Animal lovers could save 20% on their pet insurance bills by fitting their dog with a GPS collar that tracks its movements.

A microchip will record how much exercise the dog gets, sending the data to the owner’s smartphone – and to their insurance company.

Owners who follow exercise guidelines for their dog’s breed will qualify for lower monthly premiums and perks such as healthy dog biscuits.

Insurer More Than is bringing in the technology to combat rising pet obesity, which means bigger vet’s bills and more expensive insurance. 

One in three insurance claims for pets is related to obesity, the insurer said.

And should man’s best friend get lost, the GPS system will be able to track him down. Matthew Poll, of More Than, said owners could save 10 to 20 per cent – or hundreds of pounds over a pet’s life.

The average annual policy for a German shepherd costs £271, More Than said.

A 20% discount would equate to £50 a year, or £600 over an 11-year lifespan.