To keep up with vet fee inflation, insurers have had no choice but to move towards a co-insurance arrangement with customers in order to future-proof the cover available.
As per our latest Insurance Consumer Survey, 44.3% of UK pet insurance customers (cat and dog combined) are now choosing a product with co-insurance. This is where customers pay an agreed proportion of the remaining cost of a claim after the excess has been deducted.
Advancing technology has improved the standard of pet care, particularly for surgical procedures and new diagnostic methods such as ultrasound and MRI. However these come with a hefty price tag as new treatments involve expensive equipment and staff with specialized knowledge.
Co-insurance benefits insurance providers by keeping claim costs low, as customers consider the price of treatment options more carefully when they are paying part of the bill. In turn this also benefits customers, as insurers can reward them with lower premiums.
The policy type encourages customers to find the most effective treatment for the lowest price. Making customers focus on value for money instead of just saying yes to a treatment option without any thought of cost will be revolutionary for the pet insurance market. It will influence vet surgeries themselves to reflect upon the affordability of their services, which can only be a win-win situation for providers and buyers of pet insurance.
With 8.3% more dog insurance customers and 4.3% more cat insurance customers being concerned about policy price year on year, co-insurance policies are a no-brainer to keep pet insurance affordable for all.
By Danielle Cripps, General Insurance Analyst