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UK Pet Insurance Market 2021: Consumer Research Report

  • ID: 5322259
  • Report
  • May 2021
  • Region: United Kingdom
  • 62 Pages
  • IRN Research
50% of Pet Owners Held Pet Insurance in 2021, Higher Than Percentage Owning in 2019

This report examines the motivations, experiences and opinions of the UK pet insurance customer. Pet insurance is designed to cover medical expenses if the insured pet becomes ill or is injured in an accident.

Most products cater for cats and dogs, although there are policies available for horses and ponies, rabbits, fish and more exotic pets. Similar research was run in 2019 and the report compares and contrasts the findings over 2019 to 2021.

For this report, the publisher commissioned research from MIS Group’s UK panel. The research was structured so that 2,002 nationally representative consumers aged 18+ were asked if they owned an insurance policy. This generated 496 individuals who owned a pet insurance policy. Similar research run in 2019 generated responses from 503 individuals.

Half of consumers own a pet, with ownership rising slightly in the past two years. In 2021, 50% of pet owners owned pet insurance, which is higher than the percentage owning in 2019. The rise in pet ownership and insurance is likely to have been aided by the COVID-19 pandemic. COVID-19 has been a double-edged sword for pet insurance.

On the one hand, it has increased the percentage of households owning pets, making insurance more relevant. On the other hand, it has reduced consumer spending on veterinary services, thereby making insurance less relevant.

It has also squeezed the income of some consumers, making it harder to afford insurance and closed or restricted the opening of key retail sales channels for pet insurance. In 2020, the publisher estimates Gross Written Premiums (GWP) reached over £1.3 billion and the market is expected to rise by 38% between 2020 and 2025. 

Each year policyholders effectively start a new customer journey and receiving the annual policy renewal prompt tends to kick start a new journey. Each year, over seven-in-ten pet insurance cover holders are existing policyholders, and their choice comes down to either renewing with an existing provider (over half renew each year) or switching from one provider to another (around one-in-five switch each year).

In 2021, one-quarter of policyholders acquired their latest policy by embarking on their first ever customer journey, i.e. they were first time buyers. 

The COVID-19 pandemic which closed many outlets for selling pet insurance has helped reduce the tendency of policyholders to switch provider between 2019 and 2021, with the insured less likely to visit outlets where they could be exposed to new sales literature. This factor could also account for the drop in first time buyers (FTBs) between 2019 and 2021, with uninsured pet owners (especially first-time pet owners) less exposed to in-store marketing literature and hence less likely to take out insurance for the first time. 

Other findings from the report include:

  • Round one-in-five policyholders claimed in the past year. The vast majority of claimants are satisfied with the outcome of their last pet insurance claim, based on the fact that almost seven-in-ten claimants had a completely successful outcome to their last claim and around another quarter had a partially successful outcome. Only 10% of claimants described the process of their last claim as hard.
  • Pet insurance policyholders are cover focused. A majority put cover first when evaluating a policy and price second. However, the final price paid, and the level of cover achieved by policyholders is often the outcome of policyholder/insurance provider negotiation: most cover holders negotiate with their provider before buying a policy.
  • When looking for pet insurance deals at the start of a customer journey, price comparison websites (PCWs) are by far the most popular resource. 
  • Pet insurance policyholders show a liking for the security of high levels of insurance cover rather than being content with the bear minimum of protection. Because of this the most fully feature type of pet insurance (i.e., lifetime) is the most popular type of pet insurance owned.

The purchase includes the report and the detailed dataset of all survey results.

