The pet insurance market in Korea has a great deal of potential to grow considering an increasing number of pet owners and rising medical bills for their pets. Pet insurance covers unintended costs of caring for a pet. Currently, the market is worth KRW 1 billion in terms of annual premiums as of 2017, which is relatively small compared to the major markets like the UK, US and Japan. The nation's pet insurance take-up rate stands at as low as 0.02 percent, which is well below 6 percent for Japan and 25 percent for the UK. However, conditions are getting ripe for the market to grow.
The number of pet animals in Korea soared to 8.74 million in 2017 from 4.76 million in 2010, and the figure is projected to reach 13.2 million by 2027 according to a report by the Korea Insurance Development Institute. The local pet industry is growing at double-digit rates annually as pet owners are increasingly concerned about the health and well-being of their pets. There are rising sales of pet products and services including veterinary care, leading to an increase in demand for pet insurance. Increasing life expectancy of pets is another factor that boosts demand for pet insurance coverage. Injured or sick pets are getting better medical care due to advanced treatment and diagnosis tools, which give rise to higher medical costs at veterinary hospitals.
Pet registration, which makes it easier to identify pet animals, is key to the development of the pet insurance market. In 2014, Korea started to require pet owners to register their pet ownership with local governments under the animal protection law, and failure to do so can result in a fine. The number of pet registrations surged to 1.07 million in 2016 from 0.48 million in 2013. When registering, pet owners are required to attach an electronic identification tag to their animals, and the implantation of a microchip is becoming the most common way to do so.
Copyrightⓒ 2000~2015 Korean Reinsurance Company. All Reserved