Spotlight: Pet insurance – time to face changing times?

An expanding market – along with a CMA review – should mean a fairer deal for pet owners. But providers must also be ready to meet challenges head-on, such as a lack of consumer understanding and a likely rise in fraud. Rachel Gordon reports.

Pets have no NHS and for the vast majority of owners, private treatment is the only option, so it’s no wonder the pet insurance market is growing fast.

At the same time, vets’ fees are rocketing, and it was recently revealed that ABI members paid more than £1bn in claims during 2024, up 4% on the previous year. This breaks down as £933 million for dogs, £232m for cats and £61m for other pets.

In 2024, 4.6 million pet owners took out insurance, a 3% rise on 2023 and a massive 33% higher than in 2019. Even so, while estimates vary, it’s still thought that only about a quarter of pet owners take out insurance, so there’s plenty of opportunity for providers.

A market under scrutiny

What’s more, vets’ fees are under scrutiny – there is believed to be consumer detriment, hence a market review by watchdog the Competition and Markets Authority, which will report in February 2026.

This focuses on the rising cost of vet care and medication, limited transparency and poor complaints handling. The veterinary market has undergone significant change in recent years, including consolidation and private equity involvement.

The CMA’s work should lead to a more competitive market and ideally, better consumer understanding. It could also have a positive impact on insurance in terms of more price stability.

Simplifying policies for greater transparency

Pet insurance is complicated, with hundreds of different policies and wording variants. Plans range from the cheapest accident-only policies, to those which only pay to a set annual limit, to those which are comprehensive, known as ‘lifetime’.

However, forward thinking pet insurance providers are looking to demystify cover. Perfect Pet, the brand of the Tedaisy Group, launched in 2017 is among the providers looking to increase consumer understanding.

Marketing director Nicole Sanders comments: “We’re on a journey to ‘uncomplicating’ pet insurance by being as simple and transparent as we can.”

We’re on a journey to ‘uncomplicating’ pet insurance by being as simple and transparent as we can.

Nicole Sanders, marketing director, Tedaisy Insurance Group

She adds that greater pricing transparency is also a focus for the CMA’s work, which “aligns with our belief that customers deserve clear, upfront information about treatment costs and insurance coverage.”

Major insurer Admiral also sees scope in pet insurance and entered the sector in 2021, as a means to diversify and meet customer needs.

A spokesperson says: “We’ve grown in size and capability and are steadily on track to being a top five UK pet insurer by the end of the year. Continuing in this trajectory remains a priority for us.”

She adds Admiral backs advancements in medicine as it “means more options for our customers. For example, MRI scans are increasingly being used for faster and more reliable diagnostics. Our products do not contain any specific limitations for MRI use (outside standard product vet fee limits).”

Combating insurance fraud

There are ongoing fraud investigations within the sector, including cases where individuals are believed to have made false death claims, with analysts reviewing details, payment records and medical histories.

According to industry sources, investigators are looking into professionals, including some within veterinary practices, suspected of facilitating insurance fraud by providing fake death certificates and doctoring invoices. They added that there is also evidence such practices are linked to poor care of animals.

...There is much to learn from more mature sectors such as motor and home, where shared databases and cross-industry collaboration have proven effective in tackling fraud.

Kerry Willecome, head of marketing, Petgevity

Insurers can also attend workshops and forums that bring together different organisations across the industry to ensure they are up to date with emerging threats and trends.

As the market grows, pet insurers can be expected to invest more in their claims verification systems and where appropriate, collaborate more closely with shared industry fraud initiatives.

Kerry Willecome, head of marketing for provider Petgevity, which is part of the Staysure Group, says: “Fraud is a growing concern in pet insurance, just as it is across other lines of insurance. However, there is much to learn from more mature sectors such as motor and home, where shared databases and cross-industry collaboration have proven effective in tackling fraud.”

“Having identifiable claims shared between everyone who plays in the space would be game changing in the pet world. It would reduce fraud for everybody and protect customers from the joint liability of fraud.”

Can pet insurers learn from the private medical sector?

As veterinary medicine advances, consumers will want policies that can meet higher treatment costs, yet remain affordable.

Pet insurers may also face pressure from regulators if it’s felt consumers are unclear about what their policy covers. This is most likely to be with annual (or time-limited) polices, maximum benefit or accident only. It has been mooted that regulators will favour lifetime polices as being the ‘fairest’ option.

