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UK Pet Insurance Market 2019: Consumer Research Report

  • ID: 4833308
  • Report
  • August 2019
  • Region: United Kingdom
  • 81 Pages
  • IRN Research
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25% of all consumers own pet insurance, while almost half of consumers own a pet, resulting in just under half of pet owners (46%) owning pet insurance. Insurance ownership is significantly higher if the consumer owns a dog or a pedigree cat because pedigree breeds traditionally have more health problems compared with their mixed breed counterparts. Owners with mixed breed dogs also show a high level of insurance ownership because dogs, in general, are the most likely pets to have accidents or get injured in fights. Owners of dogs and cats are the main customer base for pet insurance, especially dog owners: 97% of pet owners with pet insurance own either a dog or a cat.
For almost nine-in-ten pet insurance policyholders their customer journey decision each year is to switch or renew, in other words, they are not first-time buyers (FTBs) of pet insurance in the market. Three-quarters of policyholders renew their policies each year, with just over one-in-ten switching provider and a similar percentage being FTBs, buying their first pet insurance policy.
Pet owners owning cats and dogs, especially pedigree dogs, are the most likely to switch provider, which is related to the fact that these pet owners are likely to be paying the highest premiums, so have the greatest incentive to switch to save money.

When selecting a policy to buy, pet insurance policyholders tend to focus more on the cover on offer rather than the price. They also prefer to buy their cover from well-known branded providers.

Other interesting findings contained in the report are:

  • Most Renewers engage in the same actions as Switchers at the start of their customer journey but with a different final outcome (staying rather than leaving). Failure to find the right cover is likely to play a key role in the decision to stay. A large majority of Renewers search for alternative policies and/or haggle with an incumbent provider to get a better deal before they ultimately decide to renew. Not only do Renewers and Switchers act in similar ways, but both are also spurred into action by the renewal prompt.
  • When starting on a customer journey, pet insurance policyholders focus their initial deal searching on price comparison websites (PCWs) and online resources in general. However, just over one-third finally, purchase a policy via a PCW. More policyholders purchase directly from an insurance provider.
  • Consumers who own pet insurance find the experience satisfying and largely pain free.
  • Most claimants are satisfied with their claims experience because over nine-in-ten claimants had a completely or partially successful outcome to their last claim, and less than one-in-ten found the claims process hard to navigate.
Note: Product cover images may vary from those shown
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1. Executive Summary

  • Key Recommendations
  • A market worth over £1 billion
  • And expected to top £2 billion by 2023
  • A market controlled by three big players
  • A market with growth potential - less than half of pet owners have insurance
  • Most pet owners take out standalone insurance and pay for it monthly.
  • Risk aversion and confidence help drive insurance uptake
  • Insured pet owners show a preference for an online customer journey
  • For most insurance owners the ultimate choice is to renew or switch
  • But Renewers are Switchers who can’t find a better deal, especially better cover
  • The journey starts online
  • But the journey may not end there
  • As a group, policyholders focus on cover rather than price and like a leading brand
  • Don’t assume a focus on cover or brands means the price is unimportant
  • Negotiations likely to centre on broad policy features
  • Being a policyholder is a good experience
  • 16% of policyholders claim, and when they do the process seems to go smoothly
  • One-quarter are thinking of switching in the next year

2. Introduction

3. Profile Of The Insured Pet Owner

  • Around half of people have a pet, but only half of pet owners are insured
  • Middle class dog owners the most likely to be insured
  • Three types of pet owner
  • Dog and cat owners the most likely to be insured
  • Pet insurance policyholders tend to own standalone policies and pay for them annually
  • Sometimes insurance is not enough

4. How Pet Owners Approach Insurance

  • Risk aversion encourages insurance ownership
  • Giving consumers the ability to self-select insurance with confidence boosts uptake
  • Better offline support and buying options may help

