Animal Friends Insurance Services Limited · DRN-5843791

The complaint Ms S has complained that Animal Friends Insurance Services Limited mis-sold her a lifetime pet policy in 2015 What happened Ms S bought her lifetime pet policy for her pet in March 2015 from Animal Friends. In 2025, she received a renewal invitation which increased her premium from £60.36 to £129.76 per month. That renewal notification also informed Ms S that a new company had taken over Animal Friends who was also now the new underwriter for the policy. So Ms S complained. Initially the complaint was against the underwriter and that was dealt with separately. However that underwriter paid her £150 compensation. Ms S complained about Animal Friends as it was the entity which sold her the policy in 2015 and it never explained how the premium for her lifetime policy might increase to this level of premium amount. The underwriter on behalf of Animal Friends agreed that Animal Friends didn’t give Ms S enough information in 2015. Hence it felt the price increase would have caused a considerable shock which was why it paid her the £150 compensation. So it didn’t think it had to do anything more. Ms S wanted the investigator to consider the matter for her, which he did. He also thought Animal Friends didn’t need to do anything further, given the underwriter had paid the compensation instead, which he would have asked Animal Friends to do, had the underwriter not done so. Ms S remained dissatisfied and asked for an ombudsman’s decision so her complaint has been passed to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I’m not upholding this complaint. I do appreciate and understand that Ms S will be very disappointed so I’ll now explain why. I should add here that all I’m considering in this decision is how the policy was sold to Ms S in March 2015, not the extent of the premium rise which was dealt with separately by the investigator and that complaint was closed. So the issue is what should Ms S have been told when she was buying this policy in 2015 by the Animal Friends who in effect sold the policy to Ms S. First however, I need to explain that this policy and indeed other pet policies are sold on what is called an ‘unadvised basis’ given the regulations of the Financial Conduct Authority.

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This means that Animal Friends doesn’t provide any advice to any potential consumer about whether the policy is suitable for their needs. Instead it must provide all the relevant information so that the consumer can make this decision for themselves. As the investigator explained, in 2015 Animal Friends didn’t provide the right level of information about how much Ms S’ premium might rise over the course of her pet’s life. So we would have expected Animal Friends to have informed Ms S that her premiums will almost certainly increase year on year over the lifetime of her pet and that any claims she made would increase that premium even more substantially. Ms S would have also needed to be told that there was no cap on the level of these premium increases too and further that once her pet reached the specified age she would be liable to pay a percentage of the claim in addition to any excess payable too. There is no dispute that the underwriter agrees that Animal Friends didn’t explain all this to Ms S in 2015 when she was deciding to buy this policy. Instead, the information Ms S was given was all about the considerable advantages of buying a lifetime policy for her pet. The primary reason being that any condition her pet might develop would be covered up to the annual policy limit every single year provided that Ms S continued to renew her policy. In non-lifetime pet policies depending on which type is bought, such recurring conditions will only be covered for a specified time period like a year for example, or for a specified condition cover limit. And when the year is up or the maximum per condition pot is all used up, that condition is then excluded going forward meaning that there is no further cover under the policy for that condition. It’s clear Ms S was of the view that she wanted to buy a lifetime policy, as she renewed it every year from 2015, and she specifically chose the more comprehensive cover of lifetime cover too. It would have been impossible in 2015 for any policy administrator or seller to be able to know what the premium increases might be in 10 years’ time even if they had given all the warnings above too. Premium increases are more dynamic than that, as they are also based on the claims experience and indeed the cost of the claims depending on what treatment was advised by the vet; where Ms S lived; breed or pet specific issues which might determine the level of likely claims; cost of vet treatment; costs of the development of vet treatment which continues to develop as vet science continues to be able to treat more and more conditions successfully (rather like human medicine does); increases in the cost of living; increases in the tax payable; etc. The underwriter said Ms S made claims totalling over £4,000 since 2019. So essentially, that means all that was missing from Ms S’ buying experience of this policy in 2015 was the warning of possible exponential premium increases as time went by and as her pet got older and more claims were then made. I also consider Ms S would have likely bought this cover had she been more aware of the premium cost given it was clear she was choosing this level of comprehensive cover rather than time or condition limited policies. The point to remember is that any alternative lifetime pet policies at that time or since aren’t and weren’t capped either. The premiums Ms S paid did provide the cover she was entitled to along with the payment of almost £4,000 in claims to include vet treatment and medication. Therefore she hasn’t lost out financially in that regard. The fact is that Ms S now believes the premium she is being asked to pay is simply unaffordable, which meant she cancelled her policy and found alternative cover which doesn’t cover pre-existing conditions so any ongoing medication costs or recurrence of any pre-existing condition is now not covered. However in her first complaint against the underwriter, there was no error in the calculation of that premium given it was calculated in accordance with the underwriting guide so Ms S wasn’t treated any differently to anyone else in similar circumstances. Sadly, this service has no authority to tell

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any insurer what premium they should charge their policyholder. That is not within our authority or remit. The underwriter paid Ms S the sum of £150 compensation solely for the distress element of the premium increase since Ms S wasn’t told something like this could happen when she first bought the policy in 2015. So the compensation is solely for that only. It’s not compensation to ally the amount of the increase she had to pay or to compensate her because she can’t afford to keep the policy going, it’s merely compensation for the shock of the premium increase. As the underwriter has already paid Ms S the compensation I would have asked Animal Friends to pay, I consider this amount, as it’s in line with our approach on these matters, is therefore fair and reasonable. Therefore I don’t consider Animal Friends needs to do anything more here. My final decision So, whilst I do appreciate Ms S will be disappointed, it’s my final decision that I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Ms S to accept or reject my decision before 22 April 2026. Rona Doyle Ombudsman

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