So you have packed your bags and are ready to fly to your dream destination? And you’ve ticked your checklist — travel documents, traveller’s cheque....everything is in place. But wait a minute. What about your travel insurance? You haven’t bothered about it. Right?
Well most of us don’t. Unless we are travelling to Schengen countries where it’s mandatory to have a travel insurance cover. Or those of us travelling to the US generally take a health cover because we have been told that medical expenses there are exorbitantly high and could burn a big hole in the pocket.
In fact, elderly people travelling to the US are specifically advised by their children/ relative to take travel insurance as the cost of medical treatment is high in the US. However, immigrant labourers top the list among those who do not buy travel insurance. Also, people travelling to countries like Australia, South Africa, South-East Asia, etc. generally travel without travel insurance, since these are usually short duration trips.
Arguably, the concept of travel insurance is relatively new in India. Till about five years ago, it was only the nationalised insurance companies that provided special health covers for people travelling abroad. It was only after the number of Indians travelling abroad shot up and private insurance companies entered the market that the travel insurance business picked up.
Industry experts, however, say awareness of overseas travel insurance among Indians is moderate to high and most people buy the cover either as a felt need or when it is mandatory.
Figures reflect the nascent stage: The travel insurance business is currently estimated at Rs 250-crore. With over six million Indians travelling abroad, this amount roughly covers only 20% of the travellers — 1.2 million persons.
As far as domestic travel insurance is concerned, only a fraction of the 17 million Indians, who travel within the country, buy the product. There are very few schemes and a majority of Indians haven’t heard of them. Though the premium on travel insurance is low, lack of awareness remains a deterrent, say industry experts.
But herein lies the opportunity. With such a vast market waiting to be tapped, insurance companies are getting aggressive by the day. According to industry experts, travel insurance business has seen a 15-20% growth for outbound travel.
And fuelling the demand for travel insurance are mainly business travellers and young executives, according to Le Passage to India chairman Ghulam Naqshband. “That’s because business travellers working in large corporates purchase the travel insurance and give it to their employees with other travel-related documents,” says Sudhir Menon, head travel services, ICICI-Lombard General Insurance.
“Young executives have started realising the importance of travel insurance as they are aware of the need for one,” feels Ankur Bhatia, managing director, Amadeus India.
“International travel has increased in India over the past few years. More Indians are now travelling abroad either for business and leisure. The awareness level has been increasing year on year. Today we see a lot of young people with high disposable income travelling abroad who also prefer to take travel insurance.
In fact, the travel insurance segment has a tremendous potential in India and is a continuous growing sector. Many insurance companies are venturing into the travel insurance sector recognising this potential,” says Antony Jacob, managing director, Royal Sundaram Alliance Insurance.
And riding on the increasing demand for travel insurance, general insurance companies are working out innovative covers and various options of sum insured. While national players still dominate overseas mediclaim covers, private players like Tata AIG, Bajaj Allianz, ICICI Lombard and Royal Sundaram have managed to tap about 40% of the market till now.
Realising the market potential, even nationalised insurance companies, who till now offered standard vanilla OMPs (overseas mediclaim policy) are coming out with new schemes. In fact, companies like New India Assurance and National Insurance Company have come out with overseas mediclaim covers for Asian countries specifically with lower premiums.
Moreover, while branded travel insurance plans are getting customised, most of the private insurers have tied up with travel agents, insurers or travel and ticketing companies such as Amadeus, Galileo, Sita, Thomas Cook and online companies like Makemytrip, Travelguru, etc, to issue on-line policies.
Undeniably, there’s lot of action on the ground. But there’s a long way to go when compared to the activities in developed countries. Khalid Sohail, head, travel insurance business, Tata AIG General, explains that the travel insurance product sold in India is different from those in developed countries.
“In developed markets like the US and the UK, travel policies are sold to cover travel related inconveniences like flight misses, baggage loss, loss of documents, etc. But in India, the major drivers of the travel policies are sickness and accident. In India, medical insurance does not cover people who go abroad, whereas in developed countries, the medical coverage is global.”
Which explains why medical emergency tops the list of reasons for taking travel insurance in India. Indians are especially vulnerable because medical insurance issued locally in rupees may not cover a bigger bill in dollars or euros.
Short-term visitors, those on businesses or visiting friends or family, are especially vulnerable since they often presume that their regular medical policies provided by employers in India will cover them. But that’s not true since most insurers of regular policies explicitly exclude foreign travel.
