Pet Insurance indefensable increase in premiums

Money Health Insurance
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I took out top pet insurance cover with Knose Pet Insurance when my labradoodle was born and until now I have been extremely happy with it and recommended it to others. This year however, my view has changed; the increase to my annual premium was an unjustifiable 95% and as a result of the interactions that followed, I have lost confidence in Knose as a provider. Below is a chart detailing the % increase cost to the policy over the last five years.

Year Premium Annual % Increase
2026 $ 4,094.76 95%
2025 $ 2,099.04 25%
2024 $ 1,679.16 25%
2023 $ 1,343.40 40%
2022 $ 959.55 25%
2021 $ 767.70

My dog does not have any serious medical conditions and has not had any surgical procedures. She does have minor allergies and complaints that are common for her breed. When I queried the 95% increase in premium I recieved the following response from the insurer:

Since H’s Policy commenced in January 2021, it benefited for several years from premiums that were below the prevailing market rate for comparable cover. As veterinary costs and claims experience have increased over time, it has not been possible to continue offering that reduced pricing at renewal.

While we understand the perception that the premium increase was unjustified, given that H has not had any major surgeries or severe medical conditions that would warrant a substantial increase, Harlow’s policy pricing does reflect ongoing, lifelong conditions such as General anxiety, Pruritus, Conjunctivitis or Eye infection, and Anal gland impaction/expression.

In addition to H’s individual claims history, the risk profile for H’s breed has increased significantly since 2021 when her policy was purchased. An increased risk profile can be due to factors such as a higher representation of the breed in insurance claims data and increased veterinary costs associated with the breed’s known health risks.

The cost associated with the Optional Extras Package, which Harlow’s policy holds, has also increased in recent years, due to significant advances in available veterinary treatments for Behavioural Conditions, Dental Illness and Specialised Therapies. While we welcome advances in veterinary care due to the positive impact they have on our pets’ well-being, the costs associated with these treatments have a flow-on impact on Pet Insurance premiums.

When I reviewed the comparable policies of alternative pet insurers the issue I came up against was that all of them qualify her allergies and minor complaints as pre-exisiting illnesses (which is understandable) and in most cases these were automotically excluded from cover. So as a consumer that puts me between a rock and a hard place. My only option to retain the same cover and reduce the cost of my current policy was to take out an annual excess. Which I did. However, when I asked what the new premium would be with a $100 annual excess, the first customer care consultant I spoke to at Knose verbally quoted a monthly cost of around $237 ($2,844 pa). I took a day to consider it, and then called back. The second customer care consultant I spoke to then provided a written quote of $274.62 ($3,295.44 pa).

I accepted the written quote as I had no written record of the verbal quote, only to find that the monthly payment was deducted at the higher 95% increased rate of $341.23 ($4,094.76 pa). When I complained to Knose I received correspondance from yet another custormer care consultant who told me that it was an issue with their IT system, but that the quote of $274.62 per month I received was incorrect and it should have been $307.61 ($3,691.32). They agreed to honour the written quote they provided.

This experience raises several issues I would like to see addressed:

  • Pet insurers should have to disclose the average cost of premiums for a particular breed over a period of the preceding 5 years so consumers can make informed choices
  • When Choice reviews policies that information should be referenced and the issue of pre-existing illnesses as they pertain to changing pet insurance should be highlighted
  • There should be limits set on the annual increase of pet insurance policies so consumers are protected

I’d be interested to hear of others experiences and thoughts on what can be done moving forward………

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Hi @RosT, welcome to the community.

The issue of escalating pet insurance premiums has been raised a number of times in the community. My understanding is as a pet ages, the likelihood of a claim against the pet insurance policy increases, so insurers correspondingly increase their premiums to reduce their own risks.

They also operate differently to health insurance, which many often think is a direct comparable insurance cover to pet insurance.

It will get to a point where the cost of a premium will turn most consumers off taking continued cover. Maybe this is something that insurers are trying to so with the premium increases with a pet’s age, as it reduces their own exposure to claims which exceed the total income generated.

In relation to setting limits for annual increase of pet insurance, I am not sure that this will work in the consumer’s favour. What will likely happen is that premiums early in a pet’s life will increase substantially, while those in later life will be reduced to try and meet an arbitrary premium increase limit. This means that consumers are likely to pay more in the longer run, especially if they chose not to insure their pets as they get older due to the higher premium costs. In such case, the insurers will be far better off.

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This type of policy increase is similar to many annual insurance policies such as funeral insurance, these all increase annually with increased risk of payout.

In November 2024, Pacific International Insurance Pty Ltd (the underwriters for Knose) had to agree to a $10 million capital increase requirement imposed by APRA as there were identified fundamental deficiencies in Pacific’s oversight and control of its existing binder holder business and risk management framework. These included weaknesses in accountability and adequacy of resourcing.

While this is prudential outcome is slightly older than the increase you have seen, combined with annual risk increases, this may be part of the reason that premiums have risen. Pacific’s management have committed to improving their oversight and this may have also increased ongoing costs for them and further led to increased policy costs.

While this may not answer your requests for the actions you want, as Pacific are overseen by APRA it may be worth raising the first and third requests with APRA. There is no guarantee that APRA will consider these requests about the pet insurance industry, though your feedback may help make changes to the way the industry operates. Some of the information you are requesting may also contain commercially sensitive information and would therefore not be disclosed publicly.

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Thanks for your reply graholl - interesting insight into the backstory and I will look into raising those issues with APRA :slight_smile:

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Thanks phb. Fair points - I do think many people are already moving away from insuring their pets. I have no issue with an annual premium increase - it’s the 95% I find unreasonable. For me the most important thing is for consumers to understand the cost over the life of a policy before taking it out. Comparisons for the initial annual cost are no guide. I’d like more information for consumers including data analysing the cost longer term.

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Large jumps in insurance isn’t unheard of. I have reported in the community our business insurance had increased over 500% for the period 2020-2025. Our business wasn’t alone. This is similar to the increases in pet insurance you have observed over time, however, our businesses risk profile hasn’t changed over the period, unlike a pet that ages.

I agree that consumers need to understand the true cost of a policy over time. Choice does raise the costs of premiums under ‘cons’:

Possibly something consumers need to understand is that for pet insurance, premiums escalate as the pet ages, as the risks to the insurer also increase. That being, a puppy’s premium will be significantly less than other premiums as the dog ages.

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