Pet insurance is the fastest growing sector of direct insurance, according to a report released today.
Key Note predicted growth to continue in what is a relatively new sector, worth around £162m per year. The research company said that growth was due to the high rate of inflation of vet bills, estimated to be at 15% per annum, and the development of costly new veterinary treatments.
The increase in direct pet insurance is part of the continued boom personal lines' direct sales. The Key Note report said direct insurance accounted for 29% of business in 2002, double that of ten years ago. Brokers have been the main losers, with their share of the market declining from 59% in 1992 to 41% in 2001, said the report.
Retailers and utility groups have encroached on personal lines insurance and now account for 5% of the market, said Key Note.
Sales of motor and household insurance by direct providers have increased. The motor sector has the highest penetration of direct sales, with an estimated 35% of all motoring premiums coming from direct insurers.
Household and travel insurance achieved steady growth over the last few years, said the report.
Personally paid private medical insurance is now in steady decline, said Key Note. It added that a smaller percentage of the population is covered now compared to 12 years ago.
