While the average pet insurance claim had gone up by £36 to £793 in 2018, the average pet insurance premium was down by £2 to £279, based on a report by the Association of British Insurers published in 2019. This was the first drop in premiums in 8 years. And while industry reports for 2019 are yet to be published our own stats might provide some clues.
In 2018, similar to the industry increase of £36 that year, our average pet insurance claim went up by £38 to over £460. In 2019, it went up by around £100 to over £560. Bought By Many's average seems lower than the industry's because of the way we calculate our claims.
Most insurers count individual payouts for the same condition as one large claim - meaning they log fewer but bigger claims - these make up the majority of the data used to calculate the industry average.
Bought By Many logs every individual payout as a stand-alone, therefore totalling a higher number of claims at a lower average. But overall, our average payout is likely to be similar to that of the industry. This means 2019 might be another record year for pet insurance payouts.
In 2018, pet insurers paid out a record £785m for pet insurance claims in total, according to the latest data from the Association of British Insurers (ABI). The increase is thought to be driven by the increase in average claim size.
The average pet insurance claim has gone up by 75% over the last decade, while the average premium has gone up by 50%.
The increase is likely to be driven by higher vet fees. With more advances in veterinary medicine, average claims are likely to keep going up.
Find out more information about the cost of pet insurance.
Average cost of a pet insurance claim
The cost of an average pet insurance claim increased to £793 in 2018 from £757 in 2017. There has been a huge increase over the last six year. In 2013, the average claim was £300.
It is worth noting that although this is the average for the industry, the average for Bought By Many or other insurers may differ.
The ABI's pet insurance statistic are based on data from insurers that are ABI members, which means it does not include all the insurers in the UK.
How many people have pet insurance?
According to the ABI, 4.8m pets in the UK are insured, of which 2.8m are dogs, 1.3 cats and 700,000 others.
Despite pet insurers making record payouts, the ABI says the majority of cat owners do not insure their pets. Only 1.3m cats out of 7.5m in the UK are insured. Overall, the ABI has seen an increase in insured pets in 2018 compared to 2017. It estimated that 67% of dogs and 84% of cats were uninsured in 2017.
According to the PDSA's recent Pet Wellbeing report, 43% of dogs and 62% of cats were uninsured in 2018.
Is the cost of pet insurance increasing?
The cost of the average pet insurance premium has gone up by 50% in the last ten years, but the average claim has gone up by 75%. Year on year, the average premium has gone down to £279 in 2018 from £281 in 2017.
This is the first time in 8 years that the average pet insurance premium has gone down.
The 50% increase over the last decade is due to a variety of factors but it is likely that the main reason has been higher vet fees. When vet fees increase, insurers have to pay out more when a customer makes a claim (as you can see in the ABI's recent figures). Premiums have been increasing in order to cover the higher payouts.
However, Bought By Many has introduced a Fixed for Life policy that offers fixed premiums that will never increase, even if you claim. It is only available to pets under the age of two and it can be a good way to manage the cost of your insurance. It is the only pet policy of this kind.
It's worth bearing in mind that these prices are only average prices. Your pet insurance premium will depend on a variety of factors, including the breed of your pet, the cover you require, and where you live.
Why has the cost of pet insurance claims been increasing?
There are several factors that have contributed to the increase in the average pet insurance payout. One of the most important is the fact that vet fees are increasing.
This is because the cost of treating a pet has been increasing overall in recent years due to advances in veterinary treatments.
Pet owners are investing more in the health of their pets these days, according to the Society of Practicing Veterinary Surgeons, by paying for procedures like ultrasounds and MRIs. These have only started becoming common practice for vets in the last few years.
Vets can do more for pets than ever before with better technology and more treatments available.
While the cost of pet insurance is increasing, covering the cost of treatment can run into thousands of pounds if you don't have cover.
Is pet insurance worth it?
Whether you need pet insurance or not is down to your personal circumstances. However, it can help pay for expensive vet fees that many people may not be able to afford.
The cost of vet fees will depend on the injury or illness your pet is suffering from but some treatments can cost thousands of pounds.
The ABI gives the example of a French Bulldog that needed treatment because of a fractured leg. The claim cost £7,300.
Another dog, a Terrier with lung problems, has incurred £40,000 of vet fees over the last 8 years that have all been covered by the owners' insurance.
“There is no NHS for animals, so if you’ve not got a pet policy in place – you risk having to foot veterinary bills out of your own pocket. These can often be in the thousands of pounds and vet treatment is only getting more expensive, not less. It’s promising to see the average premium coming down regardless of this trend and I’m pleased to see our members paying out more than ever before to protect the wellbeing of pets across the country,” said ABI’s Senior Policy Adviser for pet insurance, Joe Ahern.
Most policies will only consider paying out for treatment if your pet becomes ill after you take out the policy. However, Bought By Many has launched a Pre-Existing Policy that can cover your pet for conditions your pet has experienced in the past. It does not cover conditions experienced in the three months before the start of a policy.
Pet insurance can also include public liability. This can cover costs you are liable for if your dog injures someone or damages their property. For instance, if it ran out in front of a car and caused an accident.
This insurance isn't necessary for cats, as the law does not hold the owner responsible if a cat harms someone.
If you aren't interested in vet fees but are concerned about public liability, Bought By Many has launched a Liability Only product that covers you for £3 million of public liability insurance.
Rebecca Hollingsworth, general insurance policy adviser at the ABI, sums up the benefits of pet insurance nicely: "Pet insurance gives you peace of mind that you won't have to deny your pet life-saving treatment because the veterinary bills are too expensive."