“In fact,” says an SOTC official, “passengers must understand that medical expenses in foreign countries are extremely high as compared to India. Medical institutions abroad will not tend to patients who are not covered by overseas insurance.”
Mr Bhatia, however, feels that things are changing. “About 90% of the travellers who come to us take a comprehensive policy. Only 10% take the health cover,” he claims. Besides health, other contingencies include baggage loss, trip cancellations and flight delays or even hijacks.
Lack of right products is also a big deterrent — there are few insurance covers whose period matches with the travel duration or there is hardly any insurance coverage for adventure travellers. But things seem to be changing for the better.
According to a National Insurance Company official, innovative products will hit the market once the requisite infrastructure is in place. But there is a latent demand for niche policies from high networth individuals, he says.
Another catch is that most travel policies are for seven days. And people usually travel abroad for three or four nights. Since the duration of the stay is shorter than the policy, people avoid it as the cost of the cover goes up unnecessarily.
To overcome this problem, says Mr Sohail, “Tata-AIG launched a special product for people who travel to Asian countries called Asia Travel Guard where the policy cover is aligned to the duration of the trip and the actual stay abroad. This reduces the cost of insurance.”
In fact, there can be a lot of product innovation in travel insurance and private players are writing more to notch up bigger shares. Sports and adventure are various niche travels being looked at. Already, Thomas Cook has specialised covers designed for adventure travel. Cholamandalam, too, has come up with a travel day concept for corporate houses which is a big hit,” says a Cholamandalam Insurance official.
But even as new products slowly trickle in, senior citizens feel let down. For them, such concerns are amplified, especially on the health front. There are a number of insurance products that offer overseas mediclaim policies for the people going abroad.
However, eligibility becomes a problem for certain categories of individuals and policies are available for people up to the age of 70 only. Beyond this age limit, senior citizens are either not given a policy, or have to contend with a ‘loaded’ premium. Loading means the premium on the policy will be increased by a certain factor due to the higher risks involved.
Says Manish Chawla, head, business development, BTI, Sita India: “Most travel insurance companies issue travel insurance to people below 65 years of age without any medical checkups....after which there’re pre-conditions attached to the policy.”
Mr Bhatia, however, says that “elderly people are very eager to take in-travel insurance as they fear their age and the expensive treatment which they might incur when they travel out of the country.”
But there’s a good news for them too. “The old people now have reasons to cheer. ICICI Lombard has a Salt and Pepper plan and gives insurance to those up to 85 years,” says Mr Menon. Tata-AIG has a plan that covers old travellers up to 79 years. But these policies come with some conditions attached.
Right networks, too, are adding to the momentum. More travel agents are taking interest in distributing insurance policies now and many of them are tying up with insurance companies. Travel agents Cox & Kings and Thomas Cook distribute travel insurance policies.
While this is basically done through a tie-up with an insurance company, the premiums are generally high, thanks to some extra covers thrown in. But before buying a travel policy, it is better to think it over whether one needs these extra benefits in the first place and buy accordingly.
However, as per IRDA (Insurance Regulatory and Development Authority) regulations, the premium rates provided by the insurer can’t change whether a customer goes through a travel agent or comes directly to the insurer. But the policies offered by travel agents have one or two additional features as a result of which the premium varies.
That may be the fine print. But as for the business opportunity, the domestic market offers a huge potential with 17 millions Indians travelling within the country. Already, some of the private players are aggressively targeting the domestic travellers.
“With the arrival of low-cost carriers and travel delays, there is great scope to cover travel-related inconveniences within the country, says Mr Sohail.” For the domestic market, we have launched Domestic Guard which covers accidents and travel-related inconveniences, flight misses due to civil disturbances, etc, he adds.
To promote insurance in the domestic travel market, makemytrip.com has tied up with ICICI Lombard. “This is an experiment wherein insurance will be complimentary with the package. We will be taking feedback from our customers to conclude if travel insurance can gain widespread acceptance in domestic travel market,” says Sachin Bhatia, co-founder and chief marketing officer, makemytrip.com.
Cox and Kings, which has a tie-up with Oriental Insurance Company, has an in-built insurance component (insurance not being an option but a compulsory component) not only for foreign packages but domestic packages as well.
The category is set to grow with people wanting more benefits at a lower cost. We have a 10% market share in travel insurance and hope to sell around 5 lakh policies over the next three years,” says Kamesh Goyal, CEO, Bajaj Allianz General Insurance.
