During this earnings season, insurance coverage for furry companions has secured a spot on the scorecards of several listed insurers. ZhongAn Insurance reported pet insurance premiums of RMB 691 million for the first half of 2026, serving over 1.61 million pet owners. Ping An Insurance’s Deputy CEO and CFO Fu Xin also highlighted the pet ecosystem, including pet insurance, during the company’s interim results conference. According to media reports, Ping An Property & Casualty generated RMB 247 million in pet insurance premiums in the first half of 2026.

Once considered a niche product, pet insurance is now emerging as a new growth frontier that property insurers are eager to capture. Beyond the mainstream medical insurance for dogs and cats, innovative offerings such as exotic pet insurance and critical illness coverage for pets are also hitting the market. Behind the buzz, however, the industry’s real situation remains uneven: while market penetration has climbed from under 1% to nearly 4%, over 90% of pets still lack any form of protection. Meanwhile, industry insiders point to inadequate infrastructure, a lack of standardized veterinary care, and difficulties in risk control as key challenges restricting the sector’s development in China.

A Hundred-Million-Yuan Business Enters Listed Insurers’ Earnings Reports

Amid the booming pet economy, pet insurance is becoming an essential complement to pet-related consumption. Pet insurance is a commercial insurance arrangement where the policyholder pays a premium for the insured pet, and the insurer assumes liability for pet injuries or loss resulting from covered accidents, or for pet death, disability, illness, or reaching a contractually defined age or term. In the current market, mainstream pet insurance products fall into three main categories: pet liability insurance, pet medical insurance, and pet shipping insurance.

According to the “2026 China Pet Industry White Paper” published by Pidu Pet Industry Big Data Platform, China’s pet insurance premium market reached approximately RMB 3 billion to RMB 3.5 billion in 2025, a dramatic increase from RMB 50 million in 2020. Media tallies show that nearly 60 property insurance companies have entered the space. As pet insurance gains momentum, this product category—not yet separately classified under current regulatory frameworks—is increasingly appearing in listed insurers’ interim reports.

As China’s first internet-based insurer, ZhongAn Insurance has consistently treated pet insurance as a key growth driver. Its 2026 interim report shows pet insurance premiums rose 22.7% year-on-year to RMB 691 million. “Pet insurance holds enormous growth potential and is a sector we are bullish on for the long term,” said ZhongAn Online CEO Jiang Xing at the interim results conference. Meanwhile, among major insurers, the pet ecosystem—including pet insurance—appeared for the first time in Ping An Insurance’s 2026 semi-annual report as a key example of sustained customer value, and was singled out by Fu Xin when introducing the company’s strategic priorities. Media reports indicate that Ping An Property & Casualty achieved RMB 247 million in pet insurance premiums in the first half of 2026, a 113.2% year-on-year increase. Additionally, Zhang Daoming, Vice President of PICC Group and President of PICC Property & Casualty, mentioned at the company’s 2026 interim results conference that pet insurance is an important component of its integrated “vehicle, personal, and home” sales system. On the intermediary side, Duan Wenjun, operations lead for the pet health business at Ant Insurance, recently noted the platform’s pet insurance business is maintaining double-digit growth.

“The growth engine of pet insurance has shifted from quantitative expansion to structural upgrade,” said Xu Xian, Deputy Dean of Fudan University’s School of Economics, at the 28th Asia Pet Expo, analyzing the drivers behind the sector’s rapid rise. White Paper data shows that in 2025, the number of urban dogs and cats reached 126 million, up 1.8% year-on-year, while consumer spending on urban dogs and cats hit RMB 312.6 billion, up 4.1% year-on-year. “The pet economy is set to become a critical new track for China’s overall economic development,” Xu Xian said. Against the backdrop of an aging population and changing family structures, pets have gradually become important members of many households, and the resulting diverse needs—such as medical care, boarding, and transportation—along with associated risks, are creating new opportunities for more granular protection.

Zhu Yigang, head of ZhongAn Insurance’s pet insurance business, told Yicai in an interview that pet insurance penetration in China has risen from about 1% a few years ago to nearly 4%. He expects the sector to continue growing rapidly over the next three to five years, though growth rates may moderate as the base expands. “In about five years, the pet insurance market should climb to the next tier,” Zhu said.

