The Competition and Markets Authority's (CMA) reforms to the UK veterinary sector are set to reshape the pet insurance market but are unlikely to result in lower premiums, Defaqto has warned, even as rising treatment costs continue to squeeze consumers and insurers alike.
The CMA's own investigation found that average veterinary prices have risen by more than 60% since 2016, feeding directly into claims inflation. Based on 2025 figures, UK pet insurers pay out over £1.23 billion in claims annually – a figure that has doubled over the last decade – with the average claim standing at around £668 to £685.
Corporate consolidation has been a key structural driver: the Royal College of Veterinary Surgeons notes that the top six corporate groups now own around 56% of UK practices, limiting competitive pricing across many regions.
The CMA published its final report in March, setting out a package of measures including standard price lists for common services, mandatory written estimates for treatments likely to exceed £500, and prescription fee caps set at £21 for the first medicine and £12.50 for any additional medicines on the same prescription.
A price comparison website will also be launched through the RCVS's Find a Vet platform, making pet insurance shopping decisions more cost-informed for consumers.
The CMA has until Sepember 23 to issue legally binding Orders, with most remedies expected to take effect within a further three to 12 months thereafter. Smaller practices will be given additional time to comply. In practice, the majority of consumers are unlikely to feel the full impact before the second half of 2027.
Despite the reforms, Defaqto cautions that meaningful relief on premiums remains unlikely. Stephen Kennedy (pictured above), director of Defaqto's Market Pricing Business, said that while capped prescription fees should ease certain day-to-day costs, "these reforms are unlikely to materially reduce the overall cost of veterinary care."
In many cases, he added, "the changes will simply redistribute costs rather than remove them." Greater pricing transparency, he warned, is likely to "drive continued demand for comprehensive insurance cover, which in turn could place upward pressure on premiums."
That tension is already visible in market data. Lifetime pet insurance premiums ended 2025 down 1.6% year on year even as veterinary costs continued to rise – a combination Defaqto has characterised as a growing strain between competitiveness and long-term profitability for insurers heading into 2026.
Improved access to standardised pricing data, Kennedy suggested, may enable underwriters to refine models around geographic and provider-specific cost variations – pointing towards "more sophisticated, data-driven pricing strategies" rather than lower premiums.
The CMA's reforms, Defaqto concludes, will ultimately deliver "a more complex and data-rich pricing environment for insurers, rather than a meaningful reduction in the cost of cover."
