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UK Pet Insurance: Market Dynamics and Opportunities 2017

  • Executive Summary
    • UK pet insurance continues to grow amid rising claims costs
    • Key findings
    • Critical success factors
  • The Pet Insurance Market
    • UK pet insurance broke through the £1bn mark, but claims are outgrowing premiums
      • Insurers are facing an increasingly saturated market
    • Claims inflation continues to challenge GWP growth in the pet space
      • Pet insurance GWP grew 7.1% to £1,045m in 2016
        • Table Figure 1: 2016 saw GWP break the £1bn mark
        • Table Pet insurance GWP in the UK
      • Advances in medical treatments continue to drive claims costs
      • Vet salaries falling despite fees increasing highlights the squeeze on profits
        • Table Figure 2: Claims incurred growth remained strong in 2016
        • Table UK pet insurance market gross claims incurred, 2012–16
        • Table Figure 3: Number of claims notified growth slowed in 2016
        • Table UK pet insurance market claims notified, 2012–16
        • Table Figure 4: The cost of the average claim continued to rise in 2016
        • Table Average claims costs in the UK pet insurance market, 2012–16
        • Table Top 10 conditions for claims in the UK pet insurance market, 2016
        • Table Top 10 most expensive claims in the UK pet insurance market, 2016
      • Insurer losses continue gradual ascent as profit margins tighten
        • Table Figure 5: Gross claims incurred as a proportion of GWP grew slightly in 2016
    • The UK pet population has fallen every year since 2013
      • Dog ownership remains higher than cat ownership
        • Table Figure 6: More households own dogs than cats, but both are decreasing
        • Table Figure 7: Dogs remain more popular than cats
      • Lifestyle is key to explaining choice of pet
      • Compulsory microchipping is shaping the way owners track and monitor their dogs
      • Northern Ireland has the highest dog count in the UK, with 33% of the population owning dogs
        • Table Dog and cat ownership by geographical region, 2016
      • Online aggregators have pushed consumers towards lifetime policies
  • Competitors
    • The top two insurers account for over 70% of the market
      • Allianz and RSA continue to dominate the UK pet insurance market
        • Table Figure 8: Allianz is the largest pet insurer with 43.7% of the market
      • CVS launches own-brand pet insurance
      • Allianz merges with LV
      • More Than Doggyssentials
      • Markerstudy launches pet insurance aggregator
      • More Than's Vetfone
      • E&L's co-insurance pick `n' mix policy
  • 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
      • Pricing needs to be more transparent for pet insurance customers
        • Table Figure 9: Vet costs around the country
      • Insurtech is slowly entering the pet sector with new providers, aggregators, and apps
      • Co-insurance is coming back into fashion and is set to become a mainstream product
      • Bought By Many leads the way in product innovation
  • Developments in 2017 and Beyond
    • Claims inflation will continue to drive rates over the coming years
      • The UK pet space is forecast to maintain double-digit growth
        • Table UK pet insurance market GWP forecast, 2016–20f
      • Pet insurance as an employee benefit is likely to emerge after success in the US
        • Table Figure 10: Bought By Many offers a range of pet options and utilizes social media platforms
      • Social media continues to provide a good route for providers to target the uninsured
      • Humanizing pets and treating them as part of the family is essential to appeal to consumers
  • Appendix
    • Abbreviations and acronyms
    • Bibliography
    • Further reading
  • About GlobalData

UK Pet Insurance: Market Dynamics and Opportunities 2017

Summary

United Kingdom pet insurance market has continued to see significant growth, with gross written premiums (GWP) increasing by 7.1% in 2016. Medical inflation remains the underlying factor driving GWP upwards, with technologically improved quality of treatments and procedures being applied more commonly and driving inflationary pressure on claims costs. This has resulted in claims incurred figures outgrowing GWP, with a 7.4% increase in 2016.

Product penetration has also risen, but at a considerably slower rate than GWP or claims incurred, with the number of subscribers increasing by just 2.0%, to reach 3.4 million in 2016.

Key findings include in this report -

  • The pet insurance market broke the £1bn mark in GWP for the first time in 2016 as insurers continue to battle rising medical costs.
  • Having previously been under-represented on price comparison sites, many pet providers now see them as a crucial distribution channel.
  • Available data with regards to the UK pet population and pet ownership suggests dogs still lead the way over cats.
  • Insurtech is entering the market with Fitbit-style technology, a range of apps, and innovative comparison sites beginning to emerge.
Pet insurance market continued on an upward trend with regards to market size in 2016. Strong growth in GWP was seen yet again, but the market remains blighted by significant increases in the number of reported claims, which grew to record levels. The ongoing growth in GWP has been driven by the response to a tough claims environment with rising prices, as insurers look to improve returns and generate better business. The greatest issue facing this market is that insurers cannot continue raising premiums by almost 10% every year without driving customers away.

Market leader Petplan still avoids comparison sites, but has a window to them through its subsidiary, Sainsbury’s Pet Insurance. Aggregators are essential for smaller companies, both to foster brand awareness and because being absent from them can be viewed as suspicious by consumers.

The report UK Pet Insurance: Market Dynamics and Opportunities 2017 analyzes the UK pet insurance market, looking at market size as well as changes in premiums, claims, medical costs, pet ownership, regulations, and opportunities. It discusses the leading competitors, how the market is likely to change due to rising costs and emerging technology, and provides future forecasts of market size up to 2021.

Companies mentioned in this report: RSA, Aviva, NFU Mutual, LV=, Allianz, Petplan, Bought By Many, Direct Line, E&L, BNP Paribas.

Scope
  • The pet insurance market broke the £1bn mark in GWP for the first time in 2016 as insurers continue to battle rising medical costs.
  • Having previously been under-represented on price comparison sites, many pet providers now see them as a crucial distribution channel.
  • Insurtech is entering the market with Fitbit-style technology, a range of apps, and innovative comparison sites beginning to emerge.
Reasons to buy
  • Keep up to date with the new trends and innovations in the market.
  • Benchmark yourself against competitors.
  • Learn about growth in all aspects of the market, what is driving it, and whether it looks set to continue.


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