Penetration Below 4% and Infrastructure Gaps Persist

Despite robust growth over the past two years, industry insiders note that pet insurance penetration in China remains below 4%—still a considerable gap compared with mature markets. Multiple experts attribute the hurdles to insufficient infrastructure such as identity recognition, and the lack of unified treatment standards. “Domestic industry infrastructure still lags,” Zhu Yigang said. In some mature pet insurance markets, microchips create a unique binding relationship between the pet and its owner—for instance, the UK and Sweden have mandatory chip requirements. In China, however, related smart device management is still in its infancy, and a true unique binding between pets and their owners has not been established.

For insurers, “the insured object must be uniquely identifiable” is a fundamental prerequisite—whether the animal claiming at the time of loss is the same one that was insured remains one of the industry’s most basic challenges. Domestic insurers have applied nose-print technology for dog and cat identification, but extending this to many other pet species is difficult. Another obstacle frequently cited by industry insiders is the standardization of veterinary diagnostics and treatment. Since pet hospitals are almost all market-driven private institutions of varying quality, treatment standards across the sector are generally far from standardized. Duan Wenjun added that pet hospitals have strong commercial profit motives, and the examination items, pricing, and treatment plans can vary widely across providers. This makes “treatment standards” something of a trade secret at each hospital, leading many pet owners to describe veterinary care on social media as “opening a mystery box.” Such opacity ultimately translates into higher insurance costs and is a root cause of complaints about low single-claim caps, rising renewal premiums, and frequent changes in designated hospitals.

Zhu Yigang also suggested that, given the impact of pet ownership on public social life, the industry could explore public liability insurance for pets, which would in turn help lift overall pet insurance penetration.

Innovation Pathways for Pet Insurance

While challenges remain, innovation in pet insurance is accelerating. At the recent Asia Pet Expo, ZhongAn Insurance launched several industry-first products, including specialized parrot medical insurance and pet cancer insurance. Ping An Property & Casualty took the lead in underwriting pet shipping insurance for high-speed rail transport. JD Insurance became the first to include prescription diets in its direct claims coverage, while Ant Insurance rolled out pet treatment guidelines and a pet hospital selection feature. Xu Xian noted that competition in China’s pet insurance industry is shifting from single-product scale expansion toward greater focus on quality, service, and niche demand.

This shift defines the sector’s innovation direction: “building on a multi-species, full-lifecycle, multi-scenario framework while upgrading to version 2.0 on a compliant foundation,” Xu Xian said. For insurers, the key is to accurately identify risks at different life stages of various pets, better aligning coverage with the real needs of pet owners. Demand segmentation is first evident in pet species. Surveys show nearly 60% of respondents have kept two or more types of pets; beyond dogs and cats, aquatics account for 17.3%, reptiles 13.5%, birds 8.7%, and rodents 7.6%. Zhu Yigang noted that parrots have overtaken rabbits to become the third most-kept pet in China after dogs and cats, with the national issuance of compliant parrot identification rings surpassing 3.5 million in 2025.

Based on this market context, specialized parrot insurance has become a “breakthrough” product in China’s exotic pet insurance segment, designed around common parrot illnesses. Of course, exotic pet insurance carries distinct and severe risk points compared with dogs and cats. Li Shuang, product director for pet insurance at ZhongAn Insurance, said the biggest challenge is identity recognition. In its parrot-specific coverage, ZhongAn uses traceable smart leg rings to lock down the insured pet’s identity, but given the wide variety of pet forms and movement patterns, this approach cannot be easily applied to other species. Another issue is the lack of data on exotic pets in China and scarce veterinary resources. As a result, the parrot insurance product initially drew on more mature overseas exotic pet insurance frameworks, setting cumulative and per-claim limits. In terms of medical resources, only a small share of hospitals currently support exotic pets, and medical resources are extremely limited, driving up treatment costs. Furthermore, the anatomical differences of parrots and other exotic pets compared with dogs and cats can lead to sudden and severe illness, also raising claims costs.

Given these special risks, some insurers remain cautious. Duan Wenjun said Ant Insurance is still monitoring the exotic pet market. “Each exotic pet species has its own identity recognition methods, treatment standards, and norms—essentially requiring us to go through all the technical groundwork from scratch, which is both challenging and time-consuming.” Beyond multi-species coverage, Xu Xian noted that while basic protection for dogs and cats is relatively well established, there may be room for further breakthroughs in full-lifecycle products—covering everything from vaccinations for young pets and routine medical care in adulthood to oncology and chronic disease management in senior years. In terms of multi-scenario applications, insurance access is expanding beyond individual purchases into diverse settings, such as enterprise pet insurance as an employee benefit, platform-embedded enrollment, and closed-loop models combining online consultation, referral navigation, and post-surgical services—all of which can broaden the protection boundary for “new family members.”