If figures from GlobalData are anything to go by, then it looks like the pet insurance sector is catching on – not only are gross written premiums (GWP) up, but insurtech has also furthered its reach in the market.
Here are the details, according to GlobalData’s “
UK Pet Insurance: Market Dynamics and Opportunities 2017” report:
- GWP of over £1 billion in 2016, an increase of 7.1% and the first time the sector has broken the billion mark;
- Claims incurred up 7.4%, partly attributed to technologically improved quality of treatments and procedures becoming more common;
- Product penetration rose, with the number of subscribers reaching 3.4 million (2% jump) in 2016.
In addition, GlobalData cited the growing influence of online aggregators – a shift from what it said has been a slow uptake, with some brands now mainly distributing pet cover via comparison websites.
However, while consumers benefit from becoming more aware of policy differences, the risk of reduced customer satisfaction has reportedly grown. “There are often additional costs hidden in the small print that are incurred later on, perhaps not flagged as clearly as in other channels,” noted the analytics firm.
“The greatest issue facing this market is that insurers cannot continue raising premiums by almost 10% every year without driving customers away,” commented Ben Carey-Evans, general insurance analyst at GlobalData. “Solutions are needed, and for the short to medium term the response looks to be utilisation of co-insurance.”
He added: “Lifelong policies are becoming increasingly dominant in the market, especially in policies sold through online aggregators. An industry source has claimed that the number of customers opting for lifelong policies through aggregators at their company has increased from between 15% and 20% in 2012 to around 50% in 2017.”
As for other applications of technology in the market – which GlobalData described as having been “one of the slower lines to embrace change” – we have now also seen emerging trends. While the motor insurance industry has telematics, the pet cover sector has the likes of PitPat, a fitness app for pets.
Cary-Evans said owners proving their pets are keeping healthy could help bring down costs in the long run.
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