Korea’s insurance industry has revealed that the cumulative count of pet insurance policies held by the 11 firms in the first half of the year reached 87,911 — a notable 22.3% jump compared to the same period in the previous year.
A Korea Times report indicated that these 11 insurers garnered a total of KRW21 billion (US$15.7 million) in premiums from pet insurance policyholders, a figure closely resembling the annual premiums of KRW21.3 billion that insurance companies received throughout 2021. The annual premiums for the previous year amounted to KRW28.8 billion.
However, despite the recent upswing in insurance plan sales, merely 1.1% of Korea’s 7.99 million pets are currently insured. This marks an improvement, considering the rates were only 0.4% in 2020 and 0.9% the previous year.
In comparison to other nations, the percentage of insured pets in Korea remains substantially lower – 40% in Sweden, 25% in the UK, and 2.5% in the US, according to data from the Korea Insurance Research Institute (KIRI).
Industry insiders attributed the low penetration of pet insurance policies in the country to both inadequate veterinary treatment and a lack of public awareness regarding pet insurance. The insurance sector highlights the absence of standardised animal medical fee systems, treatment codes, and veterinary medical expense data as the primary hindrances to further market growth. This absence of a standardised system poses a challenge for insurers in determining insurance premiums and managing loss ratios.
In a concerted effort to address these challenges, the Financial Services Commission (FSC) and other related ministries have been actively devising measures to promote the pet insurance market. These initiatives encompass pet registration advocacy, streamlining veterinary medical procedures, and implementing electronic billing. The FSC will reveal these measures in October.
Elsewhere in the country, regulations regarding health insurance dependents from overseas staying in South Korea have been tightened to a minimum period of six months as a response to foreigners exploiting the system.
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