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 increased by 14% in 2017, reaching £1.2 billion and set for further growth
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- Figure 1: Forecast of pet insurance gross written premiums – Fan chart, 2013-23
- Dog and cat policies’ premiums continue to rise
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- Figure 2: Average pet insurance premium (based on exposure), by type of pet, 2013-17
- UK pet population continues to grow
- Gross written premiums growing faster than claims incurred
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- Figure 3: Gross claims incurred, written premiums and claims ratio, 2013-17
- Average pet claim unchanged but remains at its highest
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- Figure 4: Number of claims notified and average claim value, 2013-17
- Companies and brands
- Petplan remains the largest pet insurer in the UK
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- Figure 5: Pet insurance provider, May 2018
- Market developments pointed at increasing convenience
- Above-the-line advertising: Animal Friends accounts for 40%
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- Figure 6: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, 2013/14-2017/18
- TV is the dominant advertising channel, but radio bounces back
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- Figure 7: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, by media type, 2017/18
- The consumer
- 55% of pet owners have pet insurance
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- Figure 8: Penetration of pet insurance, by type of pet, May 2018
- 70% of policyholders have lifetime cover
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- Figure 9: Type of pet policy held, May 2018
- 18% of policyholders have switched provider in the last 12 months
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- Figure 10: Pet insurance switching activity, May 2018
- Personalisation in payment options could prove popular
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- Figure 11: Attitudes towards pet insurance, May 2018
- Value is the biggest reason not to buy insurance
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- Figure 12: Reasons for not having pet insurance, May 2018
- What we think
Issues and Insights
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- Realising the market’s full potential: beware of the dog
- The facts
- The implications
- From expanding to enhancing
- The facts
- The implications
The Market – What You Need to Know
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- GWP reach £1.2 billion, a growth of 14% in 2017
- Dog and cat policies’ premiums continue to rise
- Dog and cat populations rise, while spending on pets continues to grow
- Gross written premiums growing faster than claims incurred
Market Size and Forecast
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- Pet insurance premiums grew to £1.2 billion in 2017…
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- Figure 13: Value of pet insurance gross written premiums, 2013-18
- …driven by an 11% increase in the number of subscribers
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- Figure 14: Size of the pet insurance market, by exposure, subscribers and gross written premiums, 2013-17
- Pet insurance premiums forecast to continue showing strong growth
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- Figure 15: Forecast of pet insurance gross written premiums – Fan chart, 2013-23
- Figure 16: Forecast of pet insurance gross written premiums, at current and constant prices, 2013-23
- Forecast methodology
Market Segmentation
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- The number of policyholders returned to double-digit growth in 2017
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- Figure 17: Number of pet insurance policy subscribers, by type of pet, 2013-17
- Exposure growing more slowly than number of subscribers
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- Figure 18: Exposure* and exposure to subscriber ratios**, 2013-17
- Dog policies account for 76% of pet insurance GWP
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- Figure 19: Pet insurance gross written premiums, by type of pet, 2013-17
- Dog and cat policies’ premiums continue to rise
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- Figure 20: Average pet insurance premium (based on exposure), by type of pet, 2013-17
Market Drivers
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- Dog and cat population continues to grow
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- Figure 21: Size of UK pet population, average of 2017 and 2018
- Households with children more likely to have pets
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- Figure 22: Proportion of households with children that have pets, 2017 and 2018
- Households now spend £5.40 per week on pets
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- Figure 23: Average UK weekly household expenditure on pets, by component, 2013-17
- Gross written premiums growing faster than claims incurred
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- Figure 24: Gross claims incurred, written premiums and claims ratio, 2013-17
- Average pet claim unchanged but remains at its highest
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- Figure 25: Number of claims notified and average claim value, 2013-17
Companies and Brands – What You Need to Know
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- Petplan remains the largest pet insurer in the UK
- Market developments pointed at increasing convenience
- Above-the-line advertising: Animal Friends accounts for 40%
Pet Insurance Providers
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- Petplan remains the largest pet insurer in the UK
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- Figure 26: Pet insurance provider, May 2018
- Pet specialists’ appeal is clear
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- Figure 27: Type of pet insurance provider, May 2018
- Retailers could be shaking things up
- Opportunities for insurers and charities to work together
Competitive Strategies
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- Bought By Many introduces Snap Claims tool for a speedy claims process
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- Figure 28: Bought By Many’s Snap Claims Tool
- 24/7 vet nurse chat as a valuable extra for policyholders
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- Figure 29: PawSquad 24/7 advice line via chat and video chat
- Direct Line and Pet Drugs Online launch new medicine delivery service
- Pets at Home phases down its insurance products, directing new customers to Petplan
- Homebase stops offering pet insurance
- Compare Cover adds pet insurance to its site
- Health subscription box Protect My Pet to partner with insurance providers
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- Figure 30: Protect My Pet Plus Health subscription box
- Pet insurance as an increasingly attractive employee benefit
- Opportunities for insurance to cover travelling pets in times of uncertainty
Product Case Study: Pet Health Cash Plans
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- What are they?
