Pets, 'Property' or 'Person'... Insurance Industry in Turmoil

Controversy Arises as Animal Insurance Classified as Third Insurance in
Proposed Amendment to the Insurance Business Act

[Asia Economy Reporter Ki Ha-young] Controversy has arisen over the identity of companion animals as a bill to amend the Insurance Business Act, classifying pet insurance as a type of insurance for humans, was proposed.

According to the industry on the 1st, Assemblyman Kim Byung-wook of the Democratic Party recently took the lead in proposing an amendment to the Insurance Business Act that classifies companion animals as third insurance.

Third insurance is insurance that covers human diseases, injuries, or related nursing care. The amendment added provisions to cover accidents occurring to animals as well. Third insurance, which has characteristics of both life insurance and non-life insurance, is considered human (in) insurance as it targets people. The types of third insurance include disease insurance, injury insurance, and nursing care insurance.

Classifying pet insurance as such third insurance changes the legal status of companion animals. Until now, animals have been treated as "objects" under the Korean legal system. The Civil Act stipulates that the possessor of an animal is liable for damages caused by the animal to others, viewing the animal as an object under the possessor's management. Also, when someone abuses another person's animal, the crime of property damage under the Criminal Act is applied. Accordingly, pet insurance has been classified as non-life insurance, meaning it covers damage to property.

If pet insurance is classified as third insurance, it means that not only non-life insurance companies but also life insurance companies can sell this insurance. Pet insurance is a market with great growth potential in the future. According to the General Insurance Association, the market size of pet insurance based on premiums increased fourfold from 300 million KRW in 2013 to 1.28 billion KRW in 2018 over five years. If life insurance companies also sell pet insurance, competition among insurers is expected to become even more intense.

A representative from Assemblyman Kim Byung-wook's office explained, "The amendment was proposed with the intention of changing the perception that animals are objects," adding, "Classifying animal insurance as third insurance means treating animals as a different form of life from humans."

This content was produced with the assistance of AI translation services.