Starting today, the re-enrollment period for pet insurance products will be reduced to one year, and the self-pay rate will increase to 30%.
According to the insurance industry on the 1st, insurance companies will begin selling the revised pet insurance products from today.
Existing pet insurance provided coverage for up to 20 years and allowed re-enrollment every 3 or 5 years. The coverage ratio for medical costs could be selected between 50% and 100%, making products without any self-pay available, and there were no separate discounts or surcharges based on insurance payouts.
In the future, re-enrollment reviews will be required every year. If a pet has a treatment history, contract renewals may be denied or premiums may rise significantly the following year. However, it is expected that existing policyholders will be able to maintain their current insurance, even when the renewal period comes around.
Financial authorities amended the rules to reduce insurance companies' loss rate in a situation where the standardization of veterinary fees has not yet been achieved. A FSS official noted, "In a situation where the system is not fully established, if pet insurance continues to be sold as before, it could become difficult to manage later like with health insurance," adding, "The intention is to operate the re-enrollment period short until the standardization of medical fees and stabilization are established."
The insurance industry expects that the pet insurance market will shrink for the time being due to this measure. An industry official said, "Since re-enrollment will be required every year and self-pay rates are also increasing, customer appeal will decrease," adding, "There is a high possibility that the commission rates paid to agents will also decrease, so the market will shrink significantly."