There is substantial room for growth in the UK pet insurance market, as many pets remain uninsured despite pet owners regarding their furry friends as another member of their family.
According to GlobalData’s UK Pet Insurance: Market Dynamics and Opportunities 2019, total gross written premiums (GWP) in the UK pet insurance space reached £1.2bn by the end of 2018, recording a CAGR of 8.6% since 2013. The pets most commonly insured are dogs and cats, but the Association of British Insurers estimates that the vast majority of these two types of pets are uninsured.
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The situation is comparable elsewhere in the world. In fact, pet insurance uptake is lower in the US, where estimates released by the North American Pet Health Insurance Association suggest that just 2% of around 85 million pet owners hold pet insurance policies. In a move to capitalise on this potential opportunity, US-based MetLife announced it will be acquiring pet insurance provider PetFirst Healthcare.
With the acquisition, MetLife will be able to diversify its insurance products and enter the US pet insurance space. According to MetLife, the country’s pet insurance market is growing strongly, having registered annual growth rates higher than 20% since 2014.
Indeed, owners are increasingly willing to take out insurance policies to cover their pets and protect themselves against unexpected vet bills in the event that their animal falls ill or is injured. Findings from GlobalData’s report suggest that pet insurance premiums in the UK increased 22% between 2013 and 2018, with the average premium standing at £279 in 2018 (although this varies substantially by type of pet).
However, insurers trying to make the most of an improving pet insurance market will face several challenges. A few players tend to dominate the landscape on a country-to-country level, making it vital to differentiate a brand from the competition. Additionally, the cost of claims is rising. While this can partly be passed on to pet owners, a rise in insurance premiums may prompt policyholders to reassess their options.
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By GlobalData
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