Insurance News

Costly insurance plans spell problems for poorly pets

[ad_1]

A dog being photographed at a pet fair at Kintex in Ilsan, Gyeonggi on Nov. 18. [NEWS1]

A dog being photographed at a pet fair at Kintex in Ilsan, Gyeonggi on Nov. 18. [NEWS1]

 
Kim Min-hyeong, a 39-year-old owner of a Rottweiler, recently paid 1.8 million won ($1,460) for a surgery on the dog’s toe.
 
Kim, however, got 1.3 million won back from her insurer thanks to a plan that she took out two years ago.
 
With the number of pet owners in Korea increasing, the demand for pet insurance is on the rise.
 
A total of 61,000 pet insurances were signed as of the end of September, according to Korea Credit Information Services, up 2,100 percent compared to 2017. Pet owners paid some 21.7 billion won for the insurance last year.
 
Some 15 million Koreans own pets, nearly a quarter of the entire population. They on average spend 120,000 won on their pets per month, of which 42,500 won goes to medical bills.

012505-pet insurance

012505-pet insurance

 
Aging pets is a major reason for these costs. As of end of 2021, 41 percent of pets in Korea were nine years or older. The average lifespan of a dog is between 10 to 13 years while that of a cat is 15 years, though there is variability among breeds and sizes.
 
The average monthly medical bill increases to 941,000 won for pets aged between 10 and 14.
 
“The latest trends in the pet insurance industry are long-term insurance plans and sales in offline channels,” said Shim Jun-won, CEO of Petfins, a local pet insurance firm.
 
“This means that the market competition has started in earnest.”
 
Despite a fast-growing market, Korea still has a long way to go.
 
Pets that are insured are still less than 1 percent of the total number.
 
Experts argue that there are still some ongoing issues that should be discussed for the pet insurance market to grow further. The expensive insurance premium is cited as the biggest problem.
 
“I’ve been thinking of changing my insurance since the premium is on the constant rise,” said Jeong, 61, an owner of an eight-year-old Welsh Corgi.
 
She paid 51,620 won per month for insurance the first year she took it out. That rose to 70,700 won after a series of renewals.
 
“My dog is very outgoing but has been suffering from arthritis due to his short legs,” said Jeong. “I can’t halt the insurance because it is the only one that covers arthritis.”
 
Some 22.3 percent of pet owners cited being “burdened because of costs,” as the biggest reason why they are hesitant to get insurance, according to a survey by the Ministry of Agriculture, Food and Rural Affairs on some 4,100 pet owners. Eight-point-eight percent said the country “lacks diversity in plans.”
 
Limited coverage and lack of explanation are other big issues.
 
“I felt important details were missing when I first took out insurance for my cat,” said Cho, the owner of a Koshot, short for domestic Korean shorthaired cat.
 
Cho visited various pet fairs and exhibitions to look for the best product last year, but it seemed like all were just more of the same.
 

[PIXABAY]

[PIXABAY]

Some say it is essential to set up a standard system for the medical treatment of pets. Assigning codes for diseases, like how health insurance works for humans, is considered a way to stabilize expenses.
 
For instance, patella luxation is a common issue for both dogs or cats. However, veterinarians have their own ways of defining the kneecap, thus they charge widely different rates.  
 
“Comparison of medical bills will be possible only when a standard is established,” said Kim Kyung-seon, a researcher at Korea Insurance Research Institute.
 
“The Veterinarians Act needs to be revised in order to standardize bills and issuance of medical reports mandatory,” Kim said.
 
Anycom, the largest pet insurance company in Japan, signed an agreement with over 6,000 local vets to make them use self-developed codes for their clients.

012505-pet insurance-1.

012505-pet insurance-1.

 
Pet registration is emerging as another solution. It is considered a key tool to activate the pet insurance market and prevent any insurance fraud cases.
 
“Germany requires all owners to register their pets, take out insurance and make them take full responsibility when their pets hurt others,” said Petfins CEO Shim.
 
“Implanting microchips will be the alternative for the registration.”  
 
President Yoon Suk Yeol selected the activation of pet insurance as one of his 110 key tasks last year.
 
The size of the pet-related market, which was about 2.65 trillion won in 2018, doubled to 4.2 trillion won in 2022. It is expected to exceed 6 trillion won in 2027, according to Korea Securities Depository. 

BY SHIN SU-MIN, SARAH CHEA [chea.sarah@joongang.co.kr]



[ad_2]

Source link