Pet insurers must seize the opportunity for growth following a surge in pet purchases during lockdown, according to GlobalData.
This high penetration rate suggested that the market for pet insurance is “poised for growth” this year, as the number of new pet owners continues to increase “rapidly”.
According to its data, this demographic had the highest penetration rate, with 74% of owners between these ages holding pet insurance in 2019, for example.
Nonetheless, the pet insurance market contracted slightly by 1.8% last year, according to the Association of British Insurers.
As a result, the surge in pet ownership following lockdown “creates an opportunity for the market to bounce back to growth in 2020”.
GlobalData’s senior insurance analyst, Daniel Pearce, said that insurers must still remain wary, adding:“Despite the positive outlook for the pet insurance market, the cost of claims may also increase as a result of COVID-19.
“The lockdown measures have allowed owners to spend a lot of time with their new pets, but they have also restricted the amount of exercise that pets have been doing.”
He added: “With obesity-linked ailments being a key driver behind the cost of claims, the reduction in exercise levels will pose a challenge to the industry.
“This is particularly the case as owners’ habits may change for the long term and especially if measures restricting their ability to move around remain in place for a prolonged period of time, reducing the confidence and willingness of individuals to go outside.”