Data from Defaqto’s latest pet insurance pricing index shows that the average top-five prices for lifetime cover was down 1.8% in Q2. Premiums dropped by 2.3% in both May and June, although they then increased by 2.8% in June. Lifetime premiums are 6.4% lower than they were at the start of the year and 7.8% lower than this time last year.

Premiums for policies that offer higher levels of veterinary fee cover rose in Q2. Those providing at least £5,000 veterinary fee cover rose by 1.7% over the quarter, but remain 5.9% lower than a year ago.

Frances Luery, product manager at Defaqto, said: “Pet insurance prices continued to fall overall during the second quarter, but June marked a clear change in direction. A 2.8% monthly increase does not establish a new trend on its own, although the breadth of the movement suggests that some insurers are beginning to respond to the growing gap between premiums and veterinary costs.”

She added: “We expect pricing to remain competitive, but further selective increases are likely during the second half of the year as insurers seek to balance affordability with the sustained rise in veterinary and claims costs.”