Why pet insurance for pre-existing conditions is so difficult to find

What are pre-existing conditions

You might be familiar with the term pre-existing conditions from health insurance or travel insurance. Pre-existing medical conditions in their simplest form are medical conditions that pet suffers from – or has suffered from in the past – before you took out your policy.

The vast majority of pet insurance policies only cover you for new conditions, so finding cover for pre-existing conditions can be difficult but not impossible.

How big is the market for pre-existing?

Research from 2020 suggests that 30% of cats and dogs in the UK have at least one pre-existing conditions. This could be as many as 7.2 million cats and dogs across the nation that could be protected by this new form of cover. 

The potential for pre-existing conditions cover could be huge but currently it is confined to just a handful of providers: 

• Many Pets
• Direct Line (phone only) 
• Lifetime Pet Cover
• Petsure
• VetsMediCover
• Waggel

Why are there so few options

You would imagine that if there’s another type of insurance that could be of value to up to 30% of pet owners then all insurers would be focused on creating a product to satisfy demand. However, there a number of reasons why since the first policy became available at the end of 2019 that the products are not more widespread in the years since. We think it is a combination of the following 4 factors. 

1. No uniform/agreed approach to pre-existing conditions

Cover takes a couple of different forms so it is difficult to be able to fully and easily compare the policies available. The first approach is where you declare each condition your pet has and that you’d like covered and then after a series of related questions they’ll tell you whether those conditions will be covered. 

The second approach is one where the pre-existing conditions limit grows over time depending upon when you claim. 

These different approaches make it difficult for proper comparison and goes to show that UK insurers are coming up with their own ideas about how best to cater for the need. 

Learn more about how pre-existing conditions pet insurance works. 

2. No aggregators or PCWs have yet found a way to deal with pre-existing conditions

Due to the number of different approaches, this makes it especially difficult for price comparison sites to create a panel to easily compare the types of pre-existing cover. We know that at least 3 of the major price comparison sites have a plan to build a panel for pre-existing conditions to cater for the need, but at present it appears that there are a no imminent updates on this front. 

3. No incentive for bigger insurers with bigger books to encourage switching away from them

If we look at those companies offering pre-existing cover then they tend to be younger, smaller brands. One reason for this is that offering pre-existing cover is an incentive to switching provider and that’s what makes it such an attractive proposition for smaller brands looking to grow their policyholders.  

On the other hand, larger brands don’t really benefit from advertising the fact that their existing policyholders could find cover elsewhere. 

4. Nimbleness of insurers

Finally, we need to consider the types of businesses that insurers tend to be. The more established insurers are bigger and have complex systems that often take a long time to build new products, documents and operational information. The lack of speed that tends to plague bigger insurers gives an opportunities to these smaller brands to take advantage whilst these larger insurers take more time to reach a similar point. 

What does the future hold

We expect that more pre-existing conditions will come in to the market and expect this to be driven by two main factors: 

• Increased pressure from the FCA
• The progress made by price comparison websites in finding a solution to aggregation

The FCA initially kick started the pre-existing conditions cover by requesting that pet insurance find a way to deal with this growing problem. We know it is an issue that they are keen to see solutions for and as they continue to push hard for change, eventually more providers will be able to provide more effective resolutions. 

Secondly, as technology improves and perhaps a level of standardisation of the product is reached then price comparison becomes much easier. Price comparison websites play a huge role in the success of any pet insurer and is often the biggest sales channel for pet insurers, particularly for those that compete more on price like HealthyPets, PetProtect and Animal Friends. So if there is extra capacity available through aggregators we would expect to see more insurers looking to get their products featured. 

The best pre-existing conditions cover on the market

As we mentioned above, solutions for pre-existing cover are limited to 6 suppliers. Based on our research the best fully medically underwritten policies – those where you need to fully declare your pet’s health conditions – can be found with Petsure. Whilst the best moratorium policy – where the limit for pre-existing conditions grows over time – is with Many Pets.