General Insurance Article - Pet Insurance prices fall 14% year on year

However, the annual reduction was twice the -7% fall recorded for policies offering at least £5,000 of veterinary fee cover. Defaqto has observed insurers cutting prices specifically on their lowest cover levels while holding prices steady, or making smaller reductions, on higher-cover products.

 

Average top-five Lifetime prices fell by -1.7% in July, -4.1% in August and -0.4% in September. Although the pace of decline slowed at the end of the quarter, the reductions underline the continuing competitive pressure on insurers.

 

Prices have fallen across all Lifetime veterinary fee cover levels, but the scale of the reductions varies. Average top-five prices for policies offering at least £5,000 of veterinary fee cover fell by -7% over the past 12 months, compared with a -14% reduction for policies offering at least £1,000.

 

The strongest downward movement remains concentrated in Lifetime cover. Maximum Benefit and Time-Limited policies recorded more modest annual reductions of approximately -4% and -1% respectively. Defaqto’s analysis highlights less intense competition in these segments, where fewer brands offer cover.

 

Average top-five Lifetime prices for dogs fell by approximately -15% over the past 12 months, compared with -12% for cats. Prices declined across every animal age group. Animals aged one to three recorded the largest annual reduction, at approximately -17%, while those aged over six saw the smallest fall, at -12%. For older animals, reductions in August and September reversed the sharp increase recorded in June.

 

The downward trend also extended across crossbreeds, mixed breeds and pedigrees, with annual reductions ranging from -13% to -15%.

 

Regional differences remain, with a gap of around five percentage points between annual reductions in some areas. Pet owners in London and Scotland have seen smaller falls than those in Northern Ireland and parts of northern England. Regional veterinary availability and treatment costs may contribute to these differences.

 

Frances Luery, Product Manager at Defaqto, said: “A 14% annual reduction in average top-five Lifetime prices demonstrates the strength of competition in the pet insurance market. Prices continued to fall throughout the third quarter, reversing June’s increase and taking them further below last year’s levels.

 

“The CMA’s veterinary reforms could take influence in 2027. Clearer prices and written estimates should help owners make more informed decisions, but their effect on veterinary fee inflation will take time to emerge. Insurers will be watching how practices and customers respond over the coming year.

 

“Access to indicative quotes through ChatGPT also raises questions about how consumers will shop for cover. ManyPets’ move into this channel gives an early indication of how AI could change that journey. If customers increasingly seek a direct answer through a conversation, insurers may need to rethink how they reach them and explain their products.”