Pet Plan founder negotiates sale to Swiss insurer

Patsy Bloom, millionaire founder of the Pet Plan animal insurance company, is negotiating to sell the business to Churchill, part of the Swiss insurer Winterthur.

It was unclear whether the former UK businesswoman of the year, who started the firm with just pounds 500, wanted to sell all or part of the company.

But her colleague and co-founder, chairman David Simpson, yesterday confirmed that talks were at an advanced stage. "We think a deal would benefit the company, but we are not saying any more at this point," he said.

Ms Bloom and Mr Simpson put pounds 250 each into the project in 1977, and have grown Pet Plan into an international company with a turnover of more than pounds 32m and 200 employees.

Churchill, like many high street insurers, is facing pressure on margins as competition hots up, particularly in the motor insurance market. The firm is thought keen to diversify into other areas, though it would only confirm yesterday that talks were under way.

Ms Bloom, 55, thought to live alone with her Yorkshire terrier in London, had the idea for a pets insurer after her animal fell ill and she faced large veterinary costs. A former advertising executive, she once said that although she knew nothing about insurance, she knew how to sell an idea.

Ms Bloom and Mr Simpson are the only shareholders in Pet Plan and they stand to increase their wealth substantially if the business, which made profits of pounds 1.2m last year, is sold.

Pet Plan is now the UK's biggest animal insurance company with about 42 per cent of the market, and it is the leading insurer of horses. But the company only has an estimated 400,000 policies. With about 6.5m dogs and 5.3m cats in 12m UK households, there is a potential huge market for an insurance company like Churchill to aim at.

Other large insurers are already getting in on the act and Premium Search, the direct insurance company, recently launched a policy which it claimed was cheaper than Pet Plan.

The cost of insuring a cat starts at around pounds 40m a year, and about pounds 60 for dogs. The premiums are normally to cover vets fees, though some policies pay out for boarding and even lost animals.

Pet Plan has paid out on dogs that nearly drowned, a cat that swallowed a cassette tape, and another that ate a frog and got mouth ulcers.

For a dog with a broken leg a policy pays around pounds 500, against pounds 1,000 for a human. And a pacemaker for a dog is only about pounds 500, compared to more than pounds 5,000 for a man or woman.