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Pet Insurance - UK - August 2017

Published By :

Mintel

Published Date : Aug 2017

Category :

Insurance

No. of Pages : N/A

The fall in subscriber growth in 2016 shows there are challenges to overcome in pet insurance. However, most pet owners don’t have insurance, so there are plenty of opportunities to expand the market. As long as premiums can be kept at a reasonable level, and the benefits of policies are effectively marketed, pet owners’ fondness for their animals will mean pet insurance continues to grow into the future.

Table of contents

OVERVIEW
What you need to know
Products covered in this report
EXECUTIVE SUMMARY
The market
GWP topped £1 billion in 2016 and is forecast for further growth
Figure 1: Forecast of pet insurance gross written premiums – Fan chart, 2012-22
Sharp rise in average premiums counteracts slow subscriber growth
Figure 2: Average pet insurance premium (based on exposure), by type of pet, 2012-16
The average pet claim is over £750
Figure 3: Value of gross pet insurance claims incurred and average pet insurance claims, 2013-16
Companies and brands
Petplan is the UK’s largest pet insurer
Figure 4: Pet insurance providers currently used by consumers, May 2017
Figure 5: Type of pet insurance provider used by consumers, May 2017
Subscriptions and monitoring kits open new opportunities
Above-the-line advertising spend increased to £6.7 million in 2016/17
Figure 6: Total above-the line, online display and direct mail advertising expenditure on pet insurance, 2012/13-2016/17
The consumer
Half of households have a cat or dog
Figure 7: Ownership of pets, May 2017
Growth of pet insurance penetration has stalled
Figure 8: Pet insurance ownership, 2014-17
72% of policyholders have a lifetime policy
Figure 9: Type of pet insurance policy held, May 2017
Pet policyholders look for value, not just the cheapest option
Figure 10: Factors considered when choosing a pet insurance policy, May 2017
Policyholders are generally confident that their insurance is sufficient
Figure 11: Attitudes towards pet insurance, May 2017
What we think
ISSUES AND INSIGHTS
Growth in pet insurance has slipped
The facts
The implications
Price will come under greater scrutiny as household finances are squeezed
The facts
The implications
Monitoring kits set for growth
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
GWP topped £1 billion in 2016 and is forecast for further growth
Sharp rise in average premiums counteracted slow subscriber growth
There are over 16 million cats and dogs in the UK
The average pet claim is over £750
MARKET SIZE AND FORECAST
Pet insurance was valued at over £1 billion for the first time in 2016
Policyholders face pressure from rising average premiums and inflation
Figure 12: Size of the pet insurance market, by gross written premiums, 2013-17
Figure 13: Size of the pet insurance market, by exposure years, number of subscribers and gross written premiums, 2012-16
Premiums forecast for further growth
Figure 14: Forecast of pet insurance gross written premiums – Fan chart, 2012-22
Figure 15: Forecast of pet insurance gross written premiums, at current and constant prices, 2012-22
Forecast methodology
MARKET SEGMENTATION
Growth in the number of subscribers fell in 2016
Figure 16: Number of pet insurance policy subscribers, by type of pet, 2012-16
Multi-pet policies have fallen in popularity
Figure 17: Exposure to subscriber ratio, by type of pet (cat and dog only), 2012-16
Dog policies account for three quarters of pet insurance GWP
Figure 18: Pet insurance gross written premiums, by type of pet, 2012-16
Sharp rise in premiums
Figure 19: Average pet insurance premium (based on exposure), by type of pet, 2012-16
MARKET DRIVERS
There are over 16 million cats and dogs in the UK
Figure 20: Size of UK pet population, 2016/17
Spending on pets is increasing
Figure 21: Average weekly household spending on pets – UK, by category, 2013-16
The average pet claim is over £750
Figure 22: Value and volume of pet insurance claims incurred, claims ratio and average claim value, 2012-16
Tax rises put further pressure on premiums
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Petplan is the UK’s largest pet insurer
Subscriptions and monitoring kits open new opportunities
Above-the-line advertising spend increased to £6.7 million in 2016/17
PET INSURANCE PROVIDERS
Petplan is the UK’s largest pet insurer
Figure 23: Pet insurance provider, May 2017
Consumers prefer to use pet specialists
Figure 24: Type of pet insurer, May 2017
A congested market
COMPETITIVE STRATEGIES
MORE TH>N’s DOGGYSSENTI>LS brings insurance and pet care together
Monitoring kits to hit the mainstream
Price is key but brand retains a huge influence
Lower value policies could be set for growth
Bought By Many enters the market with cover for pre-existing conditions
John Lewis chooses not to apply penalty fee for vet referrals
ADVERTISING AND MARKETING ACTIVITY
Above-the-line advertising expenditure increased in the last year
Figure 25: Total above-the line, online display and direct mail advertising expenditure on pet insurance, 2012/13-2016/17
Petplan accounts for almost half of adspend
Figure 26: Top 10 pet insurance advertisers using above-the-line, online display and direct mail channels, 2016/17
TV is the dominant advertising channel
Figure 27: Total above-the line, online display and direct mail advertising expenditure on pet insurance, by media type, 2016/17
Nielsen Ad Intel coverage
THE CONSUMER – WHAT YOU NEED TO KNOW
Half of households have a cat or dog
Growth of pet insurance penetration has stalled
72% of policyholders have a lifetime policy
Pet policyholders look for value, not just the cheapest option
Policyholders are generally confident that their insurance is sufficient
PET OWNERSHIP
Half of households have a cat or dog
Figure 28: Ownership of pets, May 2017
Families are more likely to have pets
Figure 29: Ownership of pets, by whether respondent has children aged under-18, May 2017
PENETRATION OF PET INSURANCE
Growth of pet insurance penetration has stalled
Figure 30: Pet insurance ownership, 2014-17
Dog owners are most likely to have insurance
Figure 31: Penetration of pet insurance, by type of pet, May 2017
Cost is a major barrier to ownership
Figure 32: Penetration of cat and dog insurance, by annual household income, May 2017
LEVEL OF COVER HELD
Mid-level cover is the most popular policy type
Figure 33: Type of pet policy held, May 2017
Low-cover policies are unpopular
Retailers are used for cheaper cover
Figure 34: Type of policy held, by type of pet insurance provider, May 2017
IMPORTANT FACTORS IN CHOOSING A POLICY
Value is key
Figure 35: Factors considered when choosing a pet insurance policy, May 2017
Prior relationships with providers have limited influence
…but general insurance customers are more open to cross-selling
Figure 36: Choice of “Previous experience of using the provider for another type of insurance”, by type of pet insurer, May 2017
Choice of vet is important to high-level policyholders
Figure 37: Choice of “Being able to choose which vet to use for treatment”, by type of pet policy held, May 2017
ATTITUDES TOWARDS PET INSURANCE
Policyholders are generally confident that their insurance is sufficient
Figure 38: Attitudes towards pet insurance, May 2017
Pet experts hold authority over other insurers
Monitoring kits appeal to younger pet owners and those with high-level cover
Figure 39: Response to the statement “I would like to use an activity monitoring kit to help track my pet’s level of exercise (eg a step counter)”, by age, May 2017
Most would pay more for higher cover, including pre-existing conditions
Figure 40: Response to the statement “I would be willing to pay more to switch to a provider that offers cover for pre-existing conditions”, by type of pet policy held, May 2016
APPENDIX – DISTRIBUTOR/UNDERWRITER RELATIONSHIPS
Figure 41: Selected providers of pet insurance and their underwriting partners, July 2017
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Figure 42: Forecast of value of gross written pet insurance premiums, 2017-22
Forecast methodology

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