- Advantages
- Prospects for expansion
- Health Cash Plans and Insurance
- Connection with insurers
- Examples
Advertising and Marketing Activity
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- Above-the-line advertising expenditure decreased in the last year
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- Figure 31: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, 2013/14-2017/18
- Animal Friends accounts for 40% of adspend
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- Figure 32: Top 10 pet insurance advertisers using above-the-line, online display and direct mail channels, 2015/16-2017/18
- TV is the dominant advertising channel
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- Figure 33: Total above-the-line, online display and direct mail advertising expenditure on pet insurance, by media type, 2017/18
- Sponsorships and partnerships
- Cashback sites
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- 55% of pet owners have pet insurance
- 70% of policyholders have lifetime cover
- 18% of policyholders have switched provider in the last 12 months
- Personalisation in payment options could prove popular
- Value is the biggest reason not to buy insurance
Penetration of Pet Insurance
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- Pet ownership continues to increase
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- Figure 34: Ownership of pets, May 2018
- 55% of pet owners have at least one of their animals insured
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- Figure 35: Penetration of pet insurance, by type of pet, May 2018
- Millennials are significantly more likely to buy insurance
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- Figure 36: Penetration of pet insurance, by generation, May 2018
Level of Cover Held
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- 70% of policyholders have lifetime cover
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- Figure 37: Type of pet policy held, May 2018
- Pet specialists preferred for higher-cover policies and retailers for cheaper alternatives
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- Figure 38: Type of policy held, by type of pet insurance provider, May 2018
- Accident-only and third-party liability covers could find a niche in the sharing economy
Switching Activity
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- 18% of policyholders have switched provider in the last 12 months
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- Figure 39: Pet insurance switching activity, May 2018
- Policyholders more likely to be loyal to pet specialists
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- Figure 40: Switching activity, by type of pet insurance provider, May 2018
- Price comparison sites have a role to play
Attitudes towards Pet Insurance
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- Owners are confident that they understand what their policy covers
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- Figure 41: Attitudes towards pet insurance, May 2018
- Personalisation in payment options could prove popular
- Health-monitoring kits have huge potential but providers need to integrate them into fairer pricing
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- Figure 42: Link AKC smart collar and app
- Increasing costs as pets get older are an opportunity to reassure owners
- Age of owner related to concerns over age of pet
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- Figure 43: Agreement with the statement “I am concerned about the cost of pet insurance increasing as my pet ages” – CHAID – Tree output, May 2018
Reasons for Not Having Pet Insurance
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- Value is the biggest reason not to buy insurance
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- Figure 44: Reasons for not having pet insurance, May 2018
- Uninsured owners tend to have one main reason for not buying a policy
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- Figure 45: Reasons for not having pet insurance, by number of reasons given, May 2018
Appendix – Distributor/Underwriter Relationships
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- Figure 46: Selected providers of pet insurance and their underwriting partners, August 2018
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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 47: Forecast of value of gross written pet insurance premiums, 2018-23
- Forecast methodology
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