Pet Insurance premiums edge up in Q3 as market steadies after early-year declines

The latest Pet Insurance Pricing Index from Pearson Ham Group for Q3 2025 shows that UK pet insurance premiums rose modestly in the third quarter of 2025, increasing by 0.9% compared to Q2. This marks a period of slow but steady growth, following earlier declines in top quoted premiums during the first half of the year.

Month-by-month data suggests a gentle upward trend through the quarter, with premiums rising 0.3% in July, 0.4% in August, and 0.2% in September.

Lifetime Cover – Year-to-Date and Annual Trends
Despite the uplift seen in Q3, Lifetime premiums remain only slightly above where they began the year, standing 0.7% higher year-to-date.

On a 12-month view, however, premiums are still down -3.5% compared to last autumn. Much of this longer-term decrease reflects the sharp market correction observed in November 2024, when average prices fell by 4.5% in a single month.

Differing Movements by Cover Level, Product Type, and Breed
Premium movements continue to vary depending on cover limits. Over the past twelve months, policies offering higher levels of veterinary fee cover have seen the most pronounced reductions in top quoted prices. In particular, premiums for products providing £3,000 or more of cover have fallen by around -11% year-on-year, compared with far smaller movements in lower-tier £1,000 cover limits.

The relationship between product type and pricing has also remained evident in Q3. With Time-Limited and Maximum-Benefit policies offered by fewer insurers, top quoted prices in these segments have continued to display a more volatile pattern. This contrasts with the Lifetime segment, where a broader set of brands and a greater focus on aggregator competitiveness have contributed to steadier pricing trends over time. As a result, Lifetime remains the most closely contested product category, while more selective underwriting appetite drives variability elsewhere.

Age, type and breed
When examining price movements by age of the insured animal, Q3 saw a convergence between pricing for different age brackets. This follows a period in Q2 where premiums for animals aged 4 to 6 years experienced more pronounced decreases than other age groups.

Comparing cats and dogs, both have seen quoted prices fall over the past year. However, cats experienced a stronger rebound in Q3, with their average pricing index rising to 0.99 compared to 0.96 for dogs. This suggests that competitive conditions for cat insurance have tightened slightly more in recent months, while pricing for dog insurance remains somewhat softer.

Looking at breed, the most significant price reductions over the past year were observed for mongrels and moggies. These represent a large share of the insured population, meaning shifts in pricing strategy for them can have broader market impact. Conversely, crossbreeds have seen a small increase in quoted prices, rising by around 1% year-on-year, indicating selective appetite and differentiation in pricing for this group.

Region
Finally, regional differences have narrowed compared to earlier quarters. While pricing strategies were more targeted by region earlier in the year, Q3 data suggests that pricing patterns are now more aligned across the UK. Over the past 12 months, reductions have been most pronounced in England, whereas Scotland, Wales and Northern Ireland have seen more moderate adjustments. This alignment points to a more unified national pricing approach as insurers work to stabilise rates after the corrections made in late 2024 and early 2025.

Frances Luery of Pearson Ham Group, said:
“This quarter’s data indicates a stabilising market. The modest rise in Q3 follows a period of downward price adjustment, particularly after the sharp correction last November. While Lifetime products remain highly competitive, the continued volatility in Time-Limited and Maximum-Benefit cover reflects the influence of product availability and brand participation.

“We are also seeing more alignment in pricing between age groups and across regions, suggesting insurers are refining and recalibrating their pricing models. The challenge now is to balance competitiveness with sustainability, especially in segments where claims costs can remain unpredictable.”

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Alicia Ward