The UK is renowned as a nation of dog and cat lovers, yet according to the Association of British Insurers (ABI), of the 17 million dogs and cats owned by households in the UK, only 3.9 million are covered by pet insurance – equating to just 25% of dogs and 15% of cats.
This low penetration represents significant opportunities within the pet insurance sector which grew by 11.8% in 2014 (according to Timetric) driven by increases in the cost of veterinary treatment and improved public awareness of the benefits of cover. Several insurers have been testing the water in this sector, which is expected to reach £1.1billion by 2019 (Timetric).
May 2016 saw the launch of a new price comparison site focused purely on pet insurance, enabling insurers and distributors to promote their products in a pet specialist environment. The provision of pet insurance, however, does not come without its risks. The costs faced by insurers are high.
According to figures published by the ABI in March 2016, pet insurers paid out a record £657 million in claims in 2015 – the equivalent of £1.8 million every day - to help the UK’s pet owners cope with the unexpected costs of owning their pet. Most of the claims were for veterinary bills.
ABI figures show that in 2015:
- The number and cost of claims reached record levels: 911,000 pet insurance claims were made, up 9% on 2014.
- The average claim was £720, while the average pet insurance premium was £241.
- Pet insurers dealt with 686,000 claims for dogs, up 11% on 2014, costing £501million (up 12%). For cats, 193,000 claims were handled, worth £105 million – a rise of 6% and 12% respectively.
