As of 2023, there were 12 million dogs recorded as pets in the UK. The cost of owning a dog is on a relentless rise, presenting a significant challenge for both pet owners and insurers. Dubbed "dogflation”, this trend highlights the increasing expenses related to pet care, including veterinary treatments, pet food and insurance premiums. Although pet owners experienced a reduction in their insurance premium in March of this year, it remains 20% higher than the previous year. We set out to discuss the effect of dogflation on the pet insurance industry and how CRIF solutions can assist insurers in providing more competitive premiums while retaining existing clients.
Understanding the Factors Behind Pet Insurance Inflation
Dogs Trust, the UK's largest Dog Welfare Charity, estimated a "dogflation" rate of 9%, against 4% inflation generally in the UK. The escalating costs of veterinary treatments contribute significantly to the rising premiums in the pet insurance industry. Veterinary expenses have risen substantially over the last few years, so much so that the Competition and Markets Authority (CMA) have opened an investigation into the industry to discover why vet bills have increased more than any other goods or services. Possible reasons could be higher fixed costs for businesses but also a higher demand for qualified vets in the UK.
Also, pet food has been increasing in recent years and is due to rise in the future looking at Statista’s report on the average pet food price in the UK between 2018-2028. Since pet food is currently in the 20% VAT bracket, organisations and members of parliament have proposed to temporarily cut the VAT on pet food to alleviate pressure during these difficult times.
What Are the Most Expensive Breeds in the UK?
The Insurance Emporium has carried out research and identified the top 5 dog breeds in 2024 that are less affordable to buy and look after:
