Pet Ownership Increasing... But Insurance Enrollment Remains at Only 0.8%

Insufficient Development and Supply of Differentiated Products
"Institutional Foundation Must Also Be Established"

[Asia Economy Culture Young Intern Reporter] The population raising companion animals in South Korea is 15 million, meaning one out of every three people owns a pet. However, the pet insurance subscription rate is reported to be less than 1%.

On the afternoon of December 9 last year, visitors are seen browsing pet supplies at the "Christmas Seoul Pet Show" held at SETEC in Gangnam-gu, Seoul.
[Photo by Yonhap News]

On the 10th, the Korea Insurance Research Institute announced in its report "Current Status and Challenges of the Pet Insurance Market" that as of October last year, the domestic pet insurance subscription rate was only about 0.8%. This is very low compared to other countries such as ▲Sweden 40% ▲United Kingdom 25% ▲Norway 14% ▲Netherlands 8%.

The Insurance Research Institute mentioned that the low pet insurance subscription rate relative to the pet population is due not to the burden of insurance premiums but to insufficient development and supply of differentiated insurance products and institutional problems. According to the report, due to advances in medical technology, the lifespan of companion dogs has increased, and the proportion of elderly dogs requiring expensive medical treatment has risen, with 82.9% of consumers responding that veterinary treatment costs are burdensome.

Currently, pet insurance companies find risk management difficult, resulting in insufficient development and supply of insurance products. The top five insurance companies dominate most of the market, making product differentiation challenging. Most products cover surgery and hospitalization/outpatient care for pets, and there is little differentiation except whether skin, oral, and dislocation diseases are included as basic contracts or special contracts.

Voices also point out institutional shortcomings. There is a lack of institutional infrastructure to alleviate information asymmetry among insurance policyholders, insurers, and veterinary hospitals, such as pet registration, standardized treatment systems, and computerized claim systems. Additionally, it is difficult for new entrants like small-amount short-term specialized insurers to enter the market.

Kim Kyung-sun, a research fellow at the Insurance Research Institute, mentioned that the implantable registration rate for pet identification when subscribing to pet insurance remains stagnant at around 50%, and the non-standardized treatment cost system causes significant cost variations among hospitals. She suggested, "It is necessary to consider allowing pet registration through biometric authentication such as nose pattern recognition and to organize the animal registration management system to facilitate smooth pet identification."

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