’While this regulation was designed to benefit consumers, it also creates a significant opportunity for insurers to price more accurately than ever before,’ says chief revenue officer
Placing a cap on written prescription fees from vets will ”make it easier” for insurers to price competitively.
That is according to Henri Dowling, chief executive at pet insurer Waggel, who was responding to measures being implemented in the pet sector following an investigation by the Competition and Markets Authority (CMA).
The CMA said ”an unprecedented response from both the public and the sector has help to shape the CMA’s final report, which green lights a package of measures to make the market more competitive”.
Among measures include written prescription fees being capped at £21 for the first medicine and £12.50 for any additional medicines, as well as a price comparison website being introduced to help boost competition and drive down prices faced by consumers.
Dowling said that the measures are a ”really welcome change that will bring some clarity to pet owners and to the industry”.
He added: ”The current system is not working for anyone – vets are criticised for unexpected fees, wildly different pricing between practices makes it hard for insurers to price their products fairly and consumers are at the sharp end with surprise costs and higher premiums as a result.
”The cap, together with greater transparency on pricing, will level the playing field and give some power back to owners, as well as making it easier for insurers to price competitively.
“In the short-term, everyone should benefit from the cap and its accompanying measures, bringing much needed stability and transparency to vets fees.”
Dean Standing, chief revenue officer at Sagacity, added: “While this regulation was designed to benefit consumers, it also creates a significant opportunity for insurers to price more accurately than ever before. Historically, gaining full transparency over vets’ pricing structures has been difficult.
”With the CMA now requiring practices to publish price lists and share pricing data with comparison websites, insurers will have access to a far richer set of insights to inform their risk models.”
‘Left in the dark’
According to the CMA, 60% of UK households own a pet, while the vets sector is worth more than £6.7bn.
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Its investigation found that some pet owners are being charged high prices for written prescriptions, with many practices charging £30 or above for each prescription.
It also found that 70% of pet owners purchase long-term medication from their vet practice, even though many could save £200 a year or more if they bought online.
Martin Coleman, chair of the independent inquiry group at the CMA, said: ”Too often, people are left in the dark about who owns their practice, treatment options and prices – even when facing bills running into thousands of pounds.
”Our measures mean it will be made clear to pet owners which practices are part of large groups, which are charging higher prices and for the first time, vet businesses will be held to account by an independent regulator.
“Our changes put pet owners at the centre but also help vets by enhancing trust in the profession and protecting clinical judgement from undue commercial pressure – and that is important to ensure our pets continue to get the best care.”
Dowling added that for this intervention to work over the longer-term, and to not lead to stealth price increases elsewhere in vet bills, ”it will need to be carefully monitored”.
”The success is reliant on the cap’s ability to respond to spikes in inflation and the cost pressures they may put on vets’ practices,” he said.
‘Act quickly’
The CMA said the reforms would start to come into force later this year.
Standing said that “insurers need to act quickly to capitalise on this shift, or risk falling behind”.
”The timeline is already in motion, with larger veterinary practices required to comply by the end of the year,” he said.
”Over the coming months, insurers should focus on putting the right processes in place to capture and use this new data alongside existing first- and third-party sources.
”Those that act now will be best placed to turn this new transparency into a competitive edge – delivering more accurate pricing, stronger risk insight and better outcomes for customers.”
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
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