Pet insurance premiums spike in last six months of 2023

Pet insurance premiums rose by 13% during 2023 due to a surge in prices in the last six months of the year, according to new figures by Pearson Ham.

The pricing specialist’s inaugural Pet Insurance Quarterly Insurance Price Index, published yesterday (7 February 2024), showed that costs rose by 12% between July and December.

This was driven by a “substantial spike” between August and September, Pearson Ham claimed.

It also noted a contrast in price hikes between different pet insurance products.

For example, price increases for lifetime products rose 12% in the last six months of 2023, while costs for maximum benefit products and time limited products increased by 3% and 2% respectively.

“Throughout 2023, the Office for National Statistics (ONS) reported prices for vet and other services for pets increasing by 17.3%, so average premium increases of 12.9% observed for lifetime cover is positive,” Pearson Ham director Stephen Kennedy said.

The Index further highlighted differences in price increases between dogs and cats – for example, pet insurance for dogs increased by 14% throughout the year, while cover for cats rose by 7%.

£2bn market

The findings came as the Competition Markets Authority (CMA) launched a review to look at consumer experiences and business practices in the provision of veterinary services for household pets in the UK.

“An investigation into vet pricing and customer choice is underway by the CMA and we will see if this has any ramifications on pet insurance pricing in the year ahead,” Kennedy said.

As part of the review, the non-ministerial government department said it will explore how well the market, which is worth over £2bn in the UK, was working for pet owners following “a lot of consolidation in the vet industry in recent years”.

The CMA said it was keen to hear more about pet owners’ and vet practitioners’ experiences of pricing services, including whether pet owners were aware of how much a treatment would cost and if they would pay for it themselves or via insurance.

CMA chief executive Sarah Cardell said that “when a pet is unwell, they often need urgent treatment, which means that pet owners may not shop around for the best deal like they do with other services”.

“Caring for an ill pet can create real financial pressure, particularly alongside other cost of living concerns,” she added.

“It’s really important that people get clear information and pricing to help them make the right choices.”