Pet owners face insurance blow
Insurance company’s review will mean double whammy increase in premiums
Southern Cross is set to raise the premiums for its pet insurance, hitting owners with a double whammy from its annual review and a change to its ageing pet policy.
The insurer, which covers 29,500 pets, said it had been updating premiums since December based on an annual review which assessed its ability to cover future claims.
Grant Sanders, head of operations at Southern Cross Pet Insurance said: “Each year Southern Cross Pet Insurance [SCPI] has its premium rate structure reviewed by an independent actuary to ensure premiums are sufficient to cover the 29,500 pets we look after.
“Since 1 December 2018, we have been updating premiums for our PetCare policies to more accurately reflect the risk of the treatment pets might require.”
Sanders said the changes would kick in on the anniversary of a policy renewal with 79 per cent of PetCare customers seeing a premium increase of less than 10 per cent.
But on top of that the company has also changed the way it charges based on age which will increase the premium every year as pet ages.
Sanders said previously it had applied a standard premium to dogs of the same breed up to the age of six and up to the age of eight for cats.
“At that point pet owners were experiencing a sharp increase in premiums. It also meant that premiums for some pets were effectively cross-subsidising those of older animals who were more likely to need treatment.”
Sanders said it had now introduced an ageing factor to premium increases which means the cost will rise more gradually over time.
“Customers with these policies will now see more gradual increases in premiums for their pets from age one to 15, rather than the previous increase when they reached six or eight.”
He said annual premium increases would now be driven by the two factors — any rate card increase and the age increase of the pet.
“The two factors are compounded to give the total increase for each individual pet.”
Southern Cross was also updating premiums for some dog breeds to better reflect their claims costs.
Premiums for Bull Terriers and French Mastiffs will increase, while those for Fox
Terriers will decrease, he said.
Southern Cross has also been under fire in recent weeks for increasing its health insurance premiums.
One couple was upset after being told their premiums would rise by $595 a year — an increase of 20 per cent.
At its AGM in December last year, Southern Cross noted that it was increasing premiums for a number of reasons — most notably members claiming more benefits.
To counter this, Southern Cross increased the average premium for each age group by about 6 per cent last year.
A Southern Cross spokeswoman told the Herald that there would be further increases this year.