Korean Re notes potential growth of pet insurance amid low uptake

Whilst there is a growing demand for pet insurance in Korea, only 11.9% of households with pets availed of insurance.

Korean Re said the growth of the pet insurance market in Korea depends on the efforts of insurers, coupled with government-led initiatives to encourage more “pawparents” to avail of the service amid low uptake.

“The future growth of the pet insurance market will be dependent on the efforts of the insurers, particularly in alignment with government-led initiatives to promote pet insurance,” Korean Re said in the January - March 2024 bulletin.

Citing a survey by KB Financial Holding Business Management Research Institute, Korean Re said that only 11.9% of households who have pets purchased pet insurance. This was despite 89% of them knowing that such a product exists. 

The poll, which involved 1,000 respondents, also said that 27% said they needed the service, but many also said “pet insurance leaves a lot to be desired,” the report noted.s

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“Most cited low coverage levels (high deductibles), limited scope of coverage, and high premiums as areas where improvements are needed,” it added.

Despite this, Korean Re noted the country’s pet insurance market has grown rapidly, with pet premium income increasing from KRW1.1b in 2018 to KRW44.3b in 2023. In-force policies during the same period also grew from approximately 7,000 to 11,000 policies, it added.

For the part of the Korean government, it has formulated a plan to boost the pet insurance market which includes the establishment of an insurance infrastructure related to animal medical care, improvement of consumer convenience, development of customised products for pet insurance, and allowing the entry of insurance companies specialising in specific lines of business such as pet insurance.

Korean Re said pet insurance is currently offered based on tariff rates from the Korea Insurance Development Institute and rates based on an insurer’s own experience. 

“The availability of reliable data is essential for market growth and product development. Until sufficient statistical data is accumulated within the industry, it may be helpful to use rates and coverage conditions offered by reinsurers and take advantage of their capacity,” Korean Re said.