Blog: Why knowing your customer is critical for pet insurers

Rising costs and growing complaints are testing the UK pet insurance market like never before. CRIF’s Sara Costantini explores how truly knowing customers and their pets can build trust, reduce risk and meet rising regulatory expectations.

Pet insurance in the UK is at a crossroads. Rising veterinary costs, inflationary pressures and a surge in claims payouts have pushed premiums to record highs, making pet insurance one of the fastest-growing and most scrutinised lines of general insurance. Yet, despite these challenges, pet owners remain deeply committed to protecting their pets, often prioritising pet insurance above other types of coverage.

For pet insurers, this dynamic market demands more than just traditional underwriting. It requires a fundamental shift towards truly understanding the customer, the pet and their owner alike, to deliver policies that are accurately priced, clearly communicated, and fit for purpose. Doing so not only helps manage costs and reduce complaints, but also builds the trust essential for long-term customer loyalty.

Rising costs and growing expectations

According to a CRIF survey conducted in March 2025 with 6000 consumers across Europe, 21% of UK consumers currently hold pet insurance, the highest rate in Europe. However, 39% of these policyholders report that their pet insurance premiums are the highest they have ever been, a figure more than double the European average.

This surge in premiums is driven by a complex mix of factors: escalating veterinary bills, ongoing inflation and record claims payments, topping £1.23bn in 2024 alone. For many owners, the prospect of their pet falling ill or sustaining injury is a significant concern, with 39% expressing this as a major worry.

Compounding these pressures, pet insurers face an increasing volume of complaints. Analysis from Insurance DataLab reveals a 26% rise in pet insurance complaints referred to the UK Financial Ombudsman Service (FOS) in the first quarter of 2025 compared with the previous year. Over the past five years, complaints have more than doubled, with over half upheld in favour of the customer – a clear signal that product design, policy wording and claims handling require urgent attention.

Why complaints are rising

The primary driver of complaints remains claims journeys, which account for over 70% of disputes. However, sales and advice-related complaints are rising sharply, increasing by 73% year-on-year. This points to a disconnect where customers find their policies do not perform as expected or lack clarity, leading to dissatisfaction and loss of trust.

Advanced data services now enable real-time validation of pet details, comprehensive risk profiling and the integration of diverse data sources such as veterinary histories, breed-specific risks and owner demographics.

Sara Costantini, regional director for the UK and Ireland, Crif

The consequences are profound: some pet owners are reluctant to claim due to fears of premium hikes, while others consider dropping coverage altogether. In a market where 17% of UK owners would cancel other insurance types before their pet policy, insurers cannot afford to let this trend continue unchecked.

Customer insight and data-driven solutions

Meeting these challenges means going beyond traditional underwriting to embrace innovative, data-driven approaches that allow insurers to know their customers better than ever before. Advanced data services now enable real-time validation of pet details, comprehensive risk profiling and the integration of diverse data sources such as veterinary histories, breed-specific risks and owner demographics.

These capabilities empower insurers to:

• Accurately validate pet and pet owner information: Ensuring pet details such as breed, age and health background are correct as well as policyholders’ claims history prevents underwriting errors and helps detect potential fraud. This reduces claims disputes and protects profitability.
• Generate holistic risk assessments: Combining multiple data points into a unified risk score allows insurers to tailor pricing and policy terms to each pet’s unique profile. For instance, pedigree dogs can cost up to 66% more to insure than mixed breeds, while large breeds can command premiums more than triple those of smaller breeds.
• Enhance customer communication: A deeper understanding of the customer enables insurers to explain policy coverages and exclusions clearly, managing expectations and minimising confusion during claims.
• Streamline claims processes: With better data integration, insurers can expedite claims validation, improve fraud detection and reduce the frustration that drives complaints.

Personalisation delivers better outcomes

The data shows location also plays a role in insurance costs: pet owners in the UK’s smaller isles pay on average 21% more than those in Wales, which has the lowest premiums, according to Go Compare. Meanwhile, lifestyle factors such as whether a pet is neutered, or how many pets are insured on one policy, can influence pricing and risk.

By harnessing sophisticated data analytics, pet insurers can reflect these nuances in their products and pricing, creating genuinely personalised policies. This tailored approach helps align cover with the customer’s specific needs and financial realities, fostering transparency and trust.

Building trust through transparency and fairness

Trust is paramount given the emotional connection owners have with their animals. Research shows that 32% of UK pet owners insure their pet’s life but not their own, highlighting the priority they place on their pets’ wellbeing.

For insurers, this means not only getting the price right but also communicating clearly and fairly about what policies cover, what they don’t, and how claims will be handled. Transparent pricing models and straightforward policy language reduce misunderstandings and the risk of disputes.

Embracing innovation to deliver value

To thrive and deliver value in this evolving landscape, insurers must adopt innovative data-driven tools and processes that give them a comprehensive understanding of their customers and the risks their pets face.

This knowledge helps insurers to design products that better meet customer needs, price policies fairly and manage claims with greater efficiency. It also supports compliance with rising regulatory expectations that focus on customer outcomes and product transparency.

Pet insurers who know their customer will not only reduce complaints and regulatory risk, but also build the strong, trusting relationships essential for long-term success in this deeply personal market.

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