UK General Insurance Regulations, UK Pet Insurance Industry - Ken Research
In
2016, it was estimated that around 40% of the households in UK have pets and
the total pet population stands at around 57 million of which the dog
population is 8.5 million and cat population is 7.5 million. Now-a-days, more
and more pet owners are opting for insurance. This is mainly due to increase in
vet bills. Pet insurance is designed to cover medical expenses if the insured
pet falls ill or is injured in an accident. Most products cater for cats and
dogs, although there are policies available for rabbits, horses/ponies and more
exotic pets also. The pet insurance market is currently experiencing strong
growth as there is huge untapped market potential but at the same time it is
also facing difficulties due to medical inflation and accelerating premiums.
UK
has nearly as many pets as people so unexpected visits to the vet is very
common. In fact, the veterinary costs are almost one third of the total
household spending on pets. This is also accompanied by advances in veterinary
care which in turn increase the cost of treatments. Due to this, more number of
pet owners is taking insurance. Also, improved awareness amongst people about
the benefits of insurance has further assisted the growth of this market.
According to a report announced by Ken Research titled “UK Pet
Insurance: Market Dynamics and Opportunities 2016”, there has been a rise in the product penetration
with an increase in the number of policy subscribers. The dog insurance market
is three times the size of the cat market and about one third of cats and half
of dogs are insured. Still around 56% of the pet owners are uninsured creating
huge market potential for new and existing player.
The
market also faces certain challenges. Medical inflation and increase in
veterinary costs have made it difficult for the insurers to maintain a margin
due to increase in the cost of claims. This increased pressure on the insurers
is being passed on to the pet owners in terms of higher premiums. It has also
raised questions on the quality of insurance provided. Some pet owners also
find the different levels of cover confusing.
Despite
the challenges, the pet insurers have well-established distribution networks.
Though many pet owners prefer to get in touch with the insurer directly but
there are a significant number of people who value convenience, are seeking
alternative channels to obtain their policies. Moreover, the retail providers
are the second most popular channel of distribution for pet insurance. This can
be attributed to increase spending in marketing and advertising. The insurers
are trying to boost product take up by making their product available on different
propositions and price comparison sites. Use of online platforms to spread
awareness and better reach their target segment has helped them in making their
products easily available and offer simple online purchasing solutions. Due to the growth of online media, there has
been an increase in the number of small players leading to increased
competition. Although it has been observed that pet insurance are not well
served on price comparison sites as it is not seen by the customers as a
commodity. Due to this reason, major players are still refraining from using
these price comparison sites as a means of product distribution.
Pet
insurance appears as an attractive market with lot of opportunities but they
also struggle in terms of increasing premiums and complexity of their products.
Hence, the insurers need to focus on providing simpler and more attractive
packages which also ensures quality at a reasonable price. They need to educate
the customers about the different cover levels and maintain transparency in
terms of pricing and terms and conditions of the policy. They need to provide
value to the customers. This will help the customer in making an informed
decision which will definitely lead to better satisfaction. Also, the insurers
need to work closely with the vet practices to have better control of costs. If
taken care of, the above mentioned points can help new entrants and existing
players benefit for a long period of time. Some of the players in the pet
insurance market are Tesco Bank, M&S Bank, Aviva, Pinnacle, Pet Plan, John
Lewis Finance Pet Insurance, Sainsbury’s Bank etc.
Key Topics Covered in the Report:
Non-Life
Insurance Industry Denmark
UK
Insurance Sector Outlook
UK
Non- Life Insurance Market Research
Non-Life
Insurance Sector Trends UK
UK
General Insurance Regulations
UK
Pet Insurance Market Size
UK
Pet Insurance Market Research
UK
Pet Insurance Sector
UK
Pet Insurance Industry
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Ken
Research
Ankur
Gupta, Head Marketing & Communications
+91-9015378249
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