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Insurance companies bullish on growth of travel insurance segment

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Kahini ChakrabortyMumbai

General insurance companies are seeing scope for growth in the travel insurance segment amidst recent reports on them seeking approval from IRDA to increase travel insurance premiums due to the rupee depreciation against the dollar. This trend has been due to travellers now becoming more cautious and educating themselves regarding the perils of mammoth medical expenses overseas. According to insurance officials, the overall insurance industry is growing at the rate of 18-20 per cent per annum and they are expecting to grow in line with the industry.

Yashish Dahiya

Yashish Dahiya, CEO and co-founder, Policybazaar.com revealed, “As an insurance aggregator website we see some interesting trends for travel insurance products. For instance, about 20 per cent of the bookings for travel insurance on the website are for travellers heading to destinations in Asia. This clearly shows that Asia Pacific destinations are favourites apart from America and Europe. Over 50 per cent of people purchasing travel insurance are under the age of 35 and close to 38 per cent of our enquiries are for people over the age of 60. As per our data, almost 70 per cent of our consumers are buying travel insurance with a sum insured of up to US$ 100,000.”

Amit Bhandari

ICICI Lombard has revamped its international travel insurance offering and also expects this portfolio offering to grow. Amit Bhandari, VP-health underwriting and claims, ICICI Lombard added, “The rupee has witnessed high volatility against the dollar in the recent past. This uncertainty has also impacted the premium collection in travel insurance. Some companies have increased the premium on travel insurance, though we haven’t done so till date.”

Mukesh Kumar

While Mukesh Kumar, member of executive management and head – HR, marketing and strategy planning, HDFC ERGO General Insurance said, “Currency fluctuation is typically considered as one of the factors while arriving at the premium prices. This is also taken into consideration along with other factors like the customised requirement in coverages, travel frequency, country of visit, etc. The change in pricing requires regulatory approvals which can take around three-six months. We have as of now not considered increasing premium for travel insurance.”

But as there is a discrete co-relation of the rupee fall with claims as they are settled in dollars to the insured, Dev Karvat, managing director, TrawellTag India strongly believes that since most of the insurance claims come from unpredictable health emergencies that travellers face overseas, the rise in premium is inevitable.