So, the next time you pack up for a sojourn abroad, don’t forget to take your travel insurance. This will lessen your baggage burden and definitely save you lots of trouble.
Source: ET
Well most of us don’t. Unless we are travelling to Schengen countries where it’s mandatory to have a travel insurance cover. Or those of us travelling to the US generally take a health cover because we have been told that medical expenses there are exorbitantly high and could burn a big hole in the pocket.
In fact, elderly people travelling to the US are specifically advised by their children/ relative to take travel insurance as the cost of medical treatment is high in the US. However, immigrant labourers top the list among those who do not buy travel insurance. Also, people travelling to countries like Australia, South Africa, South-East Asia, etc. generally travel without travel insurance, since these are usually short duration trips.
Arguably, the concept of travel insurance is relatively new in India. Till about five years ago, it was only the nationalised insurance companies that provided special health covers for people travelling abroad. It was only after the number of Indians travelling abroad shot up and private insurance companies entered the market that the travel insurance business picked up.
Industry experts, however, say awareness of overseas travel insurance among Indians is moderate to high and most people buy the cover either as a felt need or when it is mandatory.
Figures reflect the nascent stage: The travel insurance business is currently estimated at Rs 250-crore. With over six million Indians travelling abroad, this amount roughly covers only 20% of the travellers — 1.2 million persons.
As far as domestic travel insurance is concerned, only a fraction of the 17 million Indians, who travel within the country, buy the product. There are very few schemes and a majority of Indians haven’t heard of them. Though the premium on travel insurance is low, lack of awareness remains a deterrent, say industry experts.
But herein lies the opportunity. With such a vast market waiting to be tapped, insurance companies are getting aggressive by the day. According to industry experts, travel insurance business has seen a 15-20% growth for outbound travel.
And fuelling the demand for travel insurance are mainly business travellers and young executives, according to Le Passage to India chairman Ghulam Naqshband. “That’s because business travellers working in large corporates purchase the travel insurance and give it to their employees with other travel-related documents,” says Sudhir Menon, head travel services, ICICI-Lombard General Insurance.
“Young executives have started realising the importance of travel insurance as they are aware of the need for one,” feels Ankur Bhatia, managing director, Amadeus India.
“International travel has increased in India over the past few years. More Indians are now travelling abroad either for business and leisure. The awareness level has been increasing year on year. Today we see a lot of young people with high disposable income travelling abroad who also prefer to take travel insurance.
In fact, the travel insurance segment has a tremendous potential in India and is a continuous growing sector. Many insurance companies are venturing into the travel insurance sector recognising this potential,” says Antony Jacob, managing director, Royal Sundaram Alliance Insurance.
And riding on the increasing demand for travel insurance, general insurance companies are working out innovative covers and various options of sum insured. While national players still dominate overseas mediclaim covers, private players like Tata AIG, Bajaj Allianz, ICICI Lombard and Royal Sundaram have managed to tap about 40% of the market till now.
Realising the market potential, even nationalised insurance companies, who till now offered standard vanilla OMPs (overseas mediclaim policy) are coming out with new schemes. In fact, companies like New India Assurance and National Insurance Company have come out with overseas mediclaim covers for Asian countries specifically with lower premiums.
Moreover, while branded travel insurance plans are getting customised, most of the private insurers have tied up with travel agents, insurers or travel and ticketing companies such as Amadeus, Galileo, Sita, Thomas Cook and online companies like Makemytrip, Travelguru, etc, to issue on-line policies.
Undeniably, there’s lot of action on the ground. But there’s a long way to go when compared to the activities in developed countries. Khalid Sohail, head, travel insurance business, Tata AIG General, explains that the travel insurance product sold in India is different from those in developed countries.
“In developed markets like the US and the UK, travel policies are sold to cover travel related inconveniences like flight misses, baggage loss, loss of documents, etc. But in India, the major drivers of the travel policies are sickness and accident. In India, medical insurance does not cover people who go abroad, whereas in developed countries, the medical coverage is global.”
Which explains why medical emergency tops the list of reasons for taking travel insurance in India. Indians are especially vulnerable because medical insurance issued locally in rupees may not cover a bigger bill in dollars or euros.
Short-term visitors, those on businesses or visiting friends or family, are especially vulnerable since they often presume that their regular medical policies provided by employers in India will cover them. But that’s not true since most insurers of regular policies explicitly exclude foreign travel.
“In fact,” says an SOTC official, “passengers must understand that medical expenses in foreign countries are extremely high as compared to India. Medical institutions abroad will not tend to patients who are not covered by overseas insurance.”
