This article first appeared in Wealth, The Edge Malaysia Weekly on January 27, 2025 - February 2, 2025

The cost of insurance for pets, mainly dogs and cats, increased rather significantly last year. This rise is partly reflected in the 5% to 30% increase in premiums for policies offered by Oyen Sdn Bhd, says its co-founder Michelle Chin.

As this is the pet insurance start-up’s first repricing in the last three years, the average annual increment of its policies is manageable, she adds. The quantum of increase is not across the board and instead depends on factors such as breed and age.

“The overall increase [in our pet insurance premiums] isn’t that high as it doesn’t happen annually. There will be multiple years with no increases,” she says.

Similar to human insurance policies, medical costs have driven up pet insurance premiums, adds Chin.

“It is likely that pet medical costs will continue to rise. This could be driven by advancements in veterinary technology and treatments which, while improving outcomes, also come at a higher cost. However, we view this as a positive development as it reflects the growing availability of better care for pets.”

She says the recent repricing of pet insurance premiums in Malaysia is also due to the availability of much more pet-related data compared with the time when the policies were first launched locally.

“Initially, pricing was based on limited data from a very small pool of customers and assumptions based on other countries. But as the market grows, we now have a much better understanding of claim patterns, pet demographics and risk profiles,” Chin explains.

“Our focus is to balance these costs with fair and affordable premiums for pet owners.”

Oyen, whose policies are priced through a collaboration with MSIG Insurance (M) Bhd as the underwriter, has always offered a 10% co-payment for its policies. It is now giving customers the option to choose policies with a higher co-payment amount, which means lower premiums, according to Chin.

“Sometimes, pet owners feel that maybe their pets are healthy or they really don’t want to pay so much for insurance, and they’re fine to bear 20% to 30% of the bill when an illness happens. They have that option today with us.”

MSIG, an insurer with products that cater to pets, tells Wealth that the holder of its pet insurance policies may bear up to 10% of eligible medical expense claims, depending on the plan selected.

It points out that the cost of veterinary services in Malaysia is not regulated, which is why the cost of pet care can vary between animals based on their size, the type of clinic (government or private), the equipment required and the drugs that are prescribed.

It is also worth noting that only cats and dogs are insured in Malaysia simply because these are the most common pets, giving insurers the data to adequately underwrite the pet insurance policies.

Insurers are unable to offer coverage for exotic pets as not enough is known about the ownership, types of illnesses the pets suffer from and treatment options, as they are not offered by all vet clinics in Malaysia, MSIG explains.

While Oyen has witnessed double-digit year-on-year growth, awareness of the availability of pet insurance is still confined to urban states. Currently, Chin says the states with the greatest number of pet insurance policies are Kuala Lumpur and Selangor, followed by Johor and Penang.

“We do have customers in all the Malaysian states and the highest number of policies in one household is 15! It’s common for pet owners to have multiple cats and sometimes dogs,” she adds.

Last November, Zurich Malaysia collaborated with Oyen to introduce Asia’s first-ever cat takaful product called Oyen Takaful Kucing to address the increasing demand for takaful pet coverage.

Chin says there has been a growing number of pet owners who prefer takaful protection for themselves and their family, as well as their pets.

In terms of coverage, the conventional and takaful pet insurance policies are similar. The most important characteristic of the takaful product is that it is Shariah-compliant, whereby it has to receive approval from a shariah committee.

“Some important components that are looked into are interest made on the products and a donation scheme [for contributions] to charity. So, let’s say someone makes a claim. A small amount — less than RM10 — will be given to charity. I think that’s very nice,” says Chin.

A “small amount” in this instance means any amount below RM10 that arises from contribution excess, cancellation, surplus distribution or claims that are to be made other than by way of electronic payment can be channelled to charity. However, if a policyholder decides otherwise, he or she is required to submit a formal request to Oyen to review the applicability of the amount and any change to the amount will be subjected to its Shariah committee’s approval.

As the takaful product is only for cats, the pool of funds to claim from is smaller. As such, with takaful pet insurance, pet owners can only make claims for costs that are no less than RM100.

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