Pet insurance plans to be diversified in Korea

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Insurance companies offering only pet insurance plans will now be allowed to enter the local market. Pets may soon be officially registered through their nose wrinkles or iris data. A convenient one-stop system, allowing pet owners to complete every step of the procedure ― from signing up for veterinary hospitals to claiming hospital expenses with insurers ― on a single platform, could be possible as early as next summer.

These are a part of announcements jointly made by the Financial Services Commission (FSC) and the Ministry of Agriculture, Food and Rural Affairs on Monday, with an aim to spur the further growth of the pet insurance market in the country.

According to the top financial regulator, the number of domestic pets surged by 25.8 percent over four years, from 6.35 million in 2018 to an estimated 7.99 million in 2022. Yet, the subscription rate of pet insurance plans for the 7.99 million domestic pets stood only at 0.9 percent as of the end of last year. It is a very low figure, compared to the U.K.'s 25 percent, Japan's 12.5 percent and the U.S.' 2.5 percent.

"The number of households raising pets has increased significantly with the spread of single-person households, aging population and increased interest in animal protection. While demand is growing for pets' health care, the burden of medical treatment costs remains high. Accordingly, the government plans to improve infrastructure for pet medicine and insurance, as it will push forward with boosting pet insurance markets, which is one of the incumbent administration's key policy initiatives," the FSC said.

Currently, 11 non-life insurance companies are selling pet insurance plans, but most of them are similar in coverage limits and premiums. Thus, the government aims to encourage the diverse development of customized insurance plans and new products by allowing new players into the market.

Aiming to enhance pet treatment and insurance infrastructure, registered pets will receive strengthened discount benefits. So far, only built-in chips have been allowed as a way to officially register pets, but other easier options, such as pets' biometric information, will be accepted as a registration method starting next year.

In January next year, veterinary treatment items will also be standardized, facilitating the enhanced infrastructure of pet treatment. The insurance claims process will also be improved. Currently, only animal hospitals are eligible for submission of claims for coverage to insurance companies. By the end of the first half of next year, pet owners themselves will be allowed to send medical treatment details to insurance companies and file insurance claims.