Pet premiums drop as CMA announces vets market concerns

Pet insurance premiums have started to reduce amid the Competition and Markets Authority (CMA) looking into the vets market.

According to figures by Pearson Ham, prices for lifetime cover dropped 2.5% in March 2024 – premiums for cats, meanwhile, decreased by 1.8%, while pricing for dogs saw a larger drop of 2.7%.

The latest data means that this is the first time pet premiums have started to fall this year.

And Pearson Ham said the drop coincided with the CMA announcing on 12 March it had provisionally decided to launch a formal market investigation focused on its provisional analysis of issues in the sector.

The regulator’s initial review highlighted several concerns, including potential weak competition in certain areas and concerns over possible diminished competition and consumer choice.

“The CMA’s announcement of a formal market investigation into the vet market alongside the reduction in pet insurance premiums in the same month is significant,” Stephen Kennedy, director at Pearson Ham, said.

“While it’s challenging to determine the precise impact at this stage, it is likely that pet owners will benefit from these developments. By how much and by when still remains to be seen.”

Year-on-year

Despite the price drop in March, premiums remain approximately 20% higher than 12 months ago, Pearson Ham said.

And year-on-year inflation for dog insurance stands at 22%, double that of cat insurance at 11%.

“There are multiple factors influencing pet insurance pricing, including developments in diagnostic tools and treatments, which are escalating claims costs,” Kennedy said.

“Furthermore, there is a notable disparity in vet fees across the UK, reflected in insurance pricing, though this gap is narrowing as vet ownership consolidates.

“A likely impact of that, however, is that pet insurance premium inflation has increased across the board.”