Insurers race to increase subscriptions in Korea's underinsured pet market

A volunteer holds a shelter dog waiting for adoption at Banryeo Maru in Hwaseong, Gyeonggi Province, March 23. Yonhap

Choi Kwang-soon, whose Shih Tzu is about to turn 15, hesitated before opening the bill. Caring for a dog with an aging heart already meant steady monthly spending on medication and checkups. But this time was different.

Her dog had undergone surgery to remove a cancerous adrenal gland, and by the time the procedure and hospital stay were over, the cost had climbed to nearly 8 million won ($5,400).

But she had no pet insurance.

“A decade ago, pet insurance wasn’t something people talked about. I didn’t even know it existed and there were barely any products available,” Choi said. “If I had known earlier, I would have signed up. You pay a small amount upfront, and it saves you from these overwhelming expenses later.”

In Korea, the number of pet owners reached 15.46 million in 2024, roughly 30 percent of the population. Yet despite the surge in ownership, enrollment remains low, with only 1 to 2 percent of households signed up.

But as veterinary bills climb, so too does interest in such policies. According to a KB Financial Group report, households that sought medical treatment for their pets spent an average of 1.46 million won in 2025, double the level seen in 2023.

In a race to meet this growing demand, insurers are rolling out a broader range of plans.

As advances in veterinary care and nutrition extend lifespans, offerings that effectively provide lifelong protection are beginning to emerge.

In March, Kakao Pay Insurance launched a plan that reimburses up to 40 million won in annual medical expenses. It can run for up to 20 years, with monthly premiums starting below 10,000 won.

“Our services are integrated into KakaoTalk and Kakao Pay. So while many digital insurers spend heavily on marketing to attract users to their standalone apps, we already have millions of users on our platform. We’re channeling those savings into better offerings,” a company official said.

Some providers are also raising the age limit for new subscribers. While policies were once largely restricted to animals under the age of three, products from Meritz Fire & Marine Insurance, Samsung Fire & Marine Insurance and NH Property and Casualty Insurance now accept pets up to age 10.

KB Insurance, meanwhile, became the first in the industry to introduce a rider for funeral expenses in 2024 and has recently expanded benefits to include treatments such as cancer care and rehabilitation.

These moves are part of a wider push by insurers to gain ground in what remains a largely underpenetrated market. The animal health care sector is projected to grow from 2 trillion won in 2024 to 3.3 trillion won by 2027, according to the Hana Institute of Finance.

With enrollment below 2 percent, market insiders say the sector has significant room for expansion. Distribution has also evolved; once sold primarily through agents, these plans have increasingly shifted to online channels since the late 2010s, helping drive a gradual uptick in uptake.

At the same time, insurers have long struggled to manage loss ratios, in part because veterinary fees are not standardized. “From the insurers’ perspective, that made cost control difficult,” one official said.

Recent regulatory changes, however, have begun to ease those concerns. Authorities now require a minimum 30 percent co-payment and have moved toward annual renewals — steps that have made risk management a bit more predictable.

“With those changes in place, companies now see the segment as more viable,” the official noted, adding that insurers are responding by broadening their offerings.