5. The Customer Journey Begins

  • Online buyers the most likely to switch or enter the market
  • Pedigree dog owners the most likely to switch
  • Renewers and Switchers: different outcome but the same approach
  • And both Switchers and Renewers are spurred into action by the renewal prompt
  • Price comparison websites start the search
  • PCWs will lead next year’s policy search
  • PCWs serve up the required information in an easy to use format
  • Policyholders prefer the direct route to purchasing

6. Price, Cover Or Brand

  • Online buyers are more price focused
  • Policyholders who like well-known brands buy direct
  • Agile Renewers who own Dogs and Cats an easier sell for major brands
  • But don’t assume Cover First or Brand First means price does not matter at all
  • Negotiations likely to centre on broad policy features
  • And they need their information delivered in a concise manner

7. Being A Policyholder

  • Insurance providers are meeting their customer’s expectations
  • Policy management is moving online
  • Almost one-in-five policyholders have claimed in the past year
  • Claimants are happy with the process

8. Ending The Journey: Customer Loyalty And Switching

  • One-quarter of policyholders are thinking of switching in the next year
  • Age, gender and social grade influence switching behaviour
  • Mixed breed owners the most likely to be thinking of switching
  • Switching is price led

9. Market Size And Trends

  • The pet population declines
  • But still a large pool of dogs and cats
  • Growing cost of paying for veterinary services
  • A market worth around £1.3 billion
  • Three big players
  • The market breaks the £2 billion mark in 2023

List of Figures
Figure 1 The structure of pet and insurance ownership
Figure 2 The profile of pet owners by their ownership of pet insurance
Figure 3 The type of pet owner
Figure 4 Percentage of pet owners with insurance by pet owned
Figure 5 The types of pet insurance policies owned and how they are paid for
Figure 6 Do pet owners own pet plans?
Figure 7 The percentage of consumers who are risk averse
Figure 8 The percentage of pet owners who are confident and self-reliant insurance buyers
Figure 9 The desire for an online customer journey by type of pet owner and insurance owned
Figure 10 Policy acquisition and time with current provider and actions over the past year
Figure 11 The demographic profile of policyholders by actions taken in the past year
Figure 12 The pet ownership of insured pet owners by actions taken in the past year
Figure 13 The negotiating activities of cover holders who renew at renewal time
Figure 14 Actions taken by awareness of previous year’s premium
Figure 15 Resources consulted over the past two years by action taken in last year
Figure 16 Where pet insurance policyholders would look to compare deals
Figure 17 Policyholder attitudes towards PCWs
Figure 18 From where the last pet insurance policy was purchased
Figure 19 The importance of cover vs price when buying pet insurance*
Figure 20 The importance of brands when buying pet insurance*
Figure 21 The brand and price focus of policyholders by key characteristics*
Figure 22 Negotiation with the insurer when taking out a new policy or renewing*
Figure 23 How policyholders read and understand their policy documents
Figure 24 Why policy documentation is not read in full
Figure 25 Policyholder experience owning a pet insurance policy
Figure 26 The access to and use of online portals
Figure 27 The profile of pet owners by making a claim in the past year by pet owned
Figure 28 Claimant opinion of their last pet insurance claim
Figure 29 The characteristics of policyholders by whether they are thinking of switching in the coming year
Figure 30 The profile of policyholders by whether they are thinking of switching in the coming year
Figure 31 The pet ownership profile of insured pet owners by whether they are thinking of switching
Figure 32 The factors that caused policyholders to switch provider
Figure 33 The UK pet* population (million)
Figure 34 The composition of the pet population and trends in numbers
Figure 35 The UK population of cats and dogs, 2010-11 to 2018-19*
Figure 36 Consumer spending on veterinary services, 2010-2018
Figure 37 Spending on veterinary services per pet owned in the UK
Figure 38 The pet insurance market (GWP), 2013-2018
Figure 39 Forecast of the pet insurance market (GWP), 2018-2023

Note: Product cover images may vary from those shown
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