The UK pet insurance market showed signs of stabilisation in Q3 2025, with average premiums rising modestly after several months of correction.
According to the latest Pet Insurance Pricing Index from Pearson Ham Group, premiums increased by 0.9% in Q3 compared to Q2, marking a return to gradual growth following declines earlier in the year.
Month-by-month data indicated a steady upward movement, with average prices climbing 0.3% in July, 0.4% in August, and 0.2% in September.
Lifetime cover remains steady
Despite the modest rise in Q3, lifetime policy premiums are up just 0.7% year-to-date, showing limited recovery since the start of 2025. On an annual view, premiums remain 3.5% lower than in autumn 2024, reflecting the lingering effect of last November’s sharp 4.5% market correction.
Policies offering higher veterinary fee limits continue to show the largest annual reductions. Products providing £3,000 or more in cover have seen premiums fall by around 11% year-on-year, compared to smaller changes in lower-limit (£1,000) policies.
Pricing trends also varied by product type in Q3. Time-limited and maximum-benefit policies continued to exhibit greater volatility in quoted premiums, according to the data. In contrast, lifetime cover pricing remained more consistent, supported by a wider range of brands and sustained competition through aggregators.
Cat insurance rebounds, dog premiums stay soft
Premium convergence between different age groups was observed in Q3, following earlier declines in rates for animals aged four to six.
Across species, both cat and dog insurance saw quoted prices decline over the past year. However, cats recorded a stronger recovery in Q3, with the pricing index rising to 0.99 vs. 0.96 for dogs. This suggests that competitive pressures have eased slightly more in the cat segment, while dog insurance pricing remains relatively subdued.
At the breed level, the most pronounced annual reductions were recorded for mongrels and moggies, which make up a large share of insured pets and therefore exert broad market influence. In contrast, crossbreeds experienced a modest 1% rise in quoted prices, pointing to greater selectivity and differentiation in pricing.
Market stabilisation and pricing sustainability
Commenting on the findings, Frances Luery, of Pearson Ham, said the modest rise in Q3 points to a stabilising market after last year's steep corrections. While lifetime products remain highly competitive, continued volatility in time-limited and maximum-benefit cover reflects the impact of product availability and brand participation.
Luery added that the alignment in pricing across age groups and regions showed insurers are refining and recalibrating their models but the ongoing challenge is to balance competitiveness with sustainability, especially in areas where claims costs remain unpredictable.
Pricing discipline and cost pressures into 2026
Heading into 2026, the pet insurance market is expected to remain under pressure from rising claims costs, particularly due to veterinary inflation and increasing treatment complexity. With more owners claiming for long-term and chronic conditions, insurers are likely to maintain a cautious approach to pricing and risk selection.
Meanwhile, competition among major brands is expected to keep rates from rising sharply, but the need to preserve underwriting margins may limit downward movement.
For brokers and aggregators, a stabilising rate environment could signal greater pricing predictability and potentially increased consumer engagement, especially as affordability remains a concern.
Overall, the Pearson Ham data suggests that the market is entering a phase of measured correction, where insurers balance growth opportunities with the need for pricing discipline and profitability.
