UK Pet Insurance: Market Dynamics and Opportunities 2019

This report analyzes the UK pet insurance market, looking at market size as well as changes in premiums, claims, medical costs, and pet ownership. It discusses competitors in the market, explores how the market is likely to change due to rising costs and emerging technology, identifies opportunities in the pet insurance space, and provides future forecasts of market size up to 2023.

The UK pet insurance market experienced a flat year in 2018, with total market gross written premiums (GWP) of £1,193m – an increase of just 0.3% compared to 2017. The number of pet insurance policyholders shrunk in 2018, and the average pet insurance premium dropped for the first time in eight years.

The pet insurance market is dominated by a few key players that are likely to maintain their position in the coming years. The main concern for insurers will be rising claims costs, with both gross claims cost and average claims cost steadily increasing over the past five years. And this trend is expected to continue going forward. Increasing rates of obesity among pets is a key concern, and insurers need to encourage owners to provide a healthy lifestyle for their pets in order to tackle the rising costs they face.

Scope

– Dog insurance represents the largest proportion of the total pet insurance market, accounting for 75% of GWP. Cat insurance only accounts for 18% of GWP even though the UK’s dog and cat populations are comparable.

– The average cost of a dog and cat claim are £798 and £632 respectively. Claims costs for other pets are notably higher.

– Petplan was the largest pet insurer in the UK in 2018 with a 35.5% share of GWP.

Reasons to buy

– Keep up to date with the new trends and innovations in the pet insurance market.

– Benchmark yourself against competitors.

– Learn about growth in all aspects of the market, what is driving it, and whether it is set to continue.

Companies mentioned

Petplan

Animal Friends

Tesco Bank

More Than

Sainsbury’s Bank

Red Sands

Allianz

RSA

Aviva

U K Insurance

Bought By Many

Waggel

Vitality

PitPat

Table of Contents

Table of Contents

1. EXECUTIVE SUMMARY

1.1. Pet insurance growth faltered in 2018 but is expected to pick back up

1.2. Key findings

1.3. Critical success factors

2. PET INSURANCE MARKET DYNAMICS

2.1. The UK pet insurance market stagnated in 2018

2.1.1. The number of pet insurance policyholders fell in 2018

2.1.2. GWP is dominated by dog insurance

2.1.3. Average premiums vary by type of pet

2.2. The gross cost of claims continues on an upward trend despite a fall in frequency

2.2.1. The number of claims notified fell for the first time in five years

2.2.2. Gross claims in the pet insurance market saw minimal growth

2.2.3. Technology is a double-edged sword

2.2.4. Veterinary salaries have had little impact on the cost of claims, but this will change

2.2.5. The average claim varies considerably depending on the type of pet

2.3. Summary of the current market by product

2.4. The proportion of UK households with pets has decreased

2.4.1. The number of dogs remained the same, but the number of cats decreased

2.4.2. The size of the potential pet insurance market is almost four times its current value

2.4.3. Obesity within the UK pet population is an increasing problem

3. COMPETITOR DYNAMICS

3.1. The structure of the UK pet insurance market

3.1.1. Allianz, RSA, and Red Sands are the largest underwriters in the market

3.1.2. The top three providers have very similar offerings

3.1.3. Bought By Many is bringing innovation to the market

3.1.4. Waggel takes pet insurance fully digital

3.2. The leading players have the greatest marketing expenditure

4. THE MARKET GOING FORWARD

4.1. The market is set to continue growing

4.1.1. Total market GWP is forecast to reach £1.7bn in 2022

4.1.2. Policy numbers will continue rising

4.2. The cost of claims will continue to increase

4.2.1. Dog insurance claims are forecast to increase through to 2023

4.2.2. The average cost of a cat insurance claim is expected to rise

4.2.3. The number of claims is expected to fall in the other pet segment

4.3. Reducing costs will be key for pet insurers

4.3.1. Pet insurers should replicate innovation seen in the private medical insurance market

4.3.2. Blockchain can reduce costs and improve the customer experience

4.4. Different avenues could be utilized to increase product uptake

4.4.1. Pet insurance in the US is becoming an increasingly popular employee benefit

4.4.2. Social media could allow insurers to target digital-savvy individuals and educate pet owners

5. APPENDIX

5.1. Abbreviations and acronyms

5.2. Methodology

5.2.1. Competitor rankings

5.2.2. 2018 UK Insurance Consumer Survey

5.2.3. Forecasting methodology

5.3. Secondary sources

5.4. Further reading

List of Tables

List of Tables

Table 1: UK pet insurance market GWP, 2013-18

Table 2: The claims landscape in the pet insurance market, 2013-18

Table 3: Average claims cost by pet, 2013-18

Table 4: Breakdown of the pet insurance market by product, 2018

Table 5: Petplan’s pet insurance products

Table 6: Animal Friends’ pet insurance products

Table 7: Tesco Bank’s pet insurance products

Table 8: The split of the pet insurance market, 2018-23f

Table 9: Forecasted number of pet insurance policyholders by pet type, 2018-23f

Table 10: The cost and number of claims within the total pet insurance market, 2018-23f

Table 11: The cost and number of claims within the dog insurance market, 2018-23f

Table 12: The cost and number of claims within the cat insurance market, 2018-23f

Table 13: The cost and number of claims within the other pet insurance market, 2018-23f

List of Figures

List of Figures

Figure 1: GWP growth in the UK pet insurance market was almost non-existent in 2018

Figure 2: The number of policyholders in the pet insurance market fell in 2018

Figure 3: The majority of pet insurance policyholders have dog insurance

Figure 4: Dog insurance dominates the market

Figure 5: Average premiums for dogs and cats have been on an upward trend since 2013

Figure 6: There were fewer pet claims in 2018 than in 2017

Figure 7: The cost of claims has increased by £262m since 2013

Figure 8: Average claim cost is lowest for cats

Figure 9: There is considerable potential for growth throughout the pet market

Figure 10: Owners are open to using technology to monitor their pets

Figure 11: Allianz underwrites more than twice as much in premiums as any other competitor

Figure 12: Allianz also underwrites the greatest number of contracts

Figure 13: More Than spends over twice as much as its nearest rival on marketing

Figure 14: The market will exceed £1.5bn in GWP in 2023

Figure 15: There will be over 4 million pet policyholders by 2022

Figure 16: The total cost of claims will continue rising

Figure 17: Dog insurance claims will cost the industry over £750m in 2023

Figure 18: The average cat claim will cost insurers £731 in 2023

Figure 19: The average cost of other pet claims will rise despite a decreasing number of claims

Figure 20: Forecasting methodology

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