The UK pet insurance market is forecast to more than double in size by 2030, reaching US$5 billion, according to a new report from ResearchAndMarkets.com.
The report projects a compound annual growth rate (CAGR) of 16.2% from its 2024 valuation of US$2.04 billion.
Growth in the sector is being driven by a combination of rising veterinary costs, increased pet ownership and ongoing promotional efforts by insurers. However, the report also points to persistent challenges, including affordability concerns, fluctuating premiums and consumer dissatisfaction with policy flexibility and transparency.
The sector has experienced notable pricing shifts in recent months. According to data from Pearson Ham and other industry sources, average premiums declined by 3.6% in November 2024, the steepest monthly drop since 2022. This is largely due to increased market competition and revised pricing strategies among providers.
While this led to short-term improvements in affordability, the trend reversed by early 2025. Premiums have since risen to levels more than 5% higher than in March 2024, influenced by rising veterinary fees, inflationary conditions and adjustments in underwriting practices.
The increase in costs has prompted some policyholders to reconsider coverage. Industry sources estimate that around 12% of pet owners have either cancelled or chosen not to renew policies due to affordability concerns. Nonetheless, there remains sustained demand, particularly among owners seeking financial protection against high-cost treatments.
Veterinary costs have increased by approximately 60% over the past eight years, according to the report. Contributing factors include advances in diagnostics, growing demand for specialised treatments, and higher operational expenses at veterinary clinics. Routine procedures, surgeries, and treatments for chronic conditions have become more expensive, raising the financial burden on pet owners.
As a result, more pet owners are turning to insurance to manage these rising costs. The accident and illness coverage segment accounted for 82.1% of total market revenue in 2024, reflecting demand for broader protection that includes chronic and hereditary conditions.
Insurance coverage for dogs continues to represent the largest share of the market by animal type, accounting for 52.7% of revenue in 2024. This is attributed to higher rates of dog ownership, estimated at around 13.5 million dogs in 36% of UK households.
According to industry data, canine insurance payouts rose by more than 23% in the first three quarters of 2023, reaching £800 million. Growing interest in liability coverage, particularly related to dog attacks, is also contributing to insurance uptake among dog owners.
The report notes that distribution through alternative channels such as veterinary clinics, pet retailers, and animal care centres is expected to grow at the fastest rate, with a forecast CAGR of 17.1% through 2030. These channels allow insurers to offer policies at the point of care or purchase, improving accessibility and convenience for pet owners.
Looking ahead, insurers are expected to focus on improving transparency, simplifying product offerings, and responding to potential regulatory developments. Discussions around veterinary fee structures and calls for greater pricing oversight may influence future product design and pricing strategies.
