General Insurance Article - Pet insurance is getting harder for customers to navigate

The report, Closing the Value Gap: Pricing, Behaviour and the Future of UK Pet Insurance, shows that the number of pet insurance products available to consumers has increased by 111% since August 2023, driven by a proliferation of excess structures, co-payments and veterinary fee limits. While intended to sharpen competition, this growth in choice is increasingly creating confusion at the point of purchase and dissatisfaction at the point of claim.

 

The findings come as pet insurance records the highest upheld complaint rate of any general insurance product, with 52% of cases found in favour of the customer by the Financial Ombudsman Service.

 

“Competition has done exactly what it was supposed to do, it has created more choice,” said Ian Hughes, CEO of Consumer Intelligence. “The problem is that the market hasn’t stopped to ask whether customers can still understand what they’re buying.”

 

Consumer Intelligence’s consumer research shows that many pet owners are unable to correctly identify the type of cover they hold, a gap in understanding that often only becomes visible when a claim is made. As veterinary fees rise and product structures become more intricate, the consequences of this confusion are becoming more acute.

 

“When customers don’t understand their cover, the relationship breaks down at claim,” Hughes said. “At that point, it’s not a documentation issue, it’s a trust issue.”

 

The report argues that increasing choice without corresponding improvements in clarity risks undermining fair value outcomes under Consumer Duty, particularly where policy limits and exclusions materially affect claims experience.

 

The research also highlights a market under strain from conflicting pressures. Veterinary inflation and consolidation have driven claims severity upward, while intense competition, particularly on price comparison websites, has pushed new-business pricing down.

 

At the same time, insurers face strong incentives to compete aggressively at point of sale, particularly in lifetime policies where early acquisition is critical. The result is a complex product landscape that prioritises price visibility over comprehension.

 

Rather than calling for less competition, Consumer Intelligence argues the findings point to a need for more purposeful simplification, aligning product structures, naming conventions and documentation with how customers naturally interpret cover.

 

“Choice only works when it helps customers make better decisions,” Hughes said. “When it becomes noise, the market stops working properly.”

 

The report concludes that insurers able to simplify product design, communicate limits more clearly and treat claims as a moment of earned trust will be better positioned to meet Consumer Duty expectations and unlock sustainable growth in a maturing market.