Will the CMA cap for UK vet prescription fees fix the ‘broken’ pet insurance market?

The pet insurance market has grown a reputation over the years for being complex, price-driven and, often, opaque.

And, for a market with such emotional resonance this has led to it accumulating a fair share of complaints.

Indeed, Insurance DataLab analysis of Financial Ombudsman Service (FOS) data revealed that pet insurance complaints had the second highest complaint upheld rate across the UKGI marketplace, topping out at 45%.

Further analysis of FOS data from Q4 2025 saw the market intelligence service reveal that 63% of complaints originated from denied claims, in comparison to 31% in all other lines.

Another 17% of all pet complaints derived from pricing – almost six times more than in an aggregate of all other business lines.

And recent investigations have revealed the true extent of the transparency gap.

In the Competition and Markets Authority (CMA) provisional market investigation into veterinary services for household pets, released 15 October 2025, it was revealed that veterinary fees had increased by 63% between 2016 and 2023 across the entire market.

The investigation also found that some veterinary practices were charging as much as £30 for written prescriptions, leading the CMA to introduce regulatory reforms that will come into force later this year.

Measures include a cap of £21 on written prescription fees from vets for the first medicine and then £12.50 for any additional medicines, as well as a dedicated price comparison website to help boost competition and drive down prices faced by consumers.

While welcomed as a shift that could improve the prediction of claims costs, pet industry commentators have warned that the market interventions are no panacea. 

Pet and Equine Insurance Association (PEIA) founder and chief executive Sharon Brown told Insurance Times that, as “much as the industry anticipates that the CMA review will reduce the [claims] cost”, it will not do so directly.

Instead, she noted that the review will “encourage transparency” and, in turn, “encourage competitiveness” that will be the catalyst to driving down costs.

Echoing this view, Kay Chand, partner at Browne Jacobson, added that the CMA’s findings and recommendations will have a role to play in providing “more data transparency, which will help with underwriting decisions, pricing and premium”.

But, Chand noted, the CMA’s remit is limited.

While individual vets are regulated, she explained that the veterinary practices are not, creating a “constant tension between commercial profits and animal welfare”.

She stressed that addressing this imbalance would require government intervention beyond the scope of the CMA’s review.

The question for the insurance industry, she said, is how it will respond going forward.

A race to the bottom

As the number of pet insurance providers in the market increases, the “more and more squeezed” competition has become.

This is according to Claudia Rodriguez, risk and compliance director at Agria Pets, who explained that greater choice for the consumer can mean it is “harder to keep hold of customers”.

This presents issues for insurers looking to stand out with quality products and Rodriguez added that this is especially the case with the price comparison websites.

She explained that this can lead to customer disappointment at the claims stage when they realise the policy had “got inner limits, which weren’t necessarily demonstrated to the customer at the point of sale”.

And, Fairer Finance analysis, published on 6 October 2025, found a growing number of insurers offering products with headline coverage of up to £20,000 – but with capped payouts for key treatments, such as cruciate ligament damage or diagnostic scans, at a fraction of the current inflated veterinary costs.

Seeing a similar picture, Napo Insurance chief executive Jean-Philippe Doumeng initially launched the insurtech in 2021 with the “purpose” of improving the customer side of the experience.

He said he believed that the industry was currently in a “race to the bottom” on price comparison websites that had “ended up creating this negative loop of pressure on price”.

This lack of claims transparency is what inevitably lowers the quality of cover and leads to increasing prices at renewal, which “ends up backfiring” on the customer, he explained.

“When it comes to price increases, we are doing our best to not follow that race to the bottom,” he continued.

“We price accurately and we have premium products. It’s not a question of pricing competitively. We’ve seen people in the market pricing below what makes sense because then they secure the customer and then that customer is locked in this pre-existing condition. Ultimately, what we’re trying to do is to be fair on everything we do. That doesn’t mean cheaper.”

Need to ‘pivot’

The number of new pet products that have entered the market in the last year also have a part to play in contributing to this “consumer confusion”, Brown said.

She continued: “It’s a very confusing marketplace. It’s great that consumers have choice, but the choice has to be clear and, at the moment, it’s not clear, which is why there’s lack of clarity at point of sale.”

With the added transparency from the CMA ruling, Sebastia Company Mas, senior product manager at Guidewire, noted that insurers are feeling “the pressure [when] moving away from customer price” and will “need to be able to pivot”.

Company Mas explained that this makes “product agility” essential to offer “greater clarity” for what is covered for the consumer.

Speaking to Insurance Times, Admiral pet director Pritpal Powar said that a priority for the insurer has been to “simplify the products”, ensuring no specific inner limits while improving customer communication.

In comparison, Powar noted that he has observed some firms responding to increased competition by “stripping down their products and potentially having higher excesses to get to the top of the screen on price comparison”.

He continued: “That’s not an avenue that works within this sector because customers are looking for value.

“Price is part of that, but service and products are equally important as is the claims experience. I am seeing providers respond in different ways, but I think what is probably still important to note is the biggest players in the pet insurance market are still those [firms]. They’re not the ones that are skimping on product coverage or excess.

“They’re the ones that have taken a much more holistic approach to providing a combination of great value and service backed by making sure that the claims experience is in a good place and that’s absolutely what we’re looking to do.”

Commercial to consumer focus

The real opportunity for improving the pet insurance market is collaboration, said Rodriguez.

She stressed that the issues the market is grappling with lie in the “broken” ecosystem between the vets and insurers.

And, to improve pet and customer outcomes, vets and insurers “need to work together”.

Further, Powar said that there are “parallels” between the insurance industry and CMA recommendations for vet practices in their shift from a commercial to “customer focus”.

He explained that this presents a “real opportunity to improve the customer journey from the point of need through the treatment pathway and all the way through to claim”.

Believing there not to be enough integration in the journey between the customer, the insurer and vet, he said that it is “critical” that firms “start with the customer and not the commercials” when identifying the main issues in service.

He said: “The most important element to benefit should be the customer because, ultimately, if we can get that integrated journey and they’ve got great better service and we’ve got better control of costs – the premium should be reflective of that.

“Then the whole experience of the insurance journey and the treatment that their pet receives should be enhanced.

“I mean that’s what we’re here for right?”