half of households have a cat or dog
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- Figure 28: Ownership of pets, May 2017
- Families are more likely to have pets
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- Figure 29: Ownership of pets, by whether respondent has children aged under-18, May 2017
Penetration of Pet Insurance
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- Growth of pet insurance penetration has stalled
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- Figure 30: Pet insurance ownership, 2014-17
- Dog owners are most likely to have insurance
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- Figure 31: Penetration of pet insurance, by type of pet, May 2017
- Cost is a major barrier to ownership
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- Figure 32: Penetration of cat and dog insurance, by annual household income, May 2017
Level of Cover Held
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- Mid-level cover is the most popular policy type
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- Figure 33: Type of pet policy held, May 2017
- Low-cover policies are unpopular
- Retailers are used for cheaper cover
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- Figure 34: Type of policy held, by type of pet insurance provider, May 2017
Important Factors in Choosing a Policy
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- Value is key
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- Figure 35: Factors considered when choosing a pet insurance policy, May 2017
- Prior relationships with providers have limited influence
- …but general insurance customers are more open to cross-selling
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- Figure 36: Choice of “Previous experience of using the provider for another type of insurance”, by type of pet insurer, May 2017
- Choice of vet is important to high-level policyholders
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- Figure 37: Choice of “Being able to choose which vet to use for treatment”, by type of pet policy held, May 2017
Attitudes towards Pet Insurance
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- Policyholders are generally confident that their insurance is sufficient
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- Figure 38: Attitudes towards pet insurance, May 2017
- Pet experts hold authority over other insurers
- Monitoring kits appeal to younger pet owners and those with high-level cover
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- Figure 39: Response to the statement “I would like to use an activity monitoring kit to help track my pet’s level of exercise (eg a step counter)”, by age, May 2017
- Most would pay more for higher cover, including pre-existing conditions
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- Figure 40: Response to the statement “I would be willing to pay more to switch to a provider that offers cover for pre-existing conditions”, by type of pet policy held, May 2016
Appendix – Distributor/Underwriter Relationships
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- Figure 41: Selected providers of pet insurance and their underwriting partners, July 2017
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Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Figure 42: Forecast of value of gross written pet insurance premiums, 2017-22
- Forecast methodology
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