[Pet Insurance War] (Part 1) 42x Growth in 5 Years... Meritz's Dominance Shaken

Pet Insurance Market Enters Red Ocean
Steady Increase in New Pet Insurance Contracts by Major Insurers from January to April
DB Insurance, Samsung, Hyundai Show Strong Growth

Pet insurance has rapidly emerged as a battleground for non-life insurance companies. As the population of pet owners continues to grow, the pet insurance market remains in its early stages with a subscription rate of just over 1%, leading to fierce competition to secure subscribers.

Rapid Growth of Pet Insurance... Increasing Pet Ownership

Pet insurance is a product that helps reduce medical expenses for companion dogs and cats. Pet insurance was officially introduced in South Korea in 2007. At that time, with the upcoming enforcement of the amended Animal Protection Act, which included animal registration and abuse prevention, interest in animal welfare grew, prompting companies like Samsung Fire & Marine Insurance and Hyundai Marine & Fire Insurance to launch pet insurance products. However, due to a lack of statistics, worsening loss ratios, and low consumer awareness, the market did not take off. Some insurers launched products but withdrew within five years.

After the mandatory pet registration system was implemented in 2014 and related statistics gradually accumulated, insurance companies began to show renewed interest. In 2017, only three insurers offered pet insurance, but by the end of last year, the number had increased to 10 (Meritz, DB, Samsung, KB, Hyundai, Lotte, Hanwha, NongHyup, Carrot, Ace). The number of pet insurance contracts grew from 7,005 in 2018 to 109,088 last year, a roughly 16-fold increase in five years. During the same period, new contracts rose from 7,159 to 58,456, an eightfold increase, and gross written premiums surged from 1.1 billion KRW to 46.8 billion KRW, a 42-fold jump.

The increase in pet ownership is also a major reason pet insurance is gaining attention. According to the Ministry of Agriculture, Food and Rural Affairs' "2023 National Awareness Survey on Animal Welfare," 28.2% of South Korea's total population owns pets. As of 2022, the number of companion dogs and cats was approximately 7.99 million, a 25.8% increase compared to 6.35 million in 2018. An industry insider said, "The ratio of pet insurance contracts to the number of pets is only 1.4%, so the subscription rate is still low, which means there is a large potential customer base. In the case of indemnity insurance, the first generation who subscribed early has broader coverage and lower deductibles compared to the fourth generation, and pet insurance may follow a similar trend, so there is demand to subscribe early."

Meritz's Dominance Shaken... DB Insurance's Rapid Rise

Currently, Meritz Fire & Marine Insurance leads the domestic pet insurance market. As of last year, its market share of pet insurance contracts exceeded 50%. However, this year, DB Insurance and Samsung Fire & Marine Insurance have expanded coverage, gradually increasing their market shares.

According to the non-life insurance industry, the number of new pet insurance contracts among five major domestic insurers increased monthly from 5,068 in January to 5,485 in February, 6,187 in March, and 7,365 in April. Based on cumulative data from January to April this year, Meritz Fire & Marine's majority share has been broken, with DB Insurance rising to the 30% range.

Meritz Fire & Marine introduced the "Petpermint Puppy & Dog," a dedicated indemnity medical expense insurance for dogs, in October 2018. In March of the following year, it launched "Petpermint Cat" for companion cats, playing a leading role in the pet insurance market. In May last year, it released more affordable products, "Petpermint Puppy & Love" and "Petpermint Cat & Love." By implementing an automatic claims system and partnering with over 400 animal hospitals nationwide, it enhanced convenience for pet owners and gained great popularity. Last month, it signed a business agreement with a veterinary association, increasing its connections within the related industry.

DB Insurance has recently been aggressively expanding its presence in the pet insurance market. In July last year, DB Insurance launched "Petbly," a dog insurance product. It offers lower prices and enhanced coverage compared to existing pet insurance. The annual maximum medical expense coverage is 20 million KRW, the highest level in the industry. Additionally, it has strengthened coverage with special contracts for liability, funeral support, and pet hotel boarding fees, gaining popularity through word of mouth.

Samsung Fire & Marine Insurance introduced the direct-only "Good Pet Insurance" last month on the 2nd, reducing premium burdens. The "Basic Plan," which only covers medical expenses on the day of surgery, can be subscribed to for under 10,000 KRW per month. The "Premium Plan" comprehensively covers outpatient and inpatient medical expenses, surgery costs, and pet funeral service support for companion dogs.

Other major non-life insurers offering pet insurance have also revised their products to attract subscribers. Hyundai Marine & Fire Insurance revised its "Good & Good Our Pet Insurance" on the 1st of last month, expanding coverage from dogs to cats. It also introduced "Expanded Medical Coverage for Dogs," covering "specific treatments" (foreign body removal) and "specific drug treatments." Considering the average lifespan of pets, it extended the coverage period. After the revision, Hyundai Marine & Fire Insurance's pet insurance sales in April increased more than fourfold compared to the previous month. KB Insurance also revised its "KB Geumjjok Gateun Pet Insurance" product earlier last month, doubling the coverage limits for major diseases such as tumors, heart, and kidney conditions. It also increased the per-surgery and annual treatment coverage limits for pet medical expenses.