UK Pet Insurance: Market Dynamics and Opportunities 2016

UK Pet Insurance: Market Dynamics and Opportunities 2016


  • Products Id :- VF0018IA
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  • Pages: 34
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Executive Summary

2015 saw the UK pet insurance market continue to grow, with gross written premiums (GWP) increasing by 6.3% from POUND 853m in 2014 to POUND 910m in 2015. Medical inflation remains the underlying factor driving GWP, with the quality of medical treatments and veterinary procedures influencing cost greatly and sparking inflationary pressure. Product penetration has also grown, with the number of policy subscribers continuing its upward trend from 2012 to reach 3.4 million-an increase of 8.7% from 2014. The market has been battling to increase product take-up and is vying to maintain distribution output by increasing the availability of policies on direct propositions and price comparison sites. Aggregators still serve the pet space, but while many of the smaller providers continue to place more of their business onto these platforms, the major players are still refraining from using price comparison sites as a means of product distribution-with good reason.

Key Findings

Medical costs and pet care continue to influence the cost of claims significantly, and as a result encourage insurers to raise the price of their premiums.

The pet insurance market is expected to break the POUND 1bn mark for the first time in 2016 as insurers continue to battle rising costs.

Pet insurance is not well served on price comparison sites and is not typically viewed by customers as a "commodity"-more care and attention is required before purchasing.

Much of the available data with regards to the UK pet population and pet ownership suggests dogs now lead the way over cats, after the roles were reversed in 2014.

Synopsis

Verdict Financial's "UK Pet Insurance: Market Dynamics and Opportunities 2016" report provides in-depth analysis of the UK pet insurance market. Among the points discussed include how the pet insurance market continued on an upward trend in 2015. GWP grew in line with the increase in product penetration and number of policy holders, but at the same time the market was blighted by significant increases in the number of reported claims, which grew to record levels in 2015. The ongoing growth in overall market GWP has been driven by a combination of both the response to a tough claims environment through rising premiums and policy volume, as insurers look to improve returns and generate better business. The report also provides a thorough overview of the external factors driving the market, along with future forecasts.

Reasons To Buy

Benchmark yourself against the rest of the market. Ensure you remain competitive as new innovations and significant market developments occur.

Be informed of how insurers are faring amid the increasing cost of claims in the face of developments in pet care and advancing medical treatments.



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EXECUTIVE SUMMARY

The UK pet insurance market continues to grow amid the rising cost of claims

Key findings

Critical success factors

THE PET INSURANCE MARKET

UK pet insurance continues to grow, but claims are having a damaging effect

Claims inflation continues to challenge GWP growth in the pet space

Pet insurance GWP grew 6.7% to POUND 910.1m in 2015

Advances in medical treatments continue to drive claims costs

Insurer losses in the pet insurance market increased significantly in 2015

The UK pet population has fallen from 2014

Dog ownership is now higher than cat ownership

Compulsory micro chipping is shaping the way owners track and monitor their dogs

Northern Ireland has the highest dog count in the UK at over one third of the population

Pet insurance take-up increased significantly from 2014

Take-up was spurred by the need to avoid heavy vet bills and access better treatment

Customers are leaning more towards lifetime policies

ECONOMIC CONDITIONS AND DYNAMICS OF THE MARKET

Costly vet treatments are encouraging insurers to take control of the market

RSA aims to manage the cost of pet insurance with the launch of a new scheme

Insurers must work closer with vet practices to have better control of costs

Pricing needs to be more transparent for pet insurance customers

The corporatization of the pet space and a lack of skills are contributing to price increases

Pet insurance is seen as a low-ticket item but does not fit the aggregator mold

Price comparison sites fail to serve the pet space as they do other personal lines

Lifetime policies are the main attraction for customers

Co-insurance is coming back into fashion and is set to become a mainstream product

DEVELOPMENTS IN 2016 AND BEYOND

Claims inflation will continue to drive rates over the coming years

The UK pet space is forecast to top POUND 1bn within the next three years

Insurers need to simplify their products, with Bought By Many leading by example

Social media continues to provide a good route for providers to target the uninsured

APPENDIX

Abbreviations and acronyms

Definitions

Gross premium

Premium income gross of reinsurance premium ceded.

Gross loss ratio

Written premiums

Methodology

Primary and secondary research

Verdict Financial's 2015 General Insurance Consumer Survey

Bibliography

Further reading

About Verdict Financial

Disclaimer

Figure 1: 2015 saw GWP fall by 6.7% to POUND 910.1m

Figure 2: Insurer gross claims incurred grew by almost 10% from 2014

Figure 3: The number of claims reported continues on an upward trend

Figure 4: Average claims costs continue to rise, but at a more steady rate

Figure 5: In 2015 the pet insurance gross loss ratio reached its highest level in five years

Figure 6: The percentage of UK dog owners is now marginally greater than cat owners

Figure 7: Dog owners outstrip the number of cat owners according to the PFMA

Figure 8: The number of pet insurance policy holders now tops 3.3 million

Figure 9: Vet costs around the country

Figure 10: UK pet insurance GWP is expected to hit POUND 1bn in 2018

Figure 11: Bought By Many contains a range of pet options and utilizes social media platforms

Table 1: UK pet insurance market GWP, 2011-15

Table 2: UK pet insurance market gross claims incurred, 2011-15

Table 3: UK pet insurance market claims notified, 2011-15

Table 4: Average claims costs in the UK pet insurance market, 2011-15

Table 5: Top 10 conditions for claims in the UK pet insurance market, 2016

Table 6: Top 10 most expensive claims in the UK pet insurance market, 2016

Table 7: Dog and cat ownership by geographical region, 2015

Table 8: UK pet insurance market GWP forecast, 2015-20f

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Pet, GWP, COR, premium, claim, medical, cost, aggregator, dog, cat, population, subscriber, treatment

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