Quarter of pet owners have insurance
Wednesday, 17 Sep 2008 07:01
Pet insurance is increasing in popularity
Pet insurance is one of the fastest growing insurance markets in the UK and a quarter of pets are now covered, according to research.
Datamonitor found the market grew by almost 17 per cent to £440 million in 2007 and predicts this will expand a further 58 per cent to almost £700 million in 2012.
This means a quarter (26 per cent) of pet owners have taken out insurance, Datamonitor said.
"Increased consumer uptake of the product along with premium rate increases to cover high claims inflation have combined to make this one of the fastest growing insurance markets in the UK," said Andrew Haslip, financial services analyst at Datamonitor and author of the report.
Greater availability and higher profile has increased owners' awareness of the pet insurance, which has been a relatively niche line for many years.
As more and more owners become aware of the cover available, pet insurance will become more mainstream, Datamonitor suggests.
The market has also become more valuable because premiums have risen, although this may eventually slow down growth as owners are put off by high bills.
"Controlling claims costs and limiting premium rate increases is the principal challenge facing the market going forward," Mr Haslip added.
The primary driver forcing up claims costs has been the increase in the number and cost of veterinarian treatments, which have become increasingly sophisticated in recent years. As such, insurers and veterinarians will have to work together to limit cost increases, Datamonitor said.