Note: Product cover images may vary from those shown

1. Executive Summary

  • A market with growth potential - less than half of pet owners have insurance
  • Lifetime, standalone insurance the most popular
  • Policyholders are relatively loyal but the customer merry-go-round still spins
  • Policyholders like to discover deals online, mainly via PCWs
  • Pet insurance policyholders are cover focused
  • Brands are important but are not everything
  • Most policyholders have a good experience
  • One-in-five have claimed in the past year
  • The claims process seems to run smoothly for most
  • A market worth over £1.3 billion

2. Introduction

3. Profile of The Insured Pet Owner

  • Pet and insurance ownership rises
  • Most pet owners will need to insure cats and dogs
  • Middle class pet owners the most likely to be insured
  • Dog and cat owners the most likely to be insured
  • Insured pet owners like to minimise their risks

4. The Type of Pet Insurance Owned

  • Lifetime insurance is the most popular type of insurance
  • Relatively slight variation in the type of policy owned across policyholders
  • Policyholders tend to own standalone policies and pay for them monthly

5. The Customer Journey Begins

  • Insured pet owners are a relatively loyal group of customers
  • Older cover holders the most likely to renew
  • The renewal prompt often starts the policy buying process, but switching is price led
  • The desire to switch remains among some policyholders
  • Most of those renewing also start a new journey
  • Over half of those renewing without searching still try and get a better deal

6. Buying a Policy: Finding The Right Deal

  • Price comparison websites start the search
  • PCWs will lead next year’s policy search
  • PCWs lead the research but buying direct is the norm

7. Policy Acquisition: Price Negotiation

  • By their nature, policyholders are cover sensitive
  • Brands are important but they are not everything
  • The final price/cover offer is the result of a negotiated settlement
  • Negotiations likely to centre on broad policy features
  • Insurers need to deliver policyholder information in a concise manner

8. Being a Policyholder

  • Insurance providers continue to meet their customer’s expectations
  • Policy management continues to move online
  • Almost one-third of policyholders have claimed in the past five years
  • Claimants are happy with the process

9. Market Size and Trends

  • The pet population grows
  • 2020 sees a decline in spending on veterinary services
  • A market worth around £1.3 billion
  • Two Big players
  • The market to reach £1.9 billion in 2025

List of Figures 
Figure 1 The structure of pet and insurance ownership
Figure 2 The pets owned by pet owners, 2019/2021
Figure 3 The percentage of pet owners owning pet insurance
Figure 4 Percentage of pet owners with insurance by pet owned
Figure 5 Attitudes to buying insurance by pet insurance policyholders and pet owners
Figure 6 The ownership of pet insurance and pet plans
Figure 7 The type of pet insurance owned by type of pet and insured pet owner demographics
Figure 8 The types of pet insurance policies owned and how they are paid for, 2019/2021
Figure 9 Policy acquisition and time with current provider and actions over the past year, 2019/2021
Figure 10 How pet insurance cover was acquired by age and social grade
Figure 11 The factors that caused policyholders to switch provider, 2019/2021
Figure 12 Search activity of policyholders before renewing
Figure 13 The activities of policyholders who renew at renewal time
Figure 14 Resources consulted over the past two year, 2019/2021
Figure 15 Where policyholders would look to compare deals and their attitudes to PCWs
Figure 16 From where the last pet insurance policy was purchased, 2019/2021
Figure 17 The cover focus when buying pet insurance by policyholder characteristics
Figure 18 Did policyholders buy from a well-known insurer/provider rather than cheaper alternatives
Figure 19 Negotiation with the insurer when taking out a new policy or renewing, 2019/2021
Figure 20 How policyholders read and understand their policy documents
Figure 21 Why policy documentation is not read in full, 2019/2021
Figure 22 Policyholder experience owning a pet insurance policy, 2019/2021
Figure 23 The access to and use of online portals, 2019/2021
Figure 24 The profile of pet owners by making a claim in the past year by pet owned
Figure 25 Claimant opinion of their last pet insurance claim
Figure 26 The UK pet* population (million), 2020/2021
Figure 27 Consumer spending on veterinary and other services for pets, 2015-2020
Figure 28 The pet insurance market (GWP), 2015-2020
Figure 29 Forecast of the pet insurance market (GWP), 2020-2025


Note: Product cover images may vary from those shown