A report by independent financial research company Defaqto has estimated that with 48% of dogs and 69% of cats uninsured in the UK1, the pet insurance sector offers providers a potential £2.5bn in untapped premiums – and therefore offers tangible opportunities for insurers wishing to grow their general insurance product offering.
Data extracted from Defaqto Matrix shows that the average annual cat insurance premium is currently £155.20 and £339.11 for dog insurance – as a result, Defaqto has estimated that the potential premiums offered to providers by uninsured cats and dogs amount to over £1.2bn and £1.3bn respectively.
Defaqto’s report on the pet insurance market, published today, also indicates that the number of pet insurance policies on the market and number of providers operating in the sector has increased significantly since 2008:
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The number of cat insurance policies on the market has grown by 27% over the last three years, from 204 in 2008 to 278 this year
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The volume of dog insurance policies has increased by 29%, from 214 to 300, over the same period
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The number of providers operating in the pet insurance industry has increased by 14% since 2008 – from 74 three years ago to 86 currently
Defaqto’s report highlights the main changes within the pet insurance industry over the past three years, including the trends within some of the key cover elements of pet insurance. It concludes that pet insurance remains an attractive market for providers.
Mike Powell, Defaqto’s Insight Analyst for General Insurance, said:
“Pet insurance still appears to be an attractive market for providers to enter, and offers real opportunities for providers wishing to grow their personal lines offering in terms of untapped premiums. In addition, it is a product area that arguably many see as completing the suite of personal lines offerings, which is evidenced by the growth we have seen in the number of policies available and providers operating in the sector.
“On the flip side, the choice available to consumers in terms of the volume of products and the types of cover available has complicated a product that in reality should be straightforward to market and sell. In terms of taking advantage of the potential within the pet insurance sector, simplicity is the way forward for providers. New entrants should seek to support product launches with consumer education and, given the potential for consumer detriment from providers exiting the market, ensure that they are in the sector for the long haul.”
Defaqto’s report can be viewed by clicking below
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