British pet owners pet insurance premiums are set to exceed £1 billion by 2017, with growth being driven by escalating veterinary fees, rising claims costs and advances in veterinary care, according to a new report.
Almost half of UK households own at least one pet and with advances in veterinary care, pets are living longer and require more complex and extended treatment. By 2017 gross written premiums for pet insurance in the UK is forecast to reach £1.1 billion, growing at a Compound Annual Growth Rate (CAGR) of 11.3% from 2013.
According to the report, customers are more likely to claim on pet insurance than on any other type of personal insurance. Allianz Insurance, the owner of Petplan Insurance and underwriters of The Co-operative Pet Insurance, reported an increase of 52.8% in the number of claims closed during the 2008-2012 period, with the value of claims incurred rising by almost 30%.
Insurers will be looking to ramp up premiums as the value and frequency of claims increases.
“High claims ratios insurance mean that insurers are likely to continue raising premium rates. However, the development of limited cover and accident or injury-only policies is likely to result in a growing affordability of the product”, says Timetric economist Laura Balkarova.
The UK pet insurance category grew 35.5% in absolute terms during the 2008-2012 period, becoming the fastest growing category of insurance sales. Hefty veterinary bills increased the value of pet insurance among responsible pet owners, with overall household expenditure on pets also rising by 22.2% between 2008 and 2012.