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Two analyses of the pet insurance market have been published this week, which together suggest that veterinary practices may be starting to price themselves out of the market.
Both reports are titled Pet Insurance 2014. In the first, published by Key Note Ltd, authors highlight a 35.4% increase in gross claims incurred on cat and dog insurance policies between 2009 and 2013, which is more than 5 times the increase in the volume of claims over the same period. It is the degree to which the value of claims has outstripped the volume which the report describes as 'undeniably the greatest factor affecting the UK market for pet insurance.
At the same time, there has been a relatively modest growth in the percentage of adults that own a cat or dog (around 1.5 percentage points). Consequently, premiums increased by 38.9% between 2009 and 2013 as insurers responded to the growing cost of claims.
Meanwhile, the other Pet Insurance 2014 report, this time from YouGov, has shown that the main factors limiting the uptake of pet insurance are poor value for money and the high cost of premiums. In 2012, 31% of owners without insurance said it was not good value for money, and that was the main reason for not taking out cover. By 2014, that figure had risen to 39% of the uninsured and 26% said they just cannot afford premiums.
According to the YouGov report, the words that uninsured pet owners most associate with pet insurance are 'expensive' (68%) and 'waste of money' (30%). Even 57% of those with insurance deem it expensive.
YouGov also highlighted that the number of uninsured pet owners who say they can afford to pay for veterinary treatment out of their own pockets (without setting money aside each month) has increased 4 percentage points from 15% in 2012 to 19% in 2014. YouGov hypothesises that this may be down to the improving economic situation in the UK, but it could equally be explained as just the way hard-pushed people self-justify their decision to discontinue insurance.
James McCoy, Research Director, YouGov Reports said: "Although social grade is important to being able to afford to take out pet insurance, our research suggests that those at different ends of the financial spectrum share the opinion that cover is not necessarily always a sound financial option.
"More affluent pet owners find insurance poor value because they can afford to pay for treatment up front; for less affluent pet owners, while pet insurance is perceived as offering good value for money, the cost of premiums is prohibitive, leading some to save money instead."
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Does this report take into account that between 2009 - 2013 surgical and medical care for patients has improved dramatically, not to mention referring cases to a specialist has become the norm in most places. Interesting numbers but I'll take it with a pinch of salt.
Surely this has to do with the high cost of premiums and the amount of insurers who are restrictive when paying out , rather than the overall veterinary fees.
is the increase in claims proportionate to the increased useage of OOH services and referral practices? Is it that many first opinion practices are referring more cases (insured animals) these days to specialists