Mr Bhatia, however, feels that things are changing. “About 90% of the travellers who come to us take a comprehensive policy. Only 10% take the health cover,” he claims. Besides health, other contingencies include baggage loss, trip cancellations and flight delays or even hijacks.
Lack of right products is also a big deterrent — there are few insurance covers whose period matches with the travel duration or there is hardly any insurance coverage for adventure travellers. But things seem to be changing for the better.
According to a National Insurance Company official, innovative products will hit the market once the requisite infrastructure is in place. But there is a latent demand for niche policies from high networth individuals, he says.
Another catch is that most travel policies are for seven days. And people usually travel abroad for three or four nights. Since the duration of the stay is shorter than the policy, people avoid it as the cost of the cover goes up unnecessarily.
To overcome this problem, says Mr Sohail, “Tata-AIG launched a special product for people who travel to Asian countries called Asia Travel Guard where the policy cover is aligned to the duration of the trip and the actual stay abroad. This reduces the cost of insurance.”
In fact, there can be a lot of product innovation in travel insurance and private players are writing more to notch up bigger shares. Sports and adventure are various niche travels being looked at. Already, Thomas Cook has specialised covers designed for adventure travel. Cholamandalam, too, has come up with a travel day concept for corporate houses which is a big hit,” says a Cholamandalam Insurance official.
But even as new products slowly trickle in, senior citizens feel let down. For them, such concerns are amplified, especially on the health front. There are a number of insurance products that offer overseas mediclaim policies for the people going abroad.
However, eligibility becomes a problem for certain categories of individuals and policies are available for people up to the age of 70 only. Beyond this age limit, senior citizens are either not given a policy, or have to contend with a ‘loaded’ premium. Loading means the premium on the policy will be increased by a certain factor due to the higher risks involved.
Says Manish Chawla, head, business development, BTI, Sita India: “Most travel insurance companies issue travel insurance to people below 65 years of age without any medical checkups....after which there’re pre-conditions attached to the policy.”
Mr Bhatia, however, says that “elderly people are very eager to take in-travel insurance as they fear their age and the expensive treatment which they might incur when they travel out of the country.”
But there’s a good news for them too. “The old people now have reasons to cheer. ICICI Lombard has a Salt and Pepper plan and gives insurance to those up to 85 years,” says Mr Menon. Tata-AIG has a plan that covers old travellers up to 79 years. But these policies come with some conditions attached.
Right networks, too, are adding to the momentum. More travel agents are taking interest in distributing insurance policies now and many of them are tying up with insurance companies. Travel agents Cox & Kings and Thomas Cook distribute travel insurance policies.
While this is basically done through a tie-up with an insurance company, the premiums are generally high, thanks to some extra covers thrown in. But before buying a travel policy, it is better to think it over whether one needs these extra benefits in the first place and buy accordingly.
However, as per IRDA (Insurance Regulatory and Development Authority) regulations, the premium rates provided by the insurer can’t change whether a customer goes through a travel agent or comes directly to the insurer. But the policies offered by travel agents have one or two additional features as a result of which the premium varies.
That may be the fine print. But as for the business opportunity, the domestic market offers a huge potential with 17 millions Indians travelling within the country. Already, some of the private players are aggressively targeting the domestic travellers.
“With the arrival of low-cost carriers and travel delays, there is great scope to cover travel-related inconveniences within the country, says Mr Sohail.” For the domestic market, we have launched Domestic Guard which covers accidents and travel-related inconveniences, flight misses due to civil disturbances, etc, he adds.
To promote insurance in the domestic travel market, makemytrip.com has tied up with ICICI Lombard. “This is an experiment wherein insurance will be complimentary with the package. We will be taking feedback from our customers to conclude if travel insurance can gain widespread acceptance in domestic travel market,” says Sachin Bhatia, co-founder and chief marketing officer, makemytrip.com.
Cox and Kings, which has a tie-up with Oriental Insurance Company, has an in-built insurance component (insurance not being an option but a compulsory component) not only for foreign packages but domestic packages as well.
The category is set to grow with people wanting more benefits at a lower cost. We have a 10% market share in travel insurance and hope to sell around 5 lakh policies over the next three years,” says Kamesh Goyal, CEO, Bajaj Allianz General Insurance.
So, the next time you pack up for a sojourn abroad, don’t forget to take your travel insurance. This will lessen your baggage burden and definitely save you lots of trouble.
Source: ET