(Yicai) June 4 -- With more and more pet owners in China opting for pet insurance due to high veterinary costs, relevant premiums have doubled for five consecutive years, so the insurance industry must jointly establish relevant standards to promote the market's standardized development, according to the chief financial officer of Ping An Insurance.

The development of pet insurance faces three major bottlenecks, Fu Xin said in an interview with Yicai. First, pet owners have a vague understanding of the coverage, major illness protection, and pre-existing conditions clauses, leading to a widespread phenomenon of "coverage only when sick," she said.

Second, the lack of standards in the veterinary industry, varying hospital quality, and opaque medication and fees have led to difficulties in pricing claims, Fu noted. Third, there is a lack of unified pet identity authentication technology, which poses a risk of insurance fraud where "one dog is insured but multiple receive treatment," she added.

Pet insurance premiums reached CNY3 billion to CNY3.5 billion (USD440 million to USD520 million) last year from around CNY50 million (USD7.4 million) in 2020, making it one of the fastest-growing segments in the sector. Some 59 property and casualty insurers had entered the market as of the end of last year, offering about 500 products, covering medical, accident, liability, and transit insurance.

Several pain points have become apparent amid the rapid expansion of the market. Over a thousand complaints related to various disputes had been filed on complaint platform Black Cat, including claim denials and difficulties in renewing policies.

A deeper issue lies in the lack of unified standards in the pet medical market, with the diagnosis and treatment standards and charging regulations at more than 30,000 veterinary hospitals across China being inconsistent. The costs for treating the same condition can vary significantly between locations, making it challenging for insurers to intervene and control fees, so they are forced to tighten claims terms, further exacerbating consumer dissatisfaction.

The industry has gone through stages of inconsistency, from auto to health insurance, and now to pet insurance, which still needs to continue making efforts in product innovation, establishing standardized medical practices, and enhancing risk management capabilities, Fu stressed.

Editor: Martin Kadiev