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Property or family? Life, non-life insurers clash over pets
A model promotes Samsung Fire & Marine Insurance's pet insurance in this file photo. / Courtesy of Samsung Fire & Marine Insurance
By Park Jae-hyuk
By Park Jae-hyuk
Non-life insurance companies have expressed concern about the envisioned revision of the Insurance Business Act, as pet insurance may be categorized as “the third insurance” that guarantees compensation for losses from illness, injuries and nursing of “people.”
The attempt has aroused controversy over the classification of pets which are more often referred to as “companion animals” here.
Non-life insurers have claimed the revised bill goes against the nation's current legal system which regards animals as “property.”
Rep. Kim Byung-wook of the ruling Democratic Party, however, said he proposed the bill to ensure rights of pets that have already been regarded as family members in some Korean households.
“Although companion animals have already been recognized as family members ― not just pets ― and concerns have grown over animal rights, the nation's laws and systems have yet to be prepared for the trend, so I proposed the bill,” the lawmaker said.
If his bill passes, life insurance companies will be able to sell pet insurance policies.
As life insurers have suffered from worsening business conditions recently, pet insurance may become a new source of income for them
According to the General Insurance Association of Korea, the size of the pet insurance market reached 1.2 billion won ($1 million) in 2018, up from 300 million won in 2013.
In this regard, General Insurance Association of Korea Chairman Kim Yong-duk has encouraged non-life insurers to develop new pet insurance products as the market has high growth potential.
“The growth potential is very high for the market for pet insurance targeting 8.9 million households owning pets,” he said in his New Year's message. “Insurers should make efforts to develop new pet insurance products.”
The government has also supported nurturing businesses related to pets.
Life insurers said they will wait and see whether the revised bill is passed or not.
“If a social consensus is formed and the revised bill is passed, we will have to make a move,” a Korea Life Insurance Association spokesman said.
In contrast, non-life insurers indicated they are uncomfortable about the revised bill.
“All Civil Law, Criminal Law and the Insurance Business Act defines animals as property,” a non-life insurance industry official said. “The revised bill will not be passed easily, because it is contradictory to the current legal system.”
In Korea, the first pet insurance was introduced to the market in 2007 by Hyundai Marine & Fire Insurance.
Although there are seven non-life insurers selling the insurance, only 0.1 percent of pet owners hold pet insurance policies, because of the tricky subscription process, high insurance premiums and complicated insurance claim procedures.