Pet insurance premiums for lifetime cover, the most widely chosen form of pet insurance, saw a 1.4% increase in Q2, according to the latest Pet Insurance Price Index from Pearson Ham Group.
This rise has resulted in premiums being 12% higher than they were a year ago, despite the ongoing investigation by the Competition and Markets Authority (CMA) into the veterinary market.
The CMA's initial review raised concerns regarding limited competition and reduced consumer choice within the veterinary sector. Although pet insurance prices had seen a decline in Q1, the increases observed in Q2 have effectively nullified these previous reductions.
The primary reason for the rise in premiums is attributed to escalating costs faced by insurers. These costs are driven by the consolidation within the veterinary industry, where larger chains have been acquiring independent practices, leading to reduced competition and higher veterinary fees.
According to Pearson Ham, this trend is particularly evident in northern regions, where costs have risen more rapidly. In London, premiums experienced the highest monthly increase in July at 2.4%, while the North East and Scotland recorded the most significant price hikes over the past 12 months.
Over the past year, pets aged 4-6 years have seen the largest price increase, with premiums rising by 20%. Crossbreed dogs have experienced an even sharper increase of 23%.
In terms of regional price movements, London experienced a 2.4% monthly increase and an 8% increase over 12 months. The East of England saw a 1.6% monthly rise, also resulting in an 8% increase over the year.
In the South East, premiums went up by 1.6% monthly and 11% over 12 months. The North West saw a 1.5% monthly increase, with a 13% rise over the year. In the South West, premiums increased by 1.4% monthly and 9% annually.
The North East experienced a 1.3% monthly increase and a 19% rise over 12 months. In the West Midlands, premiums rose by 1.3% monthly and 11% over the year. Yorkshire and The Humber recorded a 1.2% monthly increase and a 13% rise annually.
The East Midlands saw a 1.1% monthly rise, leading to a 12% increase over 12 months. Northern Ireland experienced a 1.1% monthly increase, with an 8% rise over the year. In Scotland, premiums increased by 1.0% monthly and 15% over 12 months. Wales saw a 1.0% monthly rise, with a 14% increase annually.
Frances Luery of Pearson Ham Group observed that pet owners may be surprised by the continued rise in premiums, particularly given the CMA's investigation into the veterinary sector. The increase reflects ongoing pressures within the pet insurance market.
While prices may have stabilised, future premium trends will depend on the CMA’s actions and its approach to addressing competition issues in the market. Should the CMA's actions result in lower veterinary costs, a corresponding decrease in pet insurance premiums could follow.
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