The UK pet insurance market has shown signs of stabilisation in the third quarter of 2025, with average premiums experiencing a modest rise after several months of correction.
According to the latest Pet Insurance Pricing Index from Pearson Ham Group, premiums increased by 0.9% in Q3 compared to Q2, indicating a return to gradual growth following declines earlier in the year.
Month-on-month data revealed a steady upward trend, with average premiums climbing by 0.3% in July, 0.4% in August, and 0.2% in September.
Lifetime Cover Remains Stable
Despite the modest increase in Q3, Lifetime policy premiums have risen by only 0.7% year-to-date, showing limited recovery since the start of 2025. On an annual basis, premiums are still 3.5% lower than in autumn 2024, a reflection of the lingering impact of last November’s sharp 4.5% market correction.
Policies that offer higher veterinary fee limits continue to show the largest annual reductions. Products providing £3,000 or more in cover have seen premiums drop by around 11% year-on-year, compared to smaller changes in lower-limit (£1,000) policies.
Pricing trends also varied by product type in Q3. Time-limited and Maximum-Benefit policies displayed greater volatility in quoted premiums, while Lifetime cover pricing remained more consistent, bolstered by a wider range of brands and ongoing competition through comparison aggregators.
Cat Insurance Recovers, Dog Premiums Remain Soft
In Q3, premiums for pets of different ages converged, following previous declines in rates for animals aged four to six.
Across species, both cat and dog insurance premiums saw declines over the past year. However, cats experienced a stronger recovery in Q3, with the pricing index rising to 0.99 compared to 0.96 for dogs. This suggests that competitive pressures have eased more in the cat segment, while dog insurance pricing remains relatively subdued.
At the breed level, the most significant annual reductions were recorded for mongrels and moggies, which make up a large share of insured pets and thus have a broad influence on the market. In contrast, crossbreed premiums saw a modest 1% increase, indicating greater selectivity and differentiation in pricing.
Market Stabilisation and Pricing Sustainability
Frances Luery of Pearson Ham commented on the findings, stating that the modest increase in Q3 is indicative of a stabilising market after the steep corrections experienced last year. While Lifetime products remain highly competitive, continued volatility in Time-Limited and Maximum-Benefit cover reflects the impact of product availability and brand participation.
Luery added that the alignment in pricing across age groups and regions shows that insurers are refining and recalibrating their pricing models. However, the ongoing challenge remains balancing competitiveness with sustainability, especially in areas where claims costs are unpredictable.
Pricing Discipline and Cost Pressures into 2026
Looking ahead to 2026, the pet insurance market is expected to face ongoing pressure from rising claims costs, particularly due to veterinary inflation and increasingly complex treatments. With more pet owners claiming for long-term and chronic conditions, insurers are likely to continue exercising caution in their pricing and risk selection.
While competition among major insurers is expected to prevent rates from rising sharply, the need to maintain underwriting margins may limit any downward movement in premiums.
For brokers and comparison aggregators, a stabilising rate environment could lead to greater pricing predictability and potentially increase consumer engagement, especially as affordability remains a concern.
Overall, Pearson Ham’s data suggests the market is entering a phase of measured correction, where insurers will need to balance growth opportunities with the need for pricing discipline and profitability.