To boost affordability, one option could be for pet insurers to look at the private medical insurance sector.

Comparing PMI with pet policies though is not like for like. There may be similarities with monthly premiums and excesses, but human private healthcare has far higher limits. A pet insurance plan may have a maximum limit of £12,000, for example, compared to a PMI limit of £1m.

Meanwhile, although animal medicine is advancing, the treatments available for people are far more advanced, whether in areas such as surgery or chemotherapy, for example.

But one strategy employed by PMI providers to manage costs is the use of approved networks and consultants, which allows for greater price certainty and improved claims management.

Currently, those with pet insurance can use any vet practice. However, Sanders says preferred vet networks could “help manage costs and streamline claims. However, this must always be balanced with choice and convenience for pet owners.”

Willecome agrees the market could “benefit from cost containment” but it would need to be adopted across the market to work.

She points out: “Other providers have tried to have a preferred referral network – you paid an extra £200 excess if you used one that was not on the list. But all the big referral centres paid it for the clients. We also know costs vary significantly by area, and popularity of vets. This has been tried and tested throughout the industry but there is still no perfect solution.”

By taking on board what the PMI industry does, it would allow all insurers to keep premiums lower and boost affordability for pet owners, whilst also allowing vets to be still paid fairly for their time and work.

Kerry Willecome, head of marketing, Petgevity

Overall though, she says it could be a positive move: “By taking on board what the PMI industry does, it would allow all insurers to keep premiums lower and boost affordability for pet owners, whilst also allowing vets to be still paid fairly for their time and work.”

Meanwhile, Vetsure focuses on an ‘accredited network’ of vets which are independent. Florence Page is a vet and head of business development and the company was founded by fellow vet, Ashley Gray, in 2009.

A client insured with Vetsure can use any vet, but as Page says, its ethos is to support the independent sector. “It’s great to see in the current market a number of young vets setting up on their own as independent practices,” she says.

Vetsure underwrites in house and has a team of vet nurses to help customers. According to Page, using an independent vet should lead to better care and ultimately value.

She adds that fast claims payouts also help vets provide good care. “We only offer lifetime policies and want to be as easy to understand as possible.”

A prompt claims service also calls for efficient verification and this looks set to be an area where pet insurers will make further investment.

As Willecome says: “Claims management is a consistent point of evolution, and we are excited to implement further advances to claims management in the coming years to make the process as easy as possible for the customer through ‘My Account’.

We’re in the process of looking at initiatives and partnerships to ultimately make claims and vet fee limits go further.”

The future of pet insurance

The animal health market benefits from innovation, and Page points out that osteoarthritis is one example where animals can now benefit from “some amazing treatments” but these can be high cost.

“Having insurance allows the pet owner to take advantage of these. It can be horrible if treatment is unaffordable.”

Page also believes vets need to focus on prevention, which can filter through to insurance, as with PMI plans.

She says encouraging owners to have regular checks and tackling health problems early, such as joint issues and obesity, will also bring longer-term benefits.

Policies are now more likely to reflect human healthcare preferences and Petgevity, for example, includes complementary therapies – up to limits – on treatments such as hydrotherapy, massage, physiotherapy and osteopathy.

Willecome adds there is also a trend for some customers to tailor their product to suit their needs.

“One of our most popular developments is allowing customers to tailor their product; alongside pre-packaged policies. Offering both allows everyone to choose what’s best and convenient for them and their pet.

Having insurance allows the pet owner to take advantage of [some amazing treatments osteoarthritis]. It can be horrible if treatment is unaffordable.

Florence Page, vet and head of business development, Vetsure

“We’re seeing from those customers that tailor their policies that higher limits are increasingly popular, with many rising vet limits to £20,000, excesses up to £500, bill share up to 30%, alongside add-ons such as travel insurance and we are proud to offer worldwide cover.”

Perfect Pet is also “focusing on customer empowerment and education through our signs and symptoms checker and vet advice line.”

Sanders adds: “As AI and automation becomes more prevalent, we’re looking for ways to limit repetitive tasks and empower staff for the moments that matter – when our customers need them emotionally – for example, our bereavement line and process.”

Initiatives such as this suggests that the pet insurance sector is evolving at pace. It points to a more sophisticated market, where products have higher limits and with broad coverage - this also calls for improved systems and efficiencies.

These are exciting times for a market with much potential and is good news for the UK’s pet owners.

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