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FSC to announce measures to boost pet insurance market in Oct.
By Anna J. Park
With the increase in pet ownership and pet insurance products in the country, the number of pet insurance policy contracts rose significantly during the first half of this year.
Pet insurance provides coverage for expenses incurred when a pet becomes ill. Eleven insurance firms are currently selling pet insurance plans.
According to the insurance industry on Wednesday, the aggregate number of pet insurance policy subscriptions held by the 11 firms as of the first half stood at 87,911, a 22.3 percent jump from the same period last year.
The 11 insurers received a total of 21 billion won ($15.7 million) in premiums from pet insurance holders during the first half, a similar amount to the total annual premiums of 21.3 billion won that insurance companies received from the policy-holders in all of 2021. Last year's entire annual premiums reached 28.8 billion won.
Despite the recent increase in insurance plan sales, only 1.1 percent of the 7.99 million pets in Korea are insured. It is an improvement, as the rate was only 0.4 percent in 2020 and 0.9 percent last year.
The percentage of insured pets is much lower than in other countries, such as 40 percent in Sweden, 25 percent in U.K. and 2.5 percent in the U.S., according to figures by the Korea Insurance Research Institute (KIRI).
Market insiders attribute both the lack of veterinary treatment and public awareness of pet insurance to the low penetration of pet insurance policies in the country. The insurance industry pointed to the lack of standardized animal medical fee systems, treatment codes and veterinary medical expense data as the main obstacles to further growth in the market. This lack of a standardized system has been a challenge to insurers in their efforts to calculate insurance premiums and management of loss ratios.
Aiming to counter such challenges, the Financial Services Commission (FSC) and other related ministries have been working on measures to promote the pet insurance market, such as seeking pet registration, streamlining veterinary medical procedures and implementing electronic billing.
As the growth of the pet insurance market is one of the policy goals set by the Yoon administration, the FSC, the Ministry of Agriculture, Food and Rural Affairs, KIRI and other institutions launched a taskforce team last September to develop measures for boosting the market. It is expected that the FSC will unveil new measures in October.
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