Why Pet Insurance Must Now Compete on Customer Experience, Not Just Price

This piece is by Sara Perez, Executive Vice President, EIS

Pet insurance has a rare opportunity to build on improving customer trust with insurers. After several difficult years for the wider insurance market, confidence appears to be moving in the right direction. Claims satisfaction is improving. Insurance premiums in many categories have begun to ease, and customers increasingly seem inclined to stay with insurers who deliver quickly and fairly at the point of need.

That should be encouraging for the industry. But it should not create complacency.

Pet insurance is entering a more complex phase. Customer expectations are rising just as the cost of veterinary care is becoming more visible, more difficult to absorb and harder to explain. The insurers that succeed will not be those that compete on price alone. They will be those that continue to build trust by improving the entire customer journey, from pet care to payment.

This distinction is becoming critical. Recent Fairer Finance data shows claims satisfaction across major insurance lines has reached its highest level since 2019. Within the data, pet insurance remains one of the strongest categories for overall trust and claims performance. This fact tells us something important. When customers experience a positive claims event, trust will often increase. That is because an insurance claim is not simply a financial exchange with customers. It is the moment when the insurer proves its value.

In pet insurance, that moment is becoming more expensive and more emotionally charged.

The latest pet claims data from Tesco Insurance shows how quickly common conditions can turn into significant financial shocks. Lameness, dental issues, weight loss, injuries and foreign body ingestion are not rare edge cases. They are part of everyday pet ownership. Yet many now generate claims running into hundreds of pounds, with some treatments regularly exceeding £1,000.

That changes the pressure on insurers. A customer may choose a policy based on price, cover level and brand trust. But their lasting impression is shaped when their pet needs treatment, the bill is high, the decision is urgent and the claim needs to be resolved quickly. At that moment, insurance stops being an annual financial product and becomes part of the care experience.

This is where the next competitive battleground in pet insurance will emerge.

The CMA’s efforts to address rising costs in the veterinary sector should be welcomed. Greater pricing transparency, clearer estimates and more visibility over treatment costs are positive developments for pet owners. They should help customers understand what they are being charged, compare providers more confidently and avoid some of the frustration that has built up around unexpected vet bills.

While most experts acknowledge that greater pricing transparency or even price caps are a good start, they are not likely to solve the underlying problem of increasing costs entirely. That is why pet insurers need to find better ways to manage the entire customer experience from pet care to payment.

For P&C carriers, the opportunity is to provide the transparency and improved communication that consumers are seeking. As pet insurance increasingly behaves more like healthcare ⎼ with frequent, repeat interactions, chronic conditions, medication, diagnostics, referrals, and preventative care, as well as ongoing relationships between pet owners, vets, specialists and insurers ⎼ improved communication is essential.

Insurers can play a more active role in creating a connected, informed and proactive care journey. By utilising a more digital, streamlined infrastructure, insurers can accelerate claims processing, identify potential fraud earlier and drive improved customer satisfaction. They can use real-time data to identify patterns earlier, support preventative care reminders, guide customers toward appropriate services, simplify claims handling, connect more effectively with veterinary networks and help policyholders understand what their cover means before they are in distress.

This is where experience becomes the differentiator. As more insurers enter the pet insurance market, competing on price alone will become increasingly difficult. Lower premiums may attract customers, but they will not sustain trust if customers feel abandoned when a high-cost claim lands. Equally, broad cover will only go so far if the claims journey is slow, confusing or disconnected from the reality of the pet’s care.

Customers will pay for confidence. They will pay for clarity. They will pay for speed, guidance and reassurance when their pet is unwell and the cost of treatment is uncertain. That requires a different technology foundation. Insurers need systems that can support real-time data exchange, rapid product adaptation, ecosystem integration and more personalised engagement. Static products and disconnected legacy processes make it difficult to serve a market where customer needs, veterinary cost and care pathways are constantly moving.

Pet insurance has earned a stronger position with customers by improving claims performance. The challenge now is to protect that progress before rising vet costs put it under pressure again.

Transparency may help customers see the cost of care more clearly. But experience will determine whether they continue to trust the insurer standing behind it.