The furry customer base of Southern Cross Pet Insurance (SCPI) has grown to over 65,000 since the company’s entry into the pet insurance market 13 years ago.
SPCI is a subsidiary of the Southern Cross Health Society. Southern Cross Health Insurance holds around 60% of the health insurance market.
McPhail said pet insurance had been on Southern Cross’ radar going back 20 years. The insurer regularly surveyed its members to see what insurance products they’d be interested in seeing from Southern Cross and pet insurance featured “quite strongly”.
McPhail described it as a “natural fit” for the Southern Cross brand.
“When the opportunity presented itself a few years later, it seemed like a good category to get into and support,” he said.
Southern Cross bought Ellenco Pet Insurance in 2012 which had 8,000 policies and rebranded it to Southern Cross Pet Insurance in 2014.
Since then, SCPI’s policy base has grown to over 65,000, helped by a 25% growth spurt starting in 2021 which McPhail said was driven by the Covid-19 pandemic.
“Lots of people decided to get pets in that period, because of the psychology of, you know, not traveling overseas, being at home, working from home more,” he said.
McPhail said those trends had increased ownership and SCPI had experienced “pretty big growth” because of it, but rising vet costs had also contributed to an increase in pet insurance levels.
SCPI started measuring rates of pet insurance in May 2022 when only 22% of pet owners in NZ had insurance. That number has now grown to 33% as of January 2025.
SCPI provides insurance for only cats and dogs, with 67% of SCPI’s insured pets book comprising dogs compared to 33% cats.
Broken down, that's 43,918 dogs and 21,516 cats.
According to SCPI data, the most popular breeds insured with the pet insurer are labrador, cavoodle, mini schnauzers, golden retrievers and labradoodles. The most popular breeds of cat to be insured are mainly domestic shorthairs.
McPhail said expanding SCPI’s insurance coverage to other companion animals was on the “possible list in the future” but the majority of SCPI’s insurance book was dogs and the business was continuing to grow in that area.
The average SCPI claim is $564.
McPhail said vet costs and vet care are costly and not subsidised the same way human health in NZ is with free public healthcare, ACC and Pharmac.
This is even though vets do many of the same sort of operations, use the same diagnostic tools and prescribe the same medications which are funded for people.
Driving the costs up are labour, inflation and the higher costs of claims.
SCPI paid out $30 million in claims in 2024 and $28 million in 2023. The amount SCPI has been paying out in claims has been rising in recent years, McPhail said.
Reasons behind SPCI customers cancelling their insurance coverage in 2024 ranged from overseas moves, pets who had died and affordability.
McPhail said some of SCPI’s customers had had to make tough choices about what they could and couldn’t afford.
“Definitely seeing more discussion in the last 18 months about options to reduce premiums or, you know, obviously some customers choosing to not insure anymore,” he said.
“So that, you know, that's pretty tough. We’ve also seen it in trends with animals being rehomed. There’s been more people contacting us to say that they can't afford to own their pet anymore and so they've had to find them a new home.”
McPhail said SCPI’s insurance premiums have generally risen in line with inflation over the past five years but that varies per customer and policy. This has meant some SPCI customers have experienced premium increases of 10% or more.
“We are hopeful that that's going to be more steady and come back down to a more longer term average. That really depends on claims and what claims are doing,” he said.
SPCI has seen “some softening” in the claims space which McPhail said was a good sign.
“We appreciate there's a reality to things going up in price. You know, as we've all experienced, it can't be forever.”
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