FOCUS – Travel insurance: ICICI Lombard


ICICI Lombard GIC’s Sanjay Datta explains the opportunity in the travel insurance sector


More and more travellers are beginning to understand the need to avail travel insurance these days. Yet just about 20 per cent of all international travelers opt for travel insurance in India. Sanjay Datta, Chief-Underwriting & Claims explains the opportunity and challenges, while pointing to new covers have been introduced by insurance companies to cover risks encountered while travelling abroad

Has the need for travel insurance increased in India? If so, why?
Penetration of travel insurance in India continues to be low as compared to the West. While it is around 20% for international travel, domestic travel insurance remains primarily untapped. This is because of a combination of factors including limited risk perception, low awareness of benefits and limited distribution push. Having said this, more and more travellers are beginning to understand the need to avail travel insurance these days.

How fast is the sector growing in India? How has the growth for ICICI Lombard been?
The travel insurance industry in India is currently around Rs 4 billion and has been growing at a rate of 20% approximately. ICICI Lombard has witnessed growth in line with the industry growth.

What are the major trends for travel insurance? In terms of destinations, what people buy them for etc?
Trends suggest a double-digit growth since last few years in the Indian outbound travel. The numbers of Indians travelling overseas already crossed the 12 million mark in May, 2011 and is expected to touch 50 million by 2020 (Source- Travel Trends Today, May 2011). This includes travel for business as well as leisure. Asia Pacific and the Middle East constitute over two thirds of total Indian outbound trips.

Major proportion of Indian travellers travelling abroad include people travelling for leisure, visiting friends and relatives, students travelling to study abroad. The other segment is of business travellers travelling for attending meetings, conferences, exhibitions etc. Medical cover is the primary cover for both business and holiday travel along with host of non-medical covers like Passport loss, Checked-in baggage loss/delay, Trip Cancellation & Interruption etc.

Who is buying? Do we have an idea of what percentage of travellers buy insurance before travelling?
According to ICICI Lombard research, only 20% of all international travelers opt for travel insurance in India. Students going abroad to study and people travelling for business are the main buyers.

icici-logoWhat are the various insurance options for the international traveller?
An individual international traveller travelling for the purpose of leisure or personal reasons can buy travel insurance policy through retail channels. Policies sold through retail mode are standard in nature with a list of plans depending on the option chosen. These plans are offered to suit the specific needs of individual travellers. The different options include those which include medical cover as well as non medical covers such as Trip Cancellation & Interruption, Trip Delay, Missed Connection etc., There are specific plans designed for senior citizens and multi trip plan, for frequent international traveller with different options for maximum duration per trip. An individual travelling abroad for study can opt for student travel insurance – specifically designed for students through any of the retail channel like from insurer’s website, branches or agents.

How different is it for travelers going to different nations?
Premium of travel insurance differs depending on the region of travel. The cost of medical treatment is comparatively higher in US, Canada as compared to rest of the world which affects the amount of premium.

How does currency fluctuation affect insurance purchase?
Currency fluctuation affects the number of travellers travelling abroad, duration of travel, destination of travel which has an implication on the insurance purchase.

If there is an adverse effect on the currency, premium of travel insurance may increase.

What fine print must the traveler know before getting insurance?
All travelers are advised to go through the policy wording including all fine prints and other related collateral before buying a travel insurance.

Are people buying insurance for the domestic sectors as well?
The penetration of insurance especially in domestic travel is very low. However, there has been an increasing trend for travel insurance for domestic sector. It is advisable to take travel insurance even for domestic travel since one can be faced with various contingencies that may affect the holiday. Contingencies such as accident, loss or delay of checked-in baggage, trip cancellation & interruption are taken care of by travel insurance. Domestic travel insurance can be availed at the time of booking tickets from the website of the airline/bus service provider or select travel portals.

Any other significant aspect to understanding the Indian travel insurance market and trends.
Apart from selling policies in retail mode for international travel, insurance companies also offer products specifically made for corporate. A corporate might have some different/additional requirements of covers when its employees travel overseas for meetings, conferences projects. There plans can be customized to suit the needs, but insurance cover for leisure travel or sold through retail mode are standard in nature with fixed covers and limited plans to choose from.

What are some of the less known aspects of travel insurance?
With the changing scenarios worldwide, new covers have been introduced by insurance companies to cover risks encountered while travelling abroad such as Political Risk and Catastrophe Evacuation, Compassionate Visit, Emergency Hotel Extension, loss of baggage and personal effects (non checked in baggage), return of minor children. Also, there is a range of Value Added Services like medical concierge services, automotive assistance, lifestyle services being offered by some companies apart from standard covers which a customer can opt for.



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