Pet Insurance: Will CMA Investigation Slow the Rate of Vet Fees Inflation?

Relevant to the results is the fact that the Competition and Markets Authority (CMA) has announced its decision to launch a formal Market Investigation into the vets market further to a review that identified multiple concerns, not least the potential weak competition in certain areas and concerns over possible diminished competition and consumer choice.

The CMA launched its review of the sector and issued a Call For Information (CFI) in September 2023. The Pearson Ham analysis found that the majority of price rises took place in the last six months of the year (they rose by 12%) with the most substantial spike occurring between August and September, when prices rose by almost 4%.

Prices for lifetime products saw a marginal increase of 0.5% in February 2024. Lifetime cover is the most sought-after form of pet insurance, with cat insurance seeing a 2% increase while dog insurance recorded a modest 0.1% increase. Regional disparities are also apparent, with the North-East experiencing the most significant annual increase at 30% compared to last year. However, prices in this region saw a slight decline of -0.2% in February, indicative of the fluctuating nature of the market.

“The CMA has launched a consultation to seek views from the sector on the proposal to launch a market investigation into the vet market but the immediate impact on insurance pricing remains uncertain.

“While our data reveals a slight 0.5% increase in Lifetime cover prices for February, the broader year on year movement is raising considerable concern, as outlined by the CMA. Nevertheless, it is essential to recognize the multitude of factors at play in determining pet insurance pricing.”

Michael Foote, CEO of pet insurance comparison site, Quotegoat.com, said:  “The decision by the UK watchdog to initiate a formal investigation into veterinary pricing is not just much-needed but also long overdue, addressing concerns voiced by thousands of pet owners. The lack of transparency in pricing has left countless pet owners in a state of uncertainty regarding the potential financial implications of treatment, leading to situations where some may delay seeking veterinary care out of fear of hefty bills, meaning animals endure unnecessary suffering. 

“It always feels like such a gamble when you take an animal to the vet – you never quite know what you’ll be charged for and it’s common to walk away with a small bottle of drops that cost upwards of £60 on top of a consultation fee that you can’t claim on your pet insurance.  
“Pet owners must be provided with clear and transparent pricing information upfront, akin to the clarity one expects from healthcare services such as dental care, with banding for certain types of treatments. By being transparent about treatment costs, if there are any alternatives available and offering clarity on what can be claimed through pet insurance, veterinarians can empower owners to make more informed decisions about their pets’ health and well-being and help prospective pet owners make decisions about whether or not they can afford pet ownership.”