More useful premium data from Pearson Ham for you;
The latest Pet Insurance Pricing Index for Q4 2025 from Pearson Ham Group’s Market Pricing Business (acquired by Defaqto, Jan 2026) shows UK pet insurance premiums declined in the final quarter of the year, reversing the modest increases seen in Q3 and reinforcing a broader picture of a market still adjusting to intense competitive pressure.
According to the Index, Lifetime premiums fell by -2.3% in Q4, with prices easing in each month of the quarter. The decline follows a +0.9% rise in Q3, indicating that the tentative stabilisation seen over the summer was short-lived as insurers re-entered price competition towards year-end.
Annual and multi-year trends point to prolonged softness
On a 12-month basis, Lifetime premiums ended 2025 -1.6% lower than a year earlier, with pricing movements alternating quarter-by-quarter throughout the year. Increases in Q1 and Q3 were outweighed by sharper declines in Q2 and Q4, leaving average prices broadly flat to down despite ongoing claims inflation pressures.
Over a longer time period, the data shows a more nuanced picture. While higher cover limits have seen the steepest falls over the past year – down around -11% year-on-year – premiums at these higher limits remain materially higher than in 2023. Over a three-year view, higher cover levels starting at £5,000 are still around +12% more expensive than in 2023, compared with a +9% increase for cover levels starting at £1,000, highlighting the longer-term repricing that took place earlier in the market cycle.
Product type, age and animal mix continue to shape outcomes
By product type, pricing for Time-Limited cover has continued to decrease at a more consistent rate than Lifetime and Maximum-Benefit policies, reflecting more constrained insurer participation and less aggregator-driven competition in that segment during 2025.
Across age bands, prices fell for all animal age groups in Q4, with the most pronounced year-to-date reductions seen among animals aged four to six, where competitive pricing from leading brands has driven premiums down by around -4% over the year. In contrast, premiums for older animals have remained broadly flat year-on-year.
Cats and dogs followed divergent paths over 2025. Cat premiums finished the year close to where they started, despite some volatility during the year, while dog premiums declined more steadily, underlining sustained competitive pressure in the largest segment of the market.
Regional pricing converges, but cost pressures intensify
Regionally, pricing movements were broadly aligned across the UK in 2025. Yorkshire saw the steepest annual decline at -3%, while London prices were effectively flat year-on-year.
However, the pricing data sits in stark contrast to underlying cost trends. ONS statistics show veterinary services inflation has risen by around +37% since 2023, significantly outpacing premium movements and widening the gap between claims costs and pricing.
Frances Luery of Pearson Ham Group, said:
“The fall in premiums during Q4 underlines just how competitive the pet insurance market remains. The modest uplift we saw in Q3 proved fragile, with insurers clearly willing to give ground again on price as the year drew to a close.
“What is becoming increasingly striking is the growing disconnect between premium levels and underlying cost pressures. Veterinary costs continue to rise sharply, yet premiums have stagnated or fallen over much of the past two years. While automation and smarter claims handling will help, the challenge for insurers in 2026 will be finding a sustainable balance between competitiveness and long-term profitability.”
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