SEOUL, Nov.16 (Korea Bizwire) – The number of pets in Korea is increasing with an increase in the number of one or two-person households, but the pet insurance market that provides for them is still small.
Researcher Kim Se-joong of the Korea Insurance Research Institute reported that even though the number of pets reached 10 million in 2012, only 0.1 percent of their owners had taken out insurance policies for them. Kim pointed out that the pet insurance market is not coping with the increasing quantity of pets.
As the current portion of one or two-person households is 52.7 percent, and is expected to exceed 70 percent in 2035, the pet market is predicted to continue its steady growth.
Even so, the reason that the pet insurance market is not expanding is because loss ratio management is difficult because of the moral laxity of some owners and veterinary clinics.
“Before, insurance companies were active in launching insurance for pets. But they had to get out of the business because they couldn’t bear the high loss ratio,” said Kim, commenting on the phenomenon.
Because strict registration and management weren’t carried out, some owners received insurance money using another pet that looked similar, or took out insurance policies using a fake age. Veterinary clinics were also complicit, with some over-providing medical procedures.
As a result, only a few insurance companies including Samsung Fire Insurance and Lotte Insurance have insurance plans for pets, and they made only 1,641 sales combined last year.
However, Kim predicts that loss rates could become easier to manage due to the practice of animal registration, and maturing consumer awareness.
Kim suggested that insurance companies should set up a plan to manage their loss ratio, and make efforts to strengthen advertisements about their plans since the market is expected to grow.
Kim also suggested that new features should be added such as liability for damages or travel security.
By Kevin Lee (email@example.com)