The UK pet insurance market is predicted to reach a value of almost £700 million by 2012.

The pet insurance market is one of the fastest growing insurance markets in the UK and is set to expand further, according to a new Datamonitor report.

Having spent many years as a niche product, this nation of animal lovers has gradually embraced pet insurance as a mainstream product , with a diverse and varied distribution network that includes direct insurers, retailers and vets.

In 2007, total premiums in the UK pet insurance market grew by almost 17% to a record £440 million.

The key driver behind the premium income growth has been the steady increase in the number of people insuring their dogs and mogs: 26% of pet owners had insurance cover for their furry friends